Publication date: 09 Feb 2023
European Cloud Spending Will Reach $148 billion this year, Despite Tug of War Effect Caused by Economic Pressures
London, February 9, 2023 – According to the International Data Corporation (IDC)’s Worldwide Software and Public Cloud Services Spending Guide, Public Cloud Services spending in Europe will reach $148 billion in 2023 and will reach $258 billion by 2026, growing at a 22% 5-year 2021-2026 CAGR.
Being a cost-effective substitute to traditional IT deployments, Software-as-a-Service (SaaS) will continue to drive most of the spending in Public Cloud in Europe, especially during challenging times when companies are heavily scrutinizing their budgets. On the other hand, companies are looking for tools that enable reduced speed to market and that allow them to speed up the creation of apps. Consequently, Platform-as-a-Services (PaaS) will remain the fastest-growing Cloud segment in the future.
Professional services, banking, and discrete manufacturing will remain the top spending industries in Public Cloud Services, absorbing 36% of the overall Public Cloud Services spend in 2023. The situation in Europe remains tense for the Cloud market, which finds itself in the middle of a tug of war-alike effect. On one hand, high inflation, cost crisis, energy prices, and geopolitical tensions in Eastern Europe will intensify budget volatility and change IT plans. On the other hand, a stronger focus on cost-effective IT solutions, hybrid work, digital transformation acceleration will push investments in the Cloud, which will continue to grow.
“As the direct effects of the pandemic phased out, its indirect effects morphed into new challenges including skill shortages, high inflation, and potential recession scenarios, which will influence investments in technology. Nonetheless, the Cloud focus will march on, with companies using Cloud to lower IT costs. European industries will more frequently shift efforts toward Cloud solutions that require lower capital expenditure than traditional IT solutions.” said Andrea Minonne, research manager at IDC UK.
Another shift supporting Cloud spending is the data explosion and consumption many industries are facing. Data at scale rises data protection, compliance, and security concerns and European companies will continue to spend in Cloud to improving governance and security also in light to data privacy laws, regulatory compliance, and digital legislation requirements. This is pushing more companies to spend on sovereign Cloud, which allows organizations to be in a better position when it comes to tackling regulation requirements.
About the IDC Worldwide Public Cloud Services Spending Guide
The IDC Worldwide Software and Public Cloud Services Spending Guide quantifies public cloud computing purchases by cloud type for 20 industries and five company sizes across eight regions and 47 countries. Unlike any other research in the industry, this comprehensive spending guide was designed to help IT decision makers clearly understand the industry-specific scope and direction of public cloud services spending today and over the next five years.
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in more than 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world's leading tech media, data, and marketing services company. To learn more about IDC, visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights: http://bit.ly/IDCBlog_Subscribe.
Copy the following code into your site