BMI View: We have downgraded the growth outlook for the Germany's IT market this quarter as a result ofthe economic slowdown and heightened regional economic downside risk. However, we expect totalspending will continue to increase in each year of our forecast, with demand for IT services including cloudcomputing and big data forecast to outperform. Additionally, Germany continues to attract inwardinvestment from leading global IT market vendors, with the Internet of Things investment a leading trend in2014 and early 2015. Vendors are attracted to Germany by, an educated workforce and the presence ofseveral major IT companies in the market. There is however downside from IT market trends as well aseconomic headwinds. For instance, the issue of data security and privacy, which has implications for arange of IT products and solutions, continues to be a concern for German public and private sectordecision makers.
Headline Expenditure Projections
Computer Hardware Sales: EUR24.5bn in 2014 to EUR24.3bn in 2015, a decrease of 0.9%. Thedesktop and notebook markets have stabilised after decline 2012-2013, but a slowdown in tablet demandand price erosion across all categories will result in value contraction in 2015.
Software Sales: EUR8.5bn in 2014 to EUR8.8bn in 2015, an increase of 3.4%. Software spendinggrowth is forecast to decelerate from 2014 as operating system (OS) upgrade spending was broughtforward by the withdrawal of Microsoft support for the legacy XP OS in April 2014.
IT Services Sales: EUR18.4bn in 2014 to EUR19.5bn in 2015, an increase of 6.0%. Increased adoptionof outsourcing, cloud computing and big data services will ensure IT services outperformance over themedium term.
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