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Publication date: 26 Feb 2024

Oil & Gas Among the European Industries with the Fastest-Growing Cloud Spending in 2024, Says IDC


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London, February 27, 2024 — According to the Worldwide Software and Public Cloud Services Spending Guide published by International Data Corporation (IDC), public cloud services spending in Europe will total $171 billion in 2024 and will reach almost $298 billion by 2027, recording a five-year (2022-2027) compound annual growth rate (CAGR) of 21%. Platform-as-a-service (PaaS) will continue to grow the fastest in the long run, fueled by the generative AI (GenAI) hype, which will drive cloud-based investments in AI software services.

While European industries continue to experience headwinds, the 2024 outlook looks more promising. Inflation is softening and a downward trend across Europe is expected to accelerate, despite localized challenges. In terms of cloud spending by country, Poland's growth will top the list in Europe, driven by the more favorable economic outlook boosted by an increase in real disposable income, lower inflation, higher nominal wages, and increased social benefits. At the bottom of the list, cloud spending will grow the slowest in the U.K, where the economy remains volatile, inflation remains higher than the rest of Europe, and a recession was announced in the second half of 2023.

“Despite macroeconomic challenges, cloud spending will continue to grow across all industries, supported by strong drivers such as GenAI, CloudOps, digital sovereignty, and sustainability,” says Andrea Minonne, research manager at IDC U.K. “As the economy remains volatile, it’s important for cloud providers to stay on top of industry trends by understanding the dynamics and priorities of different vertical markets.”

Looking at cloud spending by industry, oil & gas will be among those with the greatest year-on-year spending increases in 2024. This is in line with the strong profits the industry has achieved since the beginning of the war in Ukraine, which will impact oil & gas companies' IT budgets and their ability to implement innovation projects. Banking, retail, and telecommunications will continue to be the top-spending industries in public cloud in 2024, accounting for almost a third of the overall market value.

Focusing on the long term, software and information services will have the highest value CAGR in Europe, at 25%, over the five-year period. While challenges in the tech sector are not over yet, GenAI will be a focal point and will support cloud investments. Leveraging the capabilities of GenAI, tech companies can streamline processes rapidly and efficiently, supporting the existing workforce and the allocation of more time to strategic activities.

About IDC's 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 28 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.

For more information, contact: Andrea Minonne