Europe

Citation

Blake, M. (2004), "Europe", The Electronic Library, Vol. 22 No. 2. https://doi.org/10.1108/el.2004.26322bab.001

Europe

Europe

IT Spending in Europe

Spending on application software – such as ERP and call centre applications – tops the 2004 buying list for IT execs in Germany, France, the Netherlands, and the UK. But, according to a new report by Forrester Research B.V., most hardware categories face a sluggish year, and system integrators will have a hard time selling engagements to thrifty firms.

To uncover the most robust insight into the likely 2004 investment intentions of IT decision-makers in European user companies, Forrester conducted a survey of 490 executives located in France, Germany, the Netherlands and the UK.

“In 2004, IT spending will grow at a healthy rate in France and the UK but will remain flat – or even go negative – in Germany and the Netherlands,” said Forrester Senior Analyst Charles Homs. “ERP, content management, and Web services will benefit from higher spending, but the outsourcing boom spells trouble for IT consulting.

“The UK is Europe’s fastest-growing market for IT spending, with 6.5 per cent growth in 2003 and a planned 6.2 per cent in 2004. This will accelerate the IT outsourcing boom and enable large firms to make investments in new projects, without lifting the grey clouds hovering over consultants and systems integrators. French firms plan to buy ERP and supply chain apps. Expectations of 3.6 per cent growth in 2004 feed into 62 per cent of French firms increasing their spending on application software – the highest increase of any technology category. ERP vendors and supply chain apps vendors will benefit most from this increase: 48 per cent of French firms will upgrade or pilot ERP software, and 44 per cent will do the same with supply chain apps.”

Forrester’s survey found that negative growth will continue to dog the German market. IT spending contracted 4 per cent in 2003, and a 1 per cent reduction looks likely in 2004. To cut costs, all sizes of firms – from those with 500 employees to those with more than 5,000 employees – expect to spend more on outsourcing, but less on consultants and integrators. And in the Netherlands, large firms will drag down IT spend. Despite positive signs of IT investment from firms with fewer than 5,000 employees, larger Dutch firms will drag IT spending growth in 2004 down to a minute 0.3 per cent. But this won’t stop IT directors from testing out emerging technologies like Web services, Linux and wireless LANs.