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Three-Year IT Spending Slump to “End in 2020”, as Green Shoots Emerge

After a three-year slump, EMEA IT spending will return to growth in 2020, Gartner predicted today, in a rare glimmer of good news likely to reverberate up the channel.

EMEA IT spending will hit a significant $798 billion (£620 billion) in 2020, an increase of 3.4 percent from 2019, according to the latest forecast by the research house.

Enterprise software will remain the fastest-growing market segment in 2020, the firm believes. A highlight: SaaS achieving projected 17.7 percent growth in 2020.

PCs, tablets and mobile phones) meanwhile is set to slump over 10 percent in 2019 and despite next year’s overall IT spending rebound, will continue to fall, the research house and consultancy projects, albeit at a slower 1.3 percent.

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EMEA IT Spending Forecast (Millions of US Dollars)

 

2019 Spending

2019 Growth (%)

2020 Spending

2020 Growth (%)

Data Centre Systems

42,052

-3.8

42,949

2.1

Enterprise Software

109,351

3.4

119,377

9.2

Devices

116,346

-10.7

114,833

-1.3

IT Services

282,885

0.4

297,985

5.3

Communications Services

221,523

-6.3

223,102

0.7

Overall IT

772,156

-3.2

798,246

3.4

Source: Gartner (November 2019)

EMEA IT Spending: Gartner Bets on Brexit Resolution

Gartner goes where angels fear to tread however, predicating part of this prediction on a belief that Brexit will be “resolved” and the pound rebound.

As John Lovelock, research vice president puts it: “This year declines in the euro and the British pound against the US dollar, at least partially due to Brexit concerns, pushed some IT spending down and caused a rise in local prices for technology hardware.

He adds in the report: “However, 2020 will be a rebound year as Brexit is expected to be resolved and the pressure on currency rates relieved.”

It’s bet many would be willing to take the other side of: indeed the European Commission just today predicted that the European economy “looks to be heading towards a protracted period of more subdued growth”.

Europe: “Troubled Waters Ahead”

As Valdis Dombrovskis, VP for the “Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union” (who said Europe doesn’t do good job titles?), put it: “We could be facing troubled waters ahead: a period of high uncertainty related to trade conflicts, rising geopolitical tensions, persistent weakness in the manufacturing sector and Brexit. I urge all EU countries with high levels of public debt to pursue prudent fiscal policies and put their debt levels on a downward path.

Regtech, Security Spending Rising… 

Regulatory compliance is now top of the priority list for many organisations, Gartner projects, with spending on security to rise by 8.9 percent in 2020.

In terms of cloud spending, the UK holds the No. 2 position behind the US. The UK spends eight percent of IT spending on public cloud services, which will total $US 16.6 billion in 2020, up 13.2% from 2019. In EMEA, the overall spending on public cloud services will reach $57.7 billion in 2020, up from $50 billion in 2019.

Gartner’s IT spending forecast methodology relies on analysis of sales by thousands of vendors across the entire range of IT products and services.

See also: “Kill Zombies” and 5 Other Top Tips on Innovation, by 12 Leading CEOs


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CBR Staff Writer

CBR Online legacy content.