After the strong contraction in IT spending in 2009, spending in 2010 rebounded significantly across most Western European vertical markets, according to a new study by International Data Corporation (IDC). This growth was driven largely by better economic conditions and the need for companies to resume discretionary investments postponed during the crisis. According to the study, Western European IT spending is expected to reach $460 billion by 2015.
There are still challenges ahead, however, with fiscal consolidation, slower external and domestic demand, and increasing inflation expected to impact the pace of recovery. Recently, economic activity in the region has shown signs of slowing down, and GDP forecasts across most countries are being revised downwards.
"Given the increasing economic uncertainty over the pace of recovery, it is extremely important to identify where pockets of growth will be concentrated," said Nina Bonagura, senior research analyst with IDC's European Vertical Markets team. Some common issues emerge for companies in Western Europe that need to restore competitiveness; these are largely focused on sensitive-data protection, customer care enhancements, performance improvement, and operational cost reduction, but also on ensuring that the IT organization helps meet business goals. Vertical markets will have different spending patterns, however, with some segments offering stronger opportunities than others.
The study highlights that:
- Companies are cautiously increasing IT investments. This is most evident in more stable and expanding economies such as Germany and France, while Italy and Spain still trail.
- At a vertical level, the public sector - especially government, which has traditionally been a high-value, high-growth market - is where IDC expects to see the biggest reductions in IT spending. Despite growing at a slower rate than in the past, healthcare is expected to offer more growth opportunities.
- There are good medium- to long-term opportunities in utilities, with investments linked to both reducing operational costs and ensuring energy efficiency, and in retail, with investments aimed at enhancing sales performance and improving the customer experience.
- Business services, with investments aimed at sensitive-data protection, IT organization responsiveness, and customer care enhancements, is also expected to offer above-average opportunities.
- Growing opportunities are emerging in financial services institutions, with banking expected to speed up investments in the outer part of the forecast period, driven by investments to reduce operational costs and enhance IT organization responsiveness.
The study, Western European Vertical Market Information Technology Spending Forecast, 2011-2015 (IDC #M08T, September 2011), and the accompanying IDC European Vertical Markets pivot table on IT spending for 16 Western European countries in 18 vertical markets and 10 technology areas, analyzes IT spending trends for 2011-2015 and the specific factors driving end-user IT demand. The study is available for purchase at www.idc.com.
There are still challenges ahead, however, with fiscal consolidation, slower external and domestic demand, and increasing inflation expected to impact the pace of recovery. Recently, economic activity in the region has shown signs of slowing down, and GDP forecasts across most countries are being revised downwards.
"Given the increasing economic uncertainty over the pace of recovery, it is extremely important to identify where pockets of growth will be concentrated," said Nina Bonagura, senior research analyst with IDC's European Vertical Markets team. Some common issues emerge for companies in Western Europe that need to restore competitiveness; these are largely focused on sensitive-data protection, customer care enhancements, performance improvement, and operational cost reduction, but also on ensuring that the IT organization helps meet business goals. Vertical markets will have different spending patterns, however, with some segments offering stronger opportunities than others.
The study highlights that:
- Companies are cautiously increasing IT investments. This is most evident in more stable and expanding economies such as Germany and France, while Italy and Spain still trail.
- At a vertical level, the public sector - especially government, which has traditionally been a high-value, high-growth market - is where IDC expects to see the biggest reductions in IT spending. Despite growing at a slower rate than in the past, healthcare is expected to offer more growth opportunities.
- There are good medium- to long-term opportunities in utilities, with investments linked to both reducing operational costs and ensuring energy efficiency, and in retail, with investments aimed at enhancing sales performance and improving the customer experience.
- Business services, with investments aimed at sensitive-data protection, IT organization responsiveness, and customer care enhancements, is also expected to offer above-average opportunities.
- Growing opportunities are emerging in financial services institutions, with banking expected to speed up investments in the outer part of the forecast period, driven by investments to reduce operational costs and enhance IT organization responsiveness.
The study, Western European Vertical Market Information Technology Spending Forecast, 2011-2015 (IDC #M08T, September 2011), and the accompanying IDC European Vertical Markets pivot table on IT spending for 16 Western European countries in 18 vertical markets and 10 technology areas, analyzes IT spending trends for 2011-2015 and the specific factors driving end-user IT demand. The study is available for purchase at www.idc.com.
