The western European IT market hit rock bottom last year but is facing a brighter future as hardware sales will grow by over six per cent next year, analyst IDC has predicted.
Western European IT markets are set to show modest growth of two per cent this year, reaching $253bn (£161bn), and the outlook for 2004 is better, according to IDC's figures.
Next year's overall IT market is expected to increase 5.77 per cent to $267.2bn, and hardware sales will pick up.
"We expect some essential hardware renewals will take place in 2004 but companies will have a cautious attitude to spending on large roll-outs after being burnt before," said Elsa Opitz, analyst at IDC.
Packaged software and services will account for the majority of this year's two per cent rebound, following 2002's zero growth.
According to Opitz, the growth in packaged software is down to "simplification, management and consolidation" of business practices, as businesses attempt to cut costs and increase return on investment.
Many companies require hardware renewals as they strive to get more out of new software features.
Nick Patching, sales manager of iSeries at Morse's IBM division, said: "Hardware renewals could well pick up next year as customers try to optimise new applications and take advantage of new hardware features providing resilience and reliability.
"But from our perspective we always have renewals because we have customers on different cycles."
Adam Austin, director of marketing at Computacenter, said that predicting what would happen is difficult.
"We are not yet seeing customers coming to us asking for refreshes," he said. "But there is good logic in it coming in 2004 because there have not been major refreshes since the preparations for 2000."
The research also predicted that the fastest growing markets would include mobile connectivity products, web services and converged devices.
And the focus on security issues would continue, fuelled by the threat of terrorism and cyber-crime, IDC said.
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