EMEA enterprise IT spending to decline 1.4 percent in 2011

Enterprise IT spending in Europe, the
Middle East and Africa (EMEA) will reach 604 billion EUR in 2011, a 1.4 percent
decline from 2010, according to Gartner.

Euro-based enterprise IT spending in the
region will grow by 2.3 percent in 2012. Western Europe will continue to slow
EMEA growth through 2015.

“The second recession is about to hit and
CIOs must decide which way to turn. The continued global economic uncertainty
and the eurozone crisis will impact your IT budget in 2012, and your business
will face difficult budgetary questions. Your choices will depend on which
geographies you operate in, your industry, and the strength of your
organization when the economic storm arrives,” said Peter Sondergaard, senior
vice president and global head of Research at Gartner.

The outlook for enterprise IT spending
growth in EMEA has been hit by the prospect of sharply lower economic growth in
the mature economies of Western Europe. Austerity measures brought in to deal
with the sovereign debt crisis will curtail government spending on IT in
particular and hinder economic growth, which will result in lower demand for IT
products and services from businesses.

Western Europe, which accounts for 80 percent
of EMEA enterprise IT spending, will see enterprise IT spending in euros
decline by 1.8 percent in 2011 and grow by only 1.5 percent in 2012. Government
(including education) IT spending will account for the largest share of Western
Europe enterprise IT spending in 2011, at 20 percent of the total. This sector
will decline by 4.8 percent in 2011 and 1.7 percent in 2012, and that it will
not recover to the level seen in 2010 until 2015.

“CIOs must build a realistic budget right
now to lead from the front, irrespective of market growth. By 2014, CIOs will
have lost effective control of 25 percent of their organization’s IT spending,
and by 2017, chief marketing officers may have a bigger IT budget than CIOs
do,” Sondergaard added.

Gartner identified three things that CIOs
must do: adopt a post-modern approach to business, pursue simplicity and employ
creative destruction.

First, they must adopt a post-modern
approach to business, a business centered on the customer and fuelled by the
explosion in information, collaboration, and mobility enabled by the cloud. In
EMEA, Gartner estimates that EUR 16 billion will be spent on public cloud
services in 2011, representing about 3 percent of EMEA enterprise IT spending.
This figure is estimated to reach EUR 20 billion in 2012, and public cloud
services will grow more than 10 times faster than overall IT enterprise
spending in EMEA through 2015.

Second, as business gets reinvented and
becomes highly dynamic, IT leaders must change their systems in order to
deliver simplicity to their customers and employees. To create simplicity CIOs
need to put customers and their needs at the centre of design and make the user
experience simple by building context-aware solutions. The demand for
simplicity has been bolstered by the shift to mobile technologies, and
context-aware computing is also assuming greater importance.

Third, IT leaders must embrace creative
destruction to eliminate legacy technologies, selectively remove low-impact
systems and take calculated risks to employ new solutions, the effects of which
will threaten or eliminate the old.

Gartner maintains that IT leaders must stop
being perfectionists and embrace calculated risks to surprise both their own
business and their competitors.

By Telecomlead.com Team

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