Publication date: 25 Sep 2023
European ICT Spending Remains Strong, with Signs of Even Greater Market Expansion Next Year, Says IDC
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For more information, contact:- Zsolt Simon (zsimon) Email: zsimon@idc.com Phone number: +36 308 398 663
Prague, October 5, 2023 – According to the Worldwide ICT Spending Guide: Enterprise and SMB by Industry, July (V2 2023) release published by International Data Corporation (IDC), European ICT spending will reach almost $1.1 trillion in 2023 and will post a 5.3% five-year compound annual growth rate (CAGR) ending in 2027. Investments in automation, artificial intelligence platforms, security software, and software tools will be major drivers of continuous spending on ICT.
Inflation, increased cost of living, high interest rates, and labor market uncertainty are among the strongest inhibitors to consumer spending, especially on non-essential products and services. European businesses have become more cautious about their spending as well, and business priorities have shifted toward reduction of operational costs and preservation of profits. Nonetheless, European software spending will record double-digit year-on-year growth in 2023, while hardware will be the only technology group to register a decline in spending compared to 2022, due to the weakened demand for devices.
“The outlook for total European ICT spending in 2023 is positive, due to high demand for AI and application platforms as well as security software,” says Zsolt Simon, senior research analyst at IDC Europe. “We are seeing signs of an even greater market expansion next year, driven by digital transformation in European industries such as automotive, oil & gas, utilities, and healthcare providers, with organizations investing in technologies to bolster innovation and gain a competitive advantage.”
In the B2B segment, banking, telecommunications, and the federal/central government will account for the largest ICT spending in 2023. Migrating to cloud, modernizing legacy infrastructure, and implementing AI will be key growth drivers. Energy (including utilities and oil & gas industries) will be one of the fastest-growing sector details in 2023. In an era marked by a transition to green operations, technology spending will be crucial for organizations in the oil & gas sector to improve environmental, social, and governance (ESG) performance and enable new revenue streams with new business models.
Among all industries, software and information services will increase its ICT spending the most by 2027, posting a CAGR of more than 10%. The industry experienced some turmoil in 2022 and 2023 linked to increasing infrastructure costs, industry layoffs, and decreased profits, but software and information services organizations are expected to stabilize and ramp up their innovation efforts, including a stronger focus on emerging trends such as generative AI.
GenAI will be a hot area for investment, as it is considered to have the ability to increase the value derived from data and analytics and automation, as well as supporting enhanced customer experience. New investments are expected in the area of digital health, as the accelerating adoption of 5G paves the way to advanced connectivity and more flexible digital healthcare services.
About the IDC Worldwide ICT Spending Guide: Enterprise and SMB by Industry
The Worldwide ICT Spending Guide: Enterprise and SMB by Industry examines the ICT market opportunity across SMBs and enterprise end users, market sizing 115+ technologies, 28 industries, 5 company sizes, and 53 geographies. This comprehensive database delivered via IDC's Customer Insights Query Tool allows the user to easily extract meaningful information by viewing and comparing data trends and relationships across ICT markets and segments.
The 28 industries included in the IDC's new industry taxonomy are: Consumer; Banking; Insurance; Capital Markets; Healthcare Payer; Healthcare Provider; Life Sciences; Telecommunications; Oil and Gas; Utilities; High Tech and Electronics; Aerospace and Defense; Automotive; Industrial and Other Manufacturing; Chemicals; Consumer Goods; Agriculture and Fishing; Mining; Retail; Software and Information Services; Travel and Transportation; Hospitality and Leisure; Media and Entertainment; Engineering, Construction, and Real Estate; Professional and Personal Services; Education; Federal/Central Government; State/Local Government.
About IDC
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.