Enterprise wallets to sustain European IT growth as devices lag

Software and services set to save continent's tech growth into 2024, says Gartner

IT spending in Europe is set to hit $1 trillion by the end of 2023, and will see growth of 9.3 percent into next year, well up on this year's figure of 5.5 percent, according to stats from Gartner.

The tech industry research house said Europe's IT spending would reach $1.1 trillion in 2024, driven by investments in software and IT services.

Declining demand for devices — including laptops, desktops, phones and tablets — have created a drag on IT spending in the last couple of years. In Europe, it fell 13.3 percent in 2022 and is set to fall by 14.3 percent this year to $125 billion, according to Garter, with only modest growth of 4.6 percent expected next year.

John-David Lovelock, distinguished vice president analyst at Gartner, told The Register that spending on devices was barely holding on, while inflation was eating away at consumer purchasing power. "Once the purchasing power is gone, people start making choices to buy other things like food, which puts devices under a lot more pressure. Although consumer spending comes back a little bit next year, it's not coming back tremendously," he said.

It is left to enterprise IT spending to drive growth in the tech industry, although Europe slightly lags the US in that regard, he said.

"Europe tends to look at how things look before they leap a little bit more than the US, which is a much larger market," he said. Nonetheless, tech spending in Europe remains relatively recession-proof, regardless of concerning GDP figures across the continent.

IT services were set to see growth of nearly 12 percent next year, to reach $427 billion. Software would be the leading category in terms of growth in 2024, as it is this year, and reach $242 billion, said the analyst haus.

The US was caught in the doldrums after the years of the pandemic – when remote working and IT investment kept the economy up and running – and a desire to get back to more substantial growth, Lovelock said.

"Companies have strategies around how are they going to grow, how are they going to upgrade their revenue, their value proposition and branding and become the company that they want to be. But we're stuck in this transition. When you go from one tack to the other, you can get caught pointing into the wind, and you're stuck for a bit. They've been spending on IT to get through it, but 2024 is going to be a year of waiting for the economy, waiting for the world to turn with us," he said. ®

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