IT spending in EMEA is forecast to total $1.3 trillion in 2022, an increase of 4.7% from 2021, according to the latest forecast by Gartner. The 2022 growth rate will be slower than in 2021 when EMEA IT spending is expected to grow 6.3%.
The biggest change moving forward will be how IT is financed, not necessarily how much it is financed. “IT is transitioning from supporting the business to being the business — which means spending on technology shifts from a cost of operations (selling, general and administrative [SGA]) to a cost of revenue (COR), or possibly cost of goods sold (COGS),” said John Lovelock, distinguished research vice president at Gartner. “CIOs have a balancing act to perform, saving cash and expanding revenue.”
In EMEA, enterprise software spending is estimated to have the highest growth in 2022, driven by the rise in cloud spending. “Since the start of the pandemic, cloud delivery has demonstrated elasticity and flexibility. It scaled up when needed and scaled down when required,” said Lovelock. “CIOs will increasingly use cloud alternatives to secure the quickest time to demonstrate value of their IT investments.”
Gartner analysts estimate enterprise cloud spending will represent 12.5% of total enterprise IT spending in 2022. Infrastructure as a service (IaaS) and desktop as a service (DaaS) are expected to be the two segments where EMEA organisations will increase their spending the most in 2022, achieving 32.3% and 31.1% growth, respectively.
“The rise of enterprise application software, infrastructure software and managed services and cloud infrastructure services demonstrates that digital business is not just a one- or two-year trend – it is systemic and long-term,” said Lovelock.
After double-digit growth in devices spending in 2021, spending is expected to slow in 2022, with the segment growing 0.7% year over year. Employee’s device stack of PCs, tablets, laptops, and mobile phones continue to be optimal for hybrid work, enabling multilocation and flexible employee business productivity.
In the UK, IT spending will reach $223.3 billion in 2022, an increase of 6% from 2021. This is higher than the projected 4.7% growth for total EMEA IT spending in 2022. “Organisations in the UK are on pace to increase their IT spending by $14.4 billion in 2022, which is more than France, Germany, Italy and Turkey combined,” said Lovelock. “Remote work, remote education and telehealth are bolstering IT spending in government, education and healthcare which are among the top growth industries in the UK.”
IT spending in Germany is on pace to reach $167.3 billion in 2022, a 4.4% increase from 2021. Enterprise software spending is forecast to be the segment with the highest growth in 2022 and beyond.
In 2021, organisations in Germany will focus their spending on devices to respond to the acceleration of remote working and distance education. Devices spending is projected to increase 18% in 2021 and will remain high, reaching $24.2 billion in 2022.