Gartner has forecast enterprise spending on IT products and services in the EMEA region - Europe, Middle East and Africa - to bust the $1 trillion level in 2018, increasing by 4.9 per cent compared to 2017.
This year, total spending is expected to reach $974bn, but all areas of IT spending have been affected by currency fluctuations, which has had a knock-on effect on pricing and, hence, demand.
At the Gartner Symposium conference in Barcelona this week, Gartner analysts have been talking about the underlying trends affecting IT spending throughout the world.
John-David Lovelock, research vice president at Gartner, said Brexit has caused a major IT spending decline in the UK. "The UK has EMEA's largest IT market and its decline of 3.1 per cent in 2017 impacts the forecast heavily," he said.
"Weak Sterling and political uncertainty since Brexit are reducing UK IT spending in 2017, while other major IT markets in EMEA grew steadily."
Businesses are broadly reducing spending on owning IT hardware, and increasing spending on consuming IT as-a-service
The rapid acceleration of the euro against the US dollar has also had a significant effect on IT spending. Lovelock said countries in the Eurozone are looking to defer IT spending into 2018, in the hope or expectation of lower US prices.
"However, there is more to the recovery in 2018 than just currency effects," added Mr Lovelock. "Strong demand in the enterprise software and IT services categories across EMEA hint at significant shifts in IT spending patterns."
"The forecast highlights are that businesses are broadly reducing spending on owning IT hardware, and increasing spending on consuming IT as-a-service.
"In the total IT forecast the business trends are masked somewhat by consumer spending, but when we look at enterprise-only spending the new dynamics between the categories are much clearer."
Gartner claims that enterprise IT spending in 2017 was lower when compared to the overall IT spending forecast, showing a decline of 1.4 per cent. However, the enterprise software market has grown by 3.2 per cent this year.
We're seeing a pause in EMEA enterprise spending due to the switch to as-a-service offerings gaining momentum
Despite a slow year, total spending in this area will grow by 2.8 per cent in 2018, with IT services and software set to increase by four per cent and 7.6 per cent.
Meanwhile, spending on devices and communications services will continue to be pinched in 2018, growing at less than two per cent. As a result, it will fail to make up ground lost during 2017, as a sector.
The analyst group said that these statistics show that businesses are shifting from legacy systems to cloud models to improve agility and efficiency.
"In 2017, we're seeing a pause in EMEA enterprise spending due to the switch to as-a-service offerings gaining momentum," said Lovelock.
"Among the spending rebounds in 2018, however, we expect lagging markets: The data centre, devices, and communication services categories are all on pace to decline three per cent or more in 2017.
"Despite improvements in 2018, spending on servers, storage, network equipment, printers, PCs, mobile devices — and even hardware support — won't recover to 2016 levels."
He added: "The move to cloud services and opex [operational expenditure] on IT should serve to stabilise the growth in overall IT spending in EMEA in 2018 and beyond. We expect spending will spread out more evenly with fewer spikes of capital investment on hardware."
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