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ICT spending in Europe will grow?

ICT spending in Europe will grow?

July 26, 2022

The economic recession is not going to impact all European ICT markets equally, according to IDC.

According to the most recent edition of Black Book Live published by International Data Corporation (IDC) in June 2022, ICT spending in Europe will grow by 3.7% year on year in 2022. Considering the unstable macroeconomic and political situation, IDC prepared an alternative forecast, labelled a “recession scenario,” which reflects an expected negative impact and shows a modest contraction in ICT spending of 2.2% for the year.

In the event that European economies lapse into a recession, it will have a major impact on devices spending. Technologies like security appliances, infrastructure as a service, software, and telecom equipment are expected to be less severely impacted.

Worsening economic conditions will slow down demand for PC and tablets in Europe, leading to large inventories, while factors such as the increasing cost of living, product shortages, and suspended shipments will also inhibit the market. In 2022, “recession scenario” spending will be 5% lower than the spending forecast in the standard outlook of Black Book Live. In 2023, the difference will be 9.8% lower.

According to IDC, any recession can additionally impact the infrastructure markets in Europe, which are already suffering from logistics issues and a lack of components. Growing interest rates will force companies to reduce loans from banks, which will also slow demand for infrastructure.

However, security hardware spending is expected to stay stable during a possible recession, maintaining 99.5% of the current Black Book forecast in 2022 and 98.2% of forecast spending in 2023. Many organisations from both public and private sectors are going to increase investments in security, due to the need to protect their data from cyberattack.

Investments in cloud infrastructure are also expected to stay strong: In addition to benefits like flexibility, cost effectiveness, and scalability, cloud will enable increased resilience and business continuity in the event of a recession.

Related to security, spending on software solutions will also be marginally affected by a recession. Demand for AI platforms and applications that are part of organization’s digital transformation agenda is expected to continue unabated.

The European telecom equipment market is likely to remain relatively resilient during an economic downturn. Data volumes will continue to increase, and telcos will need to invest in routing and wireless equipment.

Categories : Around the Industry

Tags : Business EU ICT Markets Recession Security Spending

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