IT market of EMEA

2018: Growth of IT expenses on 5.8% to $953.6 billion is Gartner

On November 8, 2018 the Gartner analytical company published results of a research of IT market in EMEA (Europe, the Middle East, Africa; here Russia enters). Judging by promulgated data, the main catalysts of growth of expenses on information technologies in the region are the corporate software and IT services.

According to forecasts of experts, the volume of IT costs in EMEA at the end of 2018 will be $953.6 billion that is 5.8% more, than the previous year. Sales of software to the companies will rise by 12.7% in many respects thanks to the growing popularity of cloud solutions, having reached $108.8 billion, and flows on IT services will be measured by $286.7 billion, having increased by 8.9% relatively 2017. The volume of a segment of systems for data centers will rise by 5.4%, having been $46.3 billion.

The Segments of IT market in EMEA given to Gartner

The smallest growth rates will be shown by a segment of the equipment to which the computer equipment, smartphones, tablets, etc. belong. $155.7 billion will be spent for such equipment in EMEA at the end of 2018 in total that is 2.1% more than an indicator of year prescription.

Sale of consumer PCs in 2018 will drop by 9.1%. The market of mobile phones will grow by 4.7%, but in a year it will decline because of overcoming a pica of replacement of smartphones.

In a research easing of corporate demand for computers running the Windows 10 operating system is noted.

The 2018th is not the best year for IT expenses in EMEA — the vice president for the researches Gartner John Lovelock says. — the 5.8 percent expected growth includes inflow for 4% of the currency factor connected with appreciation of the euro concerning euro.

According to the expert, IT market in the region "got stuck" and will remain in such provision until uncertainty around plans of Britain for an exit leaves the European Union^[1].

2017: Growth by 1.1% to $974 billion thanks to the corporate software

According to analysts of Gartner, in 2017 total expenses on the information technologies (IT) in EMEA region (Europe, the Middle East and Africa) will reach $974 billion, at the same time the greatest gain will show a segment of the corporate software.

Experts counted previously that sales of systems for data centers in EMEA will rise only by 1.1% in 2017. The highest rates will be in a segment of the corporate software — the gain in 7.6%, despite the growing popularity of the concept of providing IT products in the form of services is noted.

According to the estimates of Gartner, at the end of 2017 the highest rates will be in a segment of the corporate software

In addition to services and software, demand for the IT equipment which regional sales in 2017 should increase by 2.6% grows.

According to the vice president for the researches Gartner John-David Lovelock, the enterprises in general reduce costs for ownership of the corporate software, at the same time, increasing expenses on consumption of IT services. In an overall outlook of IT business trends are, generally behind consumer spendings, but if to consider only costs for the corporate software, then observed dynamics becomes much clearer, the expert noted.

IT market of Great Britain still is the largest in EMEA region, and its decrease strongly influences the forecast. The weak pound sterling and political uncertainty from the moment of the declaration of Brexit led to decline of the British IT market by 3.1% in 2017 while other large IT markets steadily grow in EMEA region — Lavlok noted.

Gartner predicts increase in expenses on data centers, devices and IT services. At the same time costs will be distributed more evenly on segments, and only the share of investments into the equipment will decrease.^[2]

2012: Forecasts

On communication to opinion of experts of the British edition PAC, those from Chief information officers of the European companies which will receive in 2012 the bigger budget in comparison with 2011 will be true "lucky". For most of their colleagues 2012 will be held under the motto "Make More, Having Paid Less". And it will concern both the commercial sector, and state. However it will not lead to stagnation for end users and suppliers.

How CIO will solve such complex problem? Here will come to the forefront all those new technologies and technology models which declared themselves in 2010-2011:

Outsourcing

The next boom of outsourcing will be caused as reduction of IT budgets, and "lack of appetite" to the capital investments. Transactions based on cloud and SaaS of platforms will become positive drivers in this segment of the market. Outsourcing transactions at the same time will become more large-scale, and the largest service providers the first will benefit from this. The enterprises will actively use outsourcing schemes as they will provide them flexibility and cost reduction.

Control over cost

Though admissible minimum discrete flows will take place that business could respond to legislative and regulatory changes, any larger expenditure will be exposed to thorough examination and justification for investors. Especially it concerns projects with the term of return of investments (ROI) more than one year. Outsourcing contracts will also be actively reviewed towards reduction of cost.

"Clouds" in all forms

The model of use of infrastructure and applications of pay-as-you-go (pay for so many how many used) will gain bigger distribution, in many respects thanks to entry into the market of SaaS in 2011 of most mega-vendors, such as Oracle, SAP and Microsoft.

Mobile solutions

Use of tablets and smartphones in business will become universal, vendors will have to accept this call and to provide support of all transactions, analytical and network transactions on mobile platforms. The heat to passions will be added by the output of new Nokia Corporation devices on the Windows platform of Phone and tablets under Windows 8 in 2012.

Social networks

The tendency to "sociality" will become main in the market of business software. Oracle Social Network and recently purchased SAP CubeTree (within the transaction with SuccessFactors) will allow these vendors to compete with Salesforce.com/Chatter, Jive, Huddle, SharePoint and other solutions of this row. IBM in 2012 promises to issue the solution Connections. And the probable IPO of Facebook in 2012 will create new premises for use of this network at the level of the enterprises.

2011

IT expenses of the enterprises

Expenses on IT of industrial enterprises in the region of EMEA will reach 604 billion euros in 2011 that is 1.4% higher than indicators of 2010, Gartner reports. In calculation in euro, according to forecasts, in 2012 they will increase by 2.3%. At the same time in Western Europe the slowest gain of IT expenses up to 2015 will be observed.

Peter Sondergaard, the vice president of Gartner, noted that the second wave of recession "is in full swing" so Chief information officers should define a trajectory of the movement according to it. "The economic uncertainty proceeding at the global level and also crisis in the Eurozone will continue to have an impact on IT budgets in 2012. The enterprises will appear in a tough budget framework", - he said.

In spite of the fact that growth of IT expenses in Western Europe is extremely low, the most part of costs for information technologies in EMEA region – 80% are still the share of it. So, if in 2011 this indicator in Western Europe decreased by 1.8%, then in 2012 it can grow by 1.5%.

At the same time a considerable part of expenses on IT in the Western European market is performed by the organizations of a public sector, about 20%. For the end of 2011 the contribution of this sector to the total costs will decrease by 4.8%, and in 2012 – for 1.7%. Up to 2015 public sector expenses on IT will not be able to be recovered to the level of 2010.

According to Sondergaard, Chief information officers need to build real budgets already now. By 2014 they will lose control over about 25% of expenses on IT of the organizations, and by 2017 the budget on Chief information officers for marketing can already exceed the similar budget of Chief information officers. "Therefore CIO should rethink the roles in the companies", - he considers.

The expert recommends to Chief information officers to use at this conjuncture three key approaches. First, this use of "postmodern" approach to business, at the heart of which – customer focus and also mobile and cloud computing and means of joint work. In EMEA region, by Gartner estimates, on clouds 3% of all IT expenses in 2011 or 16 billion euros is necessary, and in 2012 this indicator will be 20 billion euros.

The expert defines the second approach as "aspiration to simplicity" for employees and clients. It means that in the center of IT infrastructure the client and his requirements should be placed, and all solutions should be constructed proceeding from such kliyento-centric model. It called the third approach "creative destruction": It is offered to refuse to chief information officers intuitively and gradually outdated hardware-software solutions and also to take consciously the risk and to test new technology tools.

Notes