According to the latest Gartner forecast, IT spending in Europe is predicted to total $1.28 trillion (£990bn~) in 2025, marking an increase of 8.7% over 2024.

What’s more, next year is poised to set a record as the highest growth rate in IT spending in a single year in Europe since the post-pandemic surge in 2021.

Analysts from the technological research and consulting firm have pointed to the current and ongoing focus on AI as the major underlying driver for the projected increase.

“In 2024, the surge of building out AI-related infrastructure by technology providers is driving high levels of spending on data center systems in Europe,” explained John-David Lovelock, who serves as distinguished VP analyst at Gartner.

“CIOs in Europe will continue investing in public cloud end-user spending, which is estimated to reach $123 billion in 2024, and grow their security spending, projected to reach $47 billion in 2024.”

Europe’s Spending Priorities in 2025
European businesses that have better recognised IT’s value during the pandemic are set to significantly boost IT spending in 2025 to remain competitive and increase revenue, Gartner said.

In particular, and aided by a surging interest for generative AI (GenAI) solutions, European chief information officers (CIOs) will drive their budgets into an era of high growth and innovation, suggested the research firm.

“The limited success of many pilots and proofs of concept (POCs) in 2024 will push European organizations to shift from building their own GenAI solutions to buying and implementing partner solutions in 2025,” added Lovelock.

In total, Gartner estimates spending on IT services related to AI in Europe will grow from $78bn (£60bn~) in 2024 to $94bn (£72bn~) in 2025.

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European Data Centre Trends
Meanwhile, end-user spending on servers in Europe is estimated to grow 25% in 2024 due to increased demand for AI-optimised servers. Spending on servers is set to continue to grow in 2025, albeit at a slower pace (11%).

“Europe has seen a remarkable 46% increase in server spending by technology providers in 2024. In 2025, technology companies will continue building out the infrastructure needed for training GenAI models today and inferencing them in the future,” remarked Lovelock.

Full Breakdown of Forecasted Spend
In terms of the full breakdown of Gartner’s European IT spending forecast, software will see the largest percentile growth from 2024 (13.2%), with 2025 spend equating to $288bn (£223bn~).

This is followed by devices at 9.3% (with total 2025 spend forecasted to be $146bn or £113bn~), and IT services at 9.2% ($489bn, or £378bn~).

Spending on data centre systems is predicted to grow 8.7% (equating to $54bn in 2025, or £41bn~), while communications services is set to grow 3.6% (worth $302bn in total in 2025, or £233bn~).