IT Spending in Europe Set to Soar to $1.1 Trillion in 2024, Fueled by Cloud and Cybersecurity Investments

In a recent forecast, Gartner predicts that IT spending in Europe is poised to reach $1.1 trillion in 2024, marking a notable 9.3 percent increase from the previous year. The region is on track to surpass the $1 trillion milestone by the end of 2023, reflecting the growing significance of technology in business operations.
IDC forecast on IT spending in EuropeAccording to John-David Lovelock, Distinguished VP Analyst at Gartner, the shift in strategy among Chief Information Officers (CIOs) in Europe is evident, moving away from a “growth at all costs” approach to focusing on cost control, efficiencies, and automation. This adjustment includes a reduction in investments with longer Return on Investment (ROI).

While artificial intelligence (AI) remains a priority for CIOs, it is not the primary spending focus. Factors such as revenue generation, profitability, and security are driving IT spending in Europe for the coming year.

Cloud and Cybersecurity Take Center Stage

Software and IT services emerge as the leading segments where European CIOs plan to increase spending in 2024. Notably, new investments are predominantly directed towards cloud options, with Infrastructure as a Service (IaaS) expected to grow by 27 percent in 2024. This shift reflects a broader trend of embracing cloud solutions for enhanced efficiency and flexibility.

Cybersecurity also takes a prominent role in the spending landscape, with a forecasted $56 billion allocation in 2024, representing a 16 percent increase from the previous year. The rise of artificial intelligence has heightened concerns about security, prompting organizations to fortify their systems against potential breaches.

Talent Shortages Drive IT Services Growth

The demand for IT services in Europe is partly fueled by talent shortages within in-house IT departments. The migration of IT skills towards technology and service providers (TSPs) is notable, as CIOs seek external expertise to bridge gaps in their capabilities.

Consumer Spending Outlook and Regional Trends

Inflation’s impact on consumer purchasing power is acknowledged, and while both businesses and consumers are expected to increase spending on devices in 2024, the pre-pandemic levels of IT spending on devices may not be revisited until 2027.

Austria, Ireland, and Finland are anticipated to experience the most significant rebound in consumer spending in 2024. Cloud adoption emerges as a key differentiator between mature and developing countries. The top three mature countries—U.K., Germany, and France—are projected to represent 51 percent of total IT spending in Europe in 2024, while developing countries like Hungary and Poland are expected to see a 9.2 percent increase in IT spending.

The lack of available cloud-specific skills remains a significant barrier in developing countries, hampering the adoption of cloud applications, platforms, and services. Mature countries, on the other hand, benefit from their size, attracting cloud providers and IT talent.

As the technological landscape evolves, European organizations are strategically navigating their IT investments to ensure sustained growth, efficiency, and resilience in an ever-changing digital environment.