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February 4, 2010

IT spending in Western Europe to reach $68.6bn by 2013, says IDC

UK remains the highest spender in 2010

By CBR Staff Writer

Total government spending for hardware, software and IT services in Western Europe is expected to  increase from $56.6bn in 2008 to $68.5bn in 2013, according to research and advisory firm IDC.

Jan Duffy, research director of European government technology decision support at IDC Government Insights EMEA, said: “IT suppliers who want to capture a share of that growth must take pains to ensure that their service offerings address the need for modern infrastructures and application capabilities, streamlined processes, and a demonstration of cost containment or, even better, cost reduction.”

The study found that the pressure to right size government is likely to become a political issue in some Western European countries and this could result in increased interest in IT as a way to compensate for fewer staff.

The firm expects that the effects of the economic downturn will continue through 2010 in Western Europe, easing as the impact of fiscal and monetary stimulus packages becomes more evident. IDC Government Insights expects government sector IT spending to remain resilient through the forecast period, achieving a 3.9% CAGR and reaching $58.6bn in 2010.

The study found that from the three main technology groups hardware, software and services, the IT services will continue to increase its share of IT government spending, hardware spending will suffer a decline in 2010, while it will experience a correction in 2011 then remains flat through 2013. Software spending will experience a small increase in 2010, remaining flat in 2011.

Amongst the top five economies in Western Europe, the UK is the highest spender, Germany is next followed by France, Italy and Spain. As a group these five will represent $36.8bn in IT spending in 2010. Public administration and other compulsory activities represent the largest IT spending by central government, IDC said.

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