E is for Europe – The World’s Biggest Economy Goes Hi-Tech, According to IDC

LONDON, APRIL 18, 2000 – Technology investment in Western Europe will increase 10% this year and 11% in 2001 as European business begins to march ahead of its global competitors in many crucial technology areas, according to new research from IDC.

"This is a terrific time to be doing business in Europe," said Stephen Minton, EMEA research manager at IDC. "As we move into the age of the global market, European companies are proving they are not ready to be left behind by their North American and Asian rivals."

Driven by the rise of the Internet and ebusiness, European companies have debunked the theory that the after-effects of year 2000 would delay or inhibit IT spending this year. With IT services growing 13% and the software market expanding 14%, year 2000 actually represents boom time for IT vendors in Europe. Even the server market, hardest hit by Y2K effects during the last quarter of 1999, will recover to healthy growth of 8% this year, rising to 9% in 2001.

IDC's European Black Book shows strong growth across the region throughout a forecast period that extends to 2003. The United Kingdom remains one of the most dynamic IT markets in the world, growing 11% this year. "By 2003, the United Kingdom will catch up with Germany in terms of technology investment," Minton said. "There are a lot of doom-mongers in the UK who like to talk about lagging behind in technology investment, but this is clearly not the case."

Another rapidly growing technology market in Europe is France, which has undergone a remarkable transformation over the last year. France was a slow-starter in the new ebusiness world, and 12 months ago appeared to be falling behind. The Black Book forecasts, however, now show technology investment in France growing 11% this year and 12% next year, driven by a major recovery in the IT services market, now growing by 14% each year. "The French market has taken a lot of people by surprise," Minton said. "One year ago, most economic observers were happily explaining the reasons for the slow performance of the French economy, in which technology investment plays a hugely important role. Now, despite ongoing issues of bureaucracy and labor laws, France has emerged as one of the fastest-growing technology markets in Europe, and a rapidly growing economy."

Scandinavia is another hot area for technology investment within Europe, particularly in new, emerging technologies. The IDC/World Times Information Society Index recently ranked Sweden as number one for the first time, ahead of the United States. This is confirmed in the Black Book forecasts, with IT spending in Sweden growing 10% this year and 11% next year. Strong growth this year is also expected in Spain (12%), Greece (11%), Ireland (14%), Italy (11%), and Portugal (11%).

"Software and services continue to lead the way," Minton said. "The move toward a service-driven market is now inevitable and unstoppable. There's still a lot of money to be made in hardware, but increasingly we're going to see hardware shrink into a smaller part of the market for total solutions. The message is simple get into Europe, and get into services."

IDC's European Black Book Q4 1999 Year-End Review and Forecasts (IDC #A03G) is a bulletin that accompanies the definitive Western European Black Book. These quarterly bulletins examine major market and economic developments and deliver a rolling examination of the changing European opportunity. This bulletin is available to purchase from your local office.

About IDC

IDC delivers dependable, relevant, and high-impact data and insight on information technology to help organizations make sound business and technology decisions. IDC forecasts worldwide IT markets and technology trends and analyzes IT products and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC is committed to providing global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of International Data Group, the world's leading IT media, research, and exposition company.

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