IT Spending in EMEA to Exceed $1 Trillion in 2018, Gartner Says

IT spending in EMEA is projected to total $1 trillion in 2018, an increase of 4.9 percent from estimated spending of $974 billion in 2017, according to the latest forecast by Gartner, Inc.

In 2017, however, all categories of IT spending in EMEA underperformed global averages. Currency effects played a big part in the weakness in 2017, and will also contribute to the strength forecast in 2018.

"The U.K. has EMEA’s largest IT market and its decline of 3.1 percent in 2017 impacts the forecast heavily," said John-David Lovelock, research vice president at Gartner. "Weak Sterling and political uncertainty since Brexit are reducing U.K. IT spending in 2017, while other major IT markets in EMEA grew steadily."

Another significant currency effect is the rapid appreciation of the Euro against the U.S. Dollar— it provides an incentive for Eurozone countries to defer IT spending to 2018 where possible, in anticipation of even lower prices in U.S. Dollars.

"However, there is more to the recovery in 2018 than just currency effects," added Lovelock. "Strong demand in the enterprise software and IT services categories across EMEA hint at significant shifts in IT spending patterns."

The forecast highlights that businesses are broadly reducing spending on owning IT hardware, and increasing spending on consuming IT as-a-service. "In the total IT forecast the business trends are masked somewhat by consumer spending, but when we look at enterprise-only spending the new dynamics between the categories are much clearer," Lovelock said.

EMEA enterprise IT spending in 2017 was weaker than the overall IT spending forecast, declining 1.4 percent. The only category predicted to show enterprise spending growth in 2017 is the enterprise software market at 3.2 percent.

In 2018, total enterprise spending in EMEA is on pace to grow 2.8 percent. All categories of enterprise IT spending will return to growth in 2018, but only IT services and software will grow strongly at 4 percent and 7.6 percent, respectively. Enterprise spending on devices and communications services continue to fall behind in 2018, growing at 2 percent or lower, thus failing to recoup the losses of 2017.

(For more information visit https://www.gartner.com.)