ICT spending in Europe is expected to grow by 2,8% YoY in 2023 in constant currency terms, reaching $1184,5-billion, says International Data Corporation (IDC).
The research organisation’s Worldwide Black Book: Live Edition says that despite the challenging macroeconomic climate, software and services investments will continue to grow, exceeding the growth of overall ICT spending. Cloud migrations will accelerate as many companies will try to mitigate the adverse effects of the impending recession and its accompanying disruptions.
Platforms such as AI and business intelligence will continue to receive heightened attention as they enable organisations to attain a competitive edge. During turbulent geopolitical situations, companies typically increase investments in security solutions due to intensified cyberattacks and emerging regulations.
However, continued inflation in many countries, weakening consumer confidence, and export disruptions has created uncertainty that is adversely affecting some hardware markets – mainly PCs, tablets, and monitors. The first signs of recession in some European countries and the subsequent slowing business activity will also negatively affect the server and storage infrastructure markets which are projected to record a YoY decline in 2023.
Infrastructure spending (excluding infrastructure as a service) via indirect channels is expected to decline in Europe by 1,2% YoY in 2023.
By 2026, almost half of server and storage spending will continue to be generated through the channel. “Partners will continue to help vendors in maintaining robust connections with customers in order to address the ever-evolving customer needs for holistic solutions rather than delivering infrastructure components,” says Lubomir Dimitrov, research manager with IDC Data & Analytics, Europe.
The increased emphasis on digital transformation has resulted in changes in customers’ expectations, driving the demand for customised multi-vendor solutions that cater to specific customer segments and industries. This resulted in increased spending flow from indirect sales through partners. Spending on software and services is expected to continue driving overall market growth.
By the end of 2023, approximately 58% of software spending – ie. applications, application development and deployment, and system infrastructure software – is forecast to go through the channel. However, the increasing number of companies transitioning to cloud will continue to make the direct channel an important source of revenue generation to vendors.