IT spending in EMEA will return to growth at $798 billion in 2020, an increase of 3.4% from 2019, according to the latest forecast by Gartner — a relief for CIOs and IT departments
Having fallen for three years, IT spending is finally set to increase in 2020, releasing a huge amount of pressure on CIOs and IT departments.
IT spending has decreased over the last three years and yet IT teams are expected to do more than ever before. The CIOs’ IT department is now well and truly aligned with the overall business strategy, or at least it should be, and is expected to contribute to innovation and revenue growth — they’re not just “keeping the lights on” anymore.
It should come as welcome news to the CIOs and IT departments of enterprises then, that “2020 will be a recovery year for IT spending in EMEA after three consecutive years of decline,” according to John Lovelock, research vice president at Gartner.
“This year declines in the Euro and the British Pound against the US Dollar, at least partially due to Brexit concerns, pushed some IT spending down and caused a rise in local prices for technology hardware. However, 2020 will be a rebound year as Brexit is expected to be resolved and the pressure on currency rates relieved.”
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A software-first world
Spending on devices (including PCs, tablets and mobile phones) is set to decline 10.7% in 2019, while enterprise software spending continues to rise.
Enterprise software will remain the fastest-growing market segment in 2020. EMEA spending for enterprise software will increase 3.4% and 9.2% in 2019 and 2020, respectively. Software-as-a-service (SaaS) will achieve 14.1% growth in 2019 and 17.7% in 2020.
IT spending catalysed by regulatory compliance demands
The complex geopolitical environment and constant barrage of data breaches across EMEA has pushed regulatory compliance to the top of the priority list for many organisations. EMEA spending on security will grow 9.3% in 2019 and rise by 8.9% in 2020.
“Globally, security spending is increasing and being driven by the need to be compliant with tariffs, trade policies and intellectual property rights. In EMEA, privacy and compliance concerns, further driven by GDPR, take precedence,” explained Lovelock.
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Cloud spending could lead to digital dominance
The US is leading cloud adoption and accounts for over half of global spending on cloud, which will total $140.4 billion in 2020, up 15.5% from 2019.
In terms of cloud spending, the UK holds the No. 2 position behind the US. The UK spends 8% of IT spending on public cloud services, which will total $16.6 billion in 2020, up 13.2% from 2019.
In EMEA, the overall spending on public cloud services will reach $57.7 billion in 2020, up from $50 billion in 2019.
Gartner predicts that organisations with a high percentage of IT spending dedicated to the cloud will become the recognised digital leaders in the future.
“Organisations in Europe, regardless of industry, are shifting their balance from traditional to digital — moving toward ‘techquilibrium’, a technological balancing point that defines how digital an enterprise needs to be to compete or lead,” added Lovelock.
“Not every company needs to be digital in the same way or to the same extent. This move towards rebalancing the traditional and digital is clearly visible amongst EMEA companies.”