IT spending in EMEA is expected to return to growth in 2020, the latest forecast from Gartner has revealed, with the research firm predicting an increase of 3.4% from 2019.
Following three consecutive years of decline, demand for enterprise software will be the main driving force behind the EMEA recovery with an increase of 9.2% tipped for next year. Within the segment, software as a service (SaaS) will achieve 17.7% growth.
IT services are then expected to be the second best-performing segment with growth of 5.3%, followed by communications services on 0.7%, the report predicts.
“This year declines in the Euro and the British Pound against the U.S. Dollar, at least partially due to Brexit concerns, pushed some IT spending down and caused a rise in local prices for technology hardware,” commented John Lovelock, research vice president at Gartner. “However, 2020 will be a rebound year as Brexit is expected to be resolved and the pressure on currency rates relieved.”
By contrast, spending on devices is set to remain in decline, falling by 1.3%, as customers opt to defer upgrades for a further year due to higher prices and a lack of “must-have” features.
Elsewhere, however, security spending in EMEA will continue to rise, Gartner says, with growth of 9.3% and 8.9% tipped for 2019 and 2020 respectively.
“Globally, security spending is increasing and being driven by the need to be compliant with tariffs, trade policies and intellectual property rights,” Lovelock explained. “In EMEA, privacy and compliance concerns, further driven by GDPR, take precedence.”
Cloud adoption also continues to make strides globally, with cloud spending in the UK to rise by 13.2% in 2020. Across EMEA, spending on public cloud services will hit $57.7 billion next year, up from $50 billion in 2019.
Businesses with a high percentage of their IT spending dedicated to the cloud will become “the recognised digital leaders of the future”, Gartner concluded.
“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,” Lovelock said.
“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."
