Cloud to drive surge in European IT spending next year

IT spending across Europe is expected to grow at a record rate in 2024, according to new research from Gartner. 

The consultancy’s latest forecast shows IT spending will reach $1.1 trillion next year, marking a 9.3% increase on a projected total of $1 trillion this year. 

Gartner said the spending increase underlines shifting priorities among businesses during a period of economic uncertainty. 

"Despite a conflated economic situation, IT spending in Europe continues to be recession-proof," said John-David Lovelock, distinguished VP analyst at Gartner.

"CIOs in Europe who pursued the 'growth at all costs' strategy for over a decade are now shifting the emphasis of ongoing IT projects toward cost control, efficiencies and automation, while curtailing IT initiatives with longer ROIs."

Spending on software and IT services are both expected to see the largest increase next year amidst a continued focus on cloud computing. Infrastructure as a service (IaaS), for example, is expected to surge 27% across 2024. 

CIOs in Europe are also shifting their priorities internally, including enhancing cyber security spending. Spending on security and risk management in Europe is projected to reach around $56 billion, marking an increase of 16% compared to 2023. 

A concerted focus among CIOs on artificial intelligence and generative AI is also driving cloud spending, the report noted. 

With AI-related security risks a key concern among enterprises, this AI focus appears to be creating a confluence of spending on both the integration of the technology along with underpinning safeguards. 

"AI has also added a new level of concern around security ensuring that their systems are wrapped before hackers get near their sensitive data," says Lovelock.

Cloud spending goals remain strong

The latest research from Gartner aligns with previous analysis of spending across the broader cloud computing space. 

In a separate forecast this month, the consultancy predicted that end-user spending on public cloud services will surge by 20.4% across 2024, reaching a total of $678.8 billion. 

This marks an increase on 2023 and underlines that businesses are still investing heavily in cloud despite challenging economic conditions. 

IaaS is forecast to experience the highest end-user spending growth in 2024 at 26.6%, followed by platform-as-a-service (PaaS) at 21.5%.

In January 2023, analysts issued a warning that the global cloud computing industry could experience a “slowdown” as firms looked to curtail spending due to economic concerns.  

Despite this, cloud spending has continued steadily across 2023, with some analysts describing spending as ‘recession proof’.