• Cloud and cyber threats pushing European IT spending to $1 trillion next year

    960 640 Stuart O'Brien

    IT spending in Europe is projected to total $1.1 trillion in 2024, an increase of 9.3% from 2023, as businesses allocate more funding to cloud solutions and heading off cyber threats.

    That according to the latest forecast by Gartner, which says that despite a conflated economic situation, IT spending in Europe continues to be recession-proof.

    John-David Lovelock, Distinguished VP 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.”

    Although artificial intelligence (AI) is a priority for CIOs this year and next, it is not yet a spending priority. There are other factors such as revenue generation, profitability and security fueling IT spending in Europe next year. “Maintaining a healthy profit margin has become pivotal for European corporations and this has ushered in a new wave of pragmatism,” said Lovelock.

    Software and IT services are the two segments where CIOs in Europe are expected to increase their spending the most in 2024.

    While there is sufficient spending within data center markets to maintain the existing on-premises data centers, new spending continues to skew toward cloud options (including infrastructure as a service [IaaS]), which is expected to grow 27% in Europe in 2024. CIOs in Europe are also shifting their priorities internally, including enhancing cybersecurity spending in the cloud and planning for AI and generative AI (GenAI).

    “AI has also added a new level of concern around security ensuring that their systems are wrapped before hackers get near their sensitive data,” said Lovelock. Gartner forecasts spending on security and risk management in Europe to reach an estimated $56 billion in 2024, a 16% increase from 2023.

    Table 1. Europe IT Spending Forecast (Millions of U.S. Dollars)

      2022 Spending 2022 Growth (%) 2023 Spending 2023 Growth (%) 2024 Spending 2024 Growth (%)
    Data Center Systems  












    Devices       146,391 -13.3        125,483 -14.3        131,301 4.6
    Software        184,362 2.6        211,182 14.6        241,837 14.5
    IT Services        347,425 2.3        382,306 10.0        427,350 11.8
    Communications Services  












    Overall IT        995,836 -2.2     1,050,417 5.5     1,148,131 9.3

    Source: Gartner (November 2023)

    Some of the growth in IT services is due to talent shortages in IT departments in Europe. “There is a migration of IT skills away from the enterprise IT department toward technology and service providers (TSPs),” said Lovelock. “CIOs do not have the employees nor the talents to do all the work required and turn to IT services firms to fill in the gaps.”

    Inflation continues to impact consumer purchasing power, and while businesses and consumers are expected to increase their spending on devices in 2024, the level of IT spending on devices is not estimated to go back to 2021 levels until 2027. In Europe, Austria, Ireland and Finland are projected to record the biggest bounce back in consumer spending in 2024.

    The top three most mature countries in Europe will represent 51% of total IT spending in Europe in 2024. IT spending in the U.K., Germany and France is projected to total $588 billion in 2024, up 9.8% from 2023.

    Among the international monetary fund (IMF) developing countries (Hungary and Poland), IT spending is estimated to total $32.3 billion in 2024, up 9.2% from 2023.

    Investment in cloud is a key differentiator between mature and developing countries. Not all cloud application, platforms and services are offered in emerging countries which impairs adoption. “The lack of cloud specific skills available to deploy, maintain and run cloud is a significant barrier in developing countries Mature countries are large enough to attract cloud providers and IT talent,” said Lovelock.

    Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of the sales by over a thousand vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

    The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 3Q23 Update.”

    Photo by Carlos Muza on Unsplash


    Stuart O'Brien

    All stories by: Stuart O'Brien

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