Western European businesses to increased IT spending by 3.5% in 2005

According to IDC, IT demand in the Western European business sector will grow 3.5% in 2005 to reach a value of almost $302 bln, with IT spending in the SMB sector forecast to exceed $160 bln. Small and medium-sized businesses (1?499 employees) represent 53% of total IT spending. This share will increase to 54% in the forecast period 2004 to 2009, as demand for IT increases among companies with less than 500 employees. IT spending in small companies (1?99 employees) will increase at lower than average growth (3.4%) in 2005, due to these companies’ cautious approach to IT. However, demand is expected to scale up to 4.2% in the next four years.

IT spending in the midmarket (100?499 employees) is anticipated to grow by 4% in 2005 and climb to 5.3% during the forecast period. IT vendors are increasingly fulfilling midmarket needs and helping the continuous shift in their attitude to IT adoption from tactical to strategic. Strong demand for IT is observed in the health and government sectors, and this is anticipated to continue over the next five years. In the midsize business, healthcare remains the most dynamic sector, with 8.3% growth in 2005 and 8% CAGR in the period 2005 to 2009. Investments in IT solutions, such as electronic patient records, will be part of health institutions’ plans to streamline processes to reduce costs and provide a better service.