EMEA IT spending to rebound in 2011 by 1.3%: Gartner

by CXOtoday Staff    Nov 09, 2010

increase in salesEnterprise IT spending in Europe, the Middle East and Africa (EMEA) will rebound in 2011 and reach $795.2 billion, showing a 1.3 percent increase from 2010, according to Gartner (NYSE:IT). However, EMEA will be the only region to show a decline in IT spending in both 2009 and 2010, with the spending forecast totaling to $784.8 billion in 2010, a decline of 2.1 percent from 2009.

“This decline in IT spending in 2010 is placing EMEA as the slowest region to fully overcome the downturn,” remarked Peter Sondergaard, Sr VP and global head of research, Gartner. “We expect Western Europe to record the worst decline in EMEA in 2010 (-3.3 per cent), and experience the slowest long-term growth rate with a compound annual growth rate of 0.8 per cent through 2014,” Sondergaard further added.

Gartner estimated the IT spending in government in EMEA to decline 2.8 percent in 2010 and total $139.6 billion. Sondergaardalso stated that, it will exhibit slow growth through 2014 as the public sector continues to focus on bringing budget deficits under control during the next five years.

Gartner analysts said as governments scale back their spending and social support, Western Europe is not expected to return to stronger enterprise IT spending growth until 2012.

In 2010, the computing hardware market is the only segment to return to growth in EMEA with hardware spending forecast to total $79.4 billion, a 4.6 percent increase from last year.

Of the hardware segments, storage was the least affected in 2009 and has the best overall outlook through to 2014, as storage capacity demands continue to grow exponentially.

Also the IT services market continues to struggle in EMEA and is anticipated to decline 5.6 percent and reach $234.0 billion in 2010.

From 2012, Gartner predicts that enterprise software spending in EMEA will surpass growth in spending on hardware, and this trend will continue through 2014 as organisations begin a new software applications replacement cycle.