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BARCELONA, Spain, November 7, 2019

Gartner Says IT Spending in EMEA to Return to Growth in 2020

Analysts Discuss the Outlook for the EMEA IT Market During Gartner IT Symposium/Xpo 2019, November 3-7 in Barcelona, Spain

IT spending in EMEA will return to growth at $798 billion in 2020, an increase of 3.4% from 2019, according to the latest forecast by Gartner, Inc.

“2020 will be a recovery year for IT spending in EMEA after three consecutive years of decline,” said John Lovelock, research vice president at Gartner. “This year declines in the Euro and the British Pound against the U.S. Dollar, at least partially due to Brexit concerns, pushed some IT spending down and caused a rise in local prices for technology hardware. However, 2020 will be a rebound year as Brexit is expected to be resolved and the pressure on currency rates relieved.”

Gartner analysts are discussing the macroeconomic trends affecting the IT spending market in EMEA this week during Gartner IT Symposium/Xpo, which is taking place in Barcelona until today.

Spending on Devices Still Down While Enterprise Software Spending Keeps Rising

In 2019, EMEA spending on devices (including PCs, tablets and mobile phones) is set to decline 10.7% (see Table 1). Higher prices — partly due to currency declines and a lack of new “must have” features in mobile phones — have allowed consumers to defer upgrades for another year. Devices spending will not rebound in 2020, but instead fall by 1.3%, as both businesses and consumers move away from spending on PCs and tablets.

After 2019, the communications services segment will achieve long-term growth despite fixed-line services in both the consumer and business spaces declining every year through 2023. While mobile voice spending is flat — mainly due to price declines — mobile data spending increases 3% to 4% per year, which is keeping the overall communications services market growing in 2020.

Enterprise software will remain the fastest-growing market segment in 2020. EMEA spending for enterprise software will increase 3.4% and 9.2% in 2019 and 2020, respectively. Software as a service (SaaS) will achieve 14.1% growth in 2019 and 17.7% in 2020.

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

 

2019 Spending

2019 Growth (%)

2020 Spending

2020 Growth (%)

Data Center 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)

Regulatory Compliance Fuels Spending

The complex geopolitical environment across EMEA has pushed regulatory compliance to the top of the priority list for many organizations. EMEA spending on security will grow 9.3% in 2019 and rise by 8.9% in 2020.

“Globally, security spending is increasing and being driven by the need to be compliant with tariffs, trade policies and intellectual property rights. In EMEA, privacy and compliance concerns, further driven by GDPR, take precedence,” said Mr. Lovelock.

The U.S. is leading cloud adoption and accounts for over half of global spending on cloud, which will total $140.4 billion in 2020, up 15.5% from 2019. In terms of cloud spending, the U.K. holds the No. 2 position behind the U.S. The U.K. spends 8% 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 predicts that organizations with a high percentage of IT spending dedicated to the cloud will become the recognized digital leaders in the future.

“Organizations in Europe, regardless of industry, are shifting their balance from traditional to digital — moving toward “techquilibrium,” a technological balancing point that defines how digital an enterprise needs to be to compete or lead,” said Mr. Lovelock. “Not every company needs to be digital in the same way or to the same extent. This move towards rebalancing the traditional and digital is clearly visible amongst EMEA companies."

More detailed analysis on the outlook for the IT industry is available in the complimentary webinar "IT Spending Forecast, 3Q 2019 Update: The Next Generation of Cloud."

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of 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 on which to base its forecasts.

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, 3Q19 Update.” This quarterly IT spending forecast page includes links to the latest IT spending reports, webinars, blog posts and press releases.

About Gartner IT Symposium/ITxpo

Gartner IT Symposium/Xpo is the world’s most important gathering of CIOs and senior IT executives, uniting a global community of CIOs with the tools and strategies to help them lead the next generation of IT and achieve business outcomes. More than 20,000 CIOs, senior business and IT executives worldwide will gather for the insights they need to ensure that their IT initiatives are key contributors to, and drivers of, their organization’s success. Follow news and updates from the events on Twitter using #GartnerSYM.

Upcoming dates and locations for Gartner IT Symposium/Xpo include:

November 11-14: Goa

November 12-14: Tokyo

March 2-4, 2020: Dubai

May 11-14, 2020: Toronto

About Gartner

Gartner, Inc. (NYSE: IT), is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow.

Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and objective resource for more than 15,000 organizations in more than 100 countries — across all major functions, in every industry and enterprise size.

To learn more about how we help decision makers fuel the future of business, visit gartner.com.

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