European CIOs Should Remain Cautious in 2014 Tech Spending Plans: Forrester

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Most European countries will see tech market growth in the one to two percent range in 2014, with the market in France in particular barely growing at all, according to the annual European Tech Market Outlook by Forrester.

Released on Thursday, the report looks at CIO budgets in Europe as economies emerge from the recession. Forrester projects modest growth of 2.3 percent in 2014 for European businesses and government purchases of technology goods and services, with growth of 4.9 percent in 2015.

Though Forrester expects growth to “solidify in 2015” it encourages CIOS to remain “cautious in their 2014 tech spending plans and be prepared to reverse course if necessary.”

According to the report, spending on technology that supports customer facing processes like sales or marketing will see the strongest growth. Customer relationship management, marketing automation, mobile applications, ecommerce solutions and web content management are expected to grow over 10 percent in 2014.

A recent report by the Cloud Industry Forum found that CRM is one of the most popular cloud services in the UK.

The UK, Sweden, Belgium, the Netherlands and Luxembourg are the European countries that will see the strongest growth.

“The problem is that the Eurozone countries, while at least pulling out of recessions, are still experiencing feeble economic growth,” Andrew Bartels, VP, Principal Analyst serving CIOS at Forrester said. “That will leave European CIOs being very cautious and conservative in their tech purchases in 2014.  Not until 2015, when we assume that economic growth will start to solidify, will European tech markets return to healthier rates of expansion and growth.”

Software will also see moderate growth at four percent, with spending on applications outpacing spending on middleware, according to the report. Spending on communications equipment, IT outsourcing and telecommunications will be fairly low, growing at around one and two percent.

While the report looks at spending from the CIO’s perspective, not all tech spending is happening under the CIO. A recent report from CA Technologies found that 35 percent of IT spending is happening outside of IT departments.

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