According to a Gartner report, CIOs in Europe, the Middle East, and Africa (EMEA) expect IT budgets to grow by 4.4% in 2023, which is below the global inflation rate of 6.5%.
IT spending in EMEA is expected to reach $1.3 trillion in 2023, up 3.7% from 2022, with Germany, France, and the United Kingdom among the most mature markets in Western Europe. IT spending is expected to grow fastest in 2023, rising 5.2%.
Spending on Data Center Systems is expected to increase by 1% in 2023, while software will increase by 8.6%, IT services by 6.6%, communication services by 2.3% and devices by 2.6%.
Despite these increases, EMEA CIOs will have fewer resources than last year, owing to a triple squeeze of economic pressure, scarce and expensive talent, and persistent supply challenges. Although IT budgets are expected to increase by an average of 4.4%, this is less than the global inflation rate of 6.5%.
The above growth rates represent significant increases over the fiscal year 2022, when the majority of services and industries experienced declines and negative numbers as predicted. However, spending on enterprise software is expected to recover faster than other segments, with an 8.6% increase in 2023.
Spending on cloud software will prioritize transformation and efficiency, and EMEA CIOs will prioritize the cloud for new initiatives such as packaged business capabilities (PBCs) and data grids while maintaining the current on-premises environments. Spending on public cloud services in EMEA is expected to rise 18.2% year on year, from $111 billion in 2022 to $131 billion in 2023. Cloud software will account for 34% of total spending on enterprise software in EMEA.
However, the EMEA CIOs will balance their IT budgets. “For example, they will use digital technology to help other departments realize operational efficiency and cost savings and deploy digital technology to transform their company’s value proposition, revenue, and client interactions,” said John Lovelock, Distinguished Vice President Analyst at Gartner.
The sources for this piece include an article in ComputerWorld.