EMEA enterprise IT spending to recover in 2011 - Gartner
EMEA region to show gradual return to enterprise IT spending growth after declines in 2009 and 2010
Gartner is predicting a recovery in enterprise IT spending in the EMEA region, following declines in 2009 and 2010.
The analyst company says that enterprise IT spending will rise 1.3% from 2010 to 2011, to reach $795.2 billion.
The EMEA region is the only region worldwide to show a decline in spending in both 2009 and 2010, with spending this year down 2.1% from 2009, to a forecasted $784.8 billion.
Peter Sondergaard, senior vice president and global head of research at Gartner, commented: “This decline in IT spending in 2010 is placing EMEA as the slowest region to fully overcome the downturn. We expect Western Europe to record the worst decline in EMEA in 2010 (-3.3%), and experience the slowest long-term growth rate with a compound annual growth rate of 0.8% through 2014.”
The IT hardware segment is the only part of the enterprise IT market to return to growth this year, with spending up 4.6% to $79.4 billion. Gartner attributed a gradual return to growth due organisations returning to refresh cycles, with storage likely to be the strongest segment of hardware through to 2014, due to growing volumes of data. Server, printer and PC revenues will be depressed by migration to lower cost devices and configurations.
The IT services market is predicted to show the weakest return to growth, and will show a decline of 5.6% to $234 billion in 2010. Gartner attributes this to a risk-averse and cost-focused mindset among organisations, which is inhibiting investment in changing the business through new strategies, productivity enhancement, and process and product innovation.
The company also predicts that enterprise software spending will outstrip hardware spending by 2012, although European markets will show a split between countries that will return to spending in a robust fashion against others that will show much weaker growth.
“This is leading to a 'polarisation' of performances in the software market,” said Sondergaard. ”The countries that are leading the recovery are being more proactive on the software purchase front, while those that are still languishing in recession miss out on the more innovative software investments. By 2014, this could lead to an even larger gap between the size and growth rates of the software markets in these two different types of countries.”
Ongoing austerity measures by Western European governments would mean that public sector IT spending will experience only slow growth through to 2014, with the market predicted to decline by 2.8% this year to $139.6 billion.
In EMEA, Gartner predicts that all vertical sectors except for utilities will continue to show a decline in spending in 2010. In 2011, only two verticals will show an ongoing decline, transportation and education, with education suffering multi-year budget shortfalls and an emphasis on spending on teaching staff over IT, while transportation is depressed by mixed economic indicators and the remaining spectre of an economic double dip has kept IT investments in this industry on the defensive.