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ICT Investment Trends in Germany: Maintaining data privacy and security is driving ICT investments

ICT Investment Trends in Germany: Maintaining data privacy and security is driving ICT investments

Summary

German economy continued on its growth path, with the government delivering a budget surplus in 2016, primarily driven by the country’s strong labor market, low unemployment rate, and higher tax revenues creating a positive growth environment for German enterprises. Furthermore, Germany’s Federal Ministry for Economic Affairs and Energy launched its digital initiatives such as ‘Mittelstand- Digital’ in March 2016, to assist small and medium-sized enterprises (SMEs) with the digitalization of technologies such as communications, cloud computing, and business process management in order to gain competitive advantage.

Germany's economy is growing firmly in 2017, and had a huge trade surplus in 2016, with high exports in vehicles, machinery, pharmaceuticals, and electrical equipment, which are pushing investments in the ICT sector. Additionally, application services constituted the largest proportion of the total IT services budget, while network services attracted the largest proportion of the total telecommunications budget among German enterprises.

In order to comply with regulations to keep enterprise data within the geographic borders of Germany, enterprises allocated the highest share of their total ICT budget to the data centre function. Moreover, the survey shows that a major proportion of German enterprises are not willing to outsource their IT function, as the German market advocates tighter data privacy regulations.

The report ICT Investment Trends in Germany illustrates the core technologies that enterprises are investing in, including enterprise applications, IoT, cloud computing, and business intelligence. The survey also highlights the approach to purchasing technology adopted by enterprises in Germany.

In particular, it provides an in-depth analysis of the following -

  • How ICT budgets are set to change in 2017 in terms of their overall size.
  • Allocation across the core elements of IT spend, including hardware, software, services, communications, and consulting.
  • Distribution of ICT money in areas such as the networks, applications, service desk, and data centers.
  • Which ICT functions German enterprises are interested in outsourcing?
  • German enterprises’ investment priorities based on their budget allocations across core technology categories such as enterprise applications, IoT, cloud computing, and business intelligence.
  • Factors that are influencing German enterprises’ investments in each technology category.
  • How German enterprises’ IT budgets are currently allocated across various segments within a technology category.
  • German enterprises’ distribution of their ICT budget across various segments within a technology category.
  • Vendor satisfaction ratings for various core and advanced technology categories.
  • Insight into German enterprises’ preferred buying approaches.
  • Business objectives that German enterprises are looking to achieve through their IT investment strategies.
  • Factors that are influencing German enterprises’ decisions to select an ICT provider.
Companies mentioned in this report: Adobe, IBM, Microsoft, SAP, ADP, Google, Cisco, Red Hat, Amazon Web Services, Oracle, Software AG, HPE, EMC.

Scope
  • GlobalData’s survey shows that German enterprises are looking to increase their total ICT budget in 2017, indicating that enterprises are moving towards technology driven work environments to boost productivity.
  • As the German government is focussing on helping small and medium-sized enterprises (SMEs) to digitally transform their businesses under its ‘Digital Strategy 2025’ plan, local software vendors and network providers are expected to attract greater opportunities in the SME market.
  • Increasing customer satisfaction tops the list of business objectives, followed by the need to gain a competitive advantage, in influencing IT investment strategies among German enterprises.
Reasons to buy
  • Understand how the German enterprise ICT landscape is set to change in 2017 to prioritize your target market
  • Comprehend how ICT money are being allocated by German enterprises in specific verticals and size bands to improve your market penetration
  • Make effective business decisions by recognizing the opportunities within each of the core areas of ICT spend (hardware, software, IT services, telecommunications, and consulting)
  • Realign your sales initiatives by understanding the current strategic objectives of German enterprises
  • Enhance your market segmentation with the included, detailed breakdown of opportunities within selected technology categories (enterprise applications, IoT, cloud computing, and business intelligence)
  • Prioritize your focus areas by understanding which factors are influencing German enterprises’ decisions when selecting an ICT provider
  • Understand the changes in customers’ priorities and identify the business objectives that German enterprises are looking to achieve through their ICT investment strategies


  • Key findings
  • Key implications for ICT vendors
  • German enterprises are investing in various ICT domains in order to introduce pioneering digital services in the future
  • Survey demographics
  • German enterprises are keen to increase investments in various ICT domains in 2017
  • Investment in hardware remains a key area of focus among German enterprises in 2017
  • Expenditure on security and network and communications equipment constitutes a major portion of hardware expenditure
  • Software licenses constitute the largest share of software budget allocations among German enterprises
  • Application services dominates third-party IT services expenditure among German enterprises
  • Network services dominates the telecommunications budget of German enterprises
  • German enterprises are investing a major portion of their cloud computing budget in SaaS
  • With the tightening of privacy and security laws in the country, German enterprises are investing in private cloud infrastructure
  • The need for business continuity and security is driving investments in data centers among German enterprises
  • A major proportion of German enterprises are willing to manage their IT functions in-house to maintain data privacy
  • German enterprises are prioritizing investments in financials
  • Adobe is the most popular enterprise applications provider among German enterprises
  • German enterprises are focusing their investments on security and network sensors
  • Google is the most popular IoT vendor, while Cisco receives the highest average rating among German enterprises
  • IaaS is set to become the most popular cloud computing solution among German enterprises in the next two years
  • Microsoft is the most popular cloud computing vendor among German enterprises
  • Real-time business intelligence technology is set to gain the highest traction among German enterprises
  • IBM leads the list of BI solution providers among German enterprises
  • Increasing customer satisfaction is the most important factor influencing IT investments among German enterprises
  • Financial stability, leading-edge technology, and solution design are important criteria in choosing an ICT provider among German enterprises
  • Purchase decisions for voice/video/collaboration products among German enterprises is taken primarily by individual business units along with IT guidance
  • Appendix

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