Predicted to total $1.1tn in 2024 by global research and consulting firm Gartner, IT spending by CIOs based across Europe is expected to be largely focused on IT services and software, with data centre systems not far from the top of the agenda.
Spending on IT services is projected to rise 11.8 per cent to total $427.4m — the highest amount cited across segments surveyed — and investment into software including AI and cloud is forecast to see the biggest year-on-year growth (14.5 per cent to $241.8m).
Data centre system spending, meanwhile, is reported to see growth of 8 per cent from 2023 to total $49.9m — remaining the segment with the lowest amount of investment predicted by Gartner.
Devices are cited to see spending growth of 4.6 per cent to $131.3m — ending a streak of decreases in investment — with communications services seeing a reported 4.4 per cent jump to total $297.7m.
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“Despite a conflated economic situation, IT spending in Europe continues to be recession-proof,” said John-David Lovelock, distinguished vice-president analyst at Gartner.
“CIOs in Europe who pursued the ‘growth at all costs’ strategy for over a decade, are now shifting the emphasis of ongoing IT projects toward cost control, efficiencies and automation, while curtailing IT initiatives with longer ROIs.”
The software state of play
While software will see the biggest surge according to the forecast, analysts say AI particularly is still to become a spending priority for tech leaders.
Other factors such as revenue generation, profitability and security are found to be fuelling IT spending among tech leaders.
Additionally, external use of large language models for customer service remains risky due to going beyond experimental means, and bringing susceptibility to harms such as bias and misinformation, which can harm user experiences.
Investment focus instead is expected to be on cloud and cybersecurity, as customer needs and threat actor tactics continue to evolve.
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“Maintaining a healthy profit margin has become pivotal for European corporations and this has ushered in a new wave of pragmatism,” added Lovelock.
“AI has also added a new level of concern around security ensuring that their systems are wrapped before hackers get near their sensitive data.”
Spending on security and risk management in Europe is predicted by Gartner to reach an estimated $56bn in 2024, a 16 per cent increase from 2023.
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