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Economic recovery is expected to result in a slight acceleration in IT spending growth in 2015 to 4.2%.
However, we caution that enterprise confidence will remain susceptible to shifts in sentiment, with a re-escalation of the eurozone crisis or the security situation in Ukraine the most prominent potential flashpoints.
Under our core scenario higher levels of business and consumer confidence will see demand growth, while deferred purchases from the previous period of uncertainty, particularly in enterprise software and IT services, will add to momentum.
One area we expect to see a slowdown is in enterprise hardware demand, after sales were boosted in 2014 by the withdrawal of official support for the XP operating system.
Overall, the acceleration in growth will cement the Czech IT market’s status as a regional leader in Central and Eastern Europe, with a strong domestic skills base, investment by international firms, local entrepreneurship and high penetration of devices and solutions.
Headline Expenditure And Forecasts
Computer Hardware Sales: CZK28.0bn in 2014 to CZK33.2bn in 2014, an increase of 2.9% in local currency terms.
Stronger consumer demand will offset a slowdown in enterprise sales after the bump in demand in 2014 when the withdrawal of Microsoft support for XP boosted enterprise upgrades.
Software Sales: CZK16.9bn in 2014 to CZK17.8bn in 2014, an increase of 5.3% in local currency terms.
Demand for enterprise applications and cyber security software are growth areas, with SaaS adoption is showing strong growth.
IT Services Sales: CZK27.3bn in 2014 to CZK28.6bn in 2015, a local currency increase of 4.9%.
Several public sector contracts should support a higher growth rate than 2012-2014 when fiscal austerity and contract audit squeezed spending.
Key Trends And Developments
BMI has argued since early 2013 that over the medium term the hybrid notebook has significant potential in emerging markets due to the…