‘IT spending will increase by nearly four percent in 2023’

‘IT spending will increase by nearly four percent in 2023’

Gartner predicts that consumers and businesses in the EMEA region will spend 3.7 percent more on IT next year. The organization expects total spending of €1.3 trillion.

The forecast seems positive, but the numbers don’t take macroeconomic circumstances into account. Exchange rates affect international spending. Although Gartner expects corporate IT budgets to increase, the purchasing power of some organizations is on the decline. Software licenses and infrastructure are increasingly expensive. “EMEA CIOs will perform a balancing act with their IT budget”, Gartner said.

The United Kingdom is a good example of the gross-to-net gap. Here, Gartner expects the EMEA’s highest increase in IT spending (8 percent). “However, because of the weakness of the British pound compared to the US dollar, it translates into an overall decrease of 2.5 percent in US dollars”, Gartner VP Analyst John Lovelock explained.

IT spending in 2022

Macroeconomic influences make it difficult to assess whether the industry will come out ahead. Gartner based its forecast on market research, including the IT spending of recent years. The organization divided spending into five categories: data center systems, software, devices, IT services and communications services.

According to Gartner, communications services were the EMEA’s largest expense in 2022 (about €470 million euros). IT services come in at number two (€357 million). Next, we have software (€195 million), devices (€191 million) and data center systems (€45 million).

The difference between spending in 2021 and 2022 is limited to a few percent in most categories. Devices were an outlier. Here, spending dropped by 13 percent in one year. We covered the phenomenon in several articles over the past few months. Inflation is increasing worldwide, which means consumers have less purchasing power and buy fewer devices.

IT spending in 2023

Gartner expects device spending to continue to decline in 2023. The organization predicts a 2.6 percent decrease on top of last year’s drop. According to Gartner, software is headed in the right direction with an 8.6 percent increase. Spending on data center systems largely remains the same. Investment in IT services and communications services are up 6.6 percent and 2.3 percent respectively, Gartner said.

Tip: ‘CIOs struggle with rising expectations and slimmer budgets’