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August 23, 2012

Annual IT spending by Western European utilities to cross $13bn by 2016: report

The annual IT spending by Western European utilitie to reach $10.5 bn in 2012

By CBR Staff Writer

Annual IT spending by Western European utilities is expected to cross $13 bn, recording a combined annual growth rate (CAGR) of 5.1% by 2016, according to IDC Energy Insights.

The report found that the annual IT spending by the utilities in the region is expected to reach $10.5 bn in 2012, with the majority of 62.1% of IT spending being dedicated to IT services.

Software spending in the utilities industry by technologies and sub technologies over a five-year span (2011-2016) is expected to see a large growth, at a CAGR of 7.2 %, reaching $3.1bn by 2016.

IT services will experience a growth of 4.9%, but the hardware sector will grow below average at 3.1% between 2011 and 2016.

IDC Energy Insights senior research analyst Gaia Gallotti said the need to reduce costs and achieve operational excellence together with the need to comply with energy policies and regulation will continue to drive utilities’ ICT investments.

"This translates into an estimated total Western European utilities’ 2011-2016 CAGR of 5.1%," Gallotti said.

According to IDC’s Energy Insights report, electricity companies will take a prominent share of IT spending in 2012, at 66.9% reaching $7bn. Gas and water utilities will account 16% and 13% respectively.

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Out of the total IT spending by the utilities, IT services will lead with a 62.1% share, followed by IT services which include packaged software and hardware accounting 22% and 15.9% of IT spending respectively.

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