Companies are becoming increasingly interested in IT outsourcing services, particularly the likes of managed hosting and security providers, an expert has said.

This year, spending on external services in western Europe is expected to reach $204 billion (Ј136 billion), according to a forecast from the International Data Corporation (IDC).

Douglas Hayward, research manager for European services at the IDC, said spending confidence is rising in firms across Europe, especially in terms of outsourcing and cloud computing.

“With IT services spend dependent in part on enterprise and consumer confidence, and of course on levels of cash flow in enterprises and government bodies, we see a short-term period of relative stability where things don’t get much better but neither do they get much worse,” he said.

Recently, Michael Dean, head of marketing at the National Computer Centre, said firms will increase their spending on virtualisation this year partly due to the cost reductions it can afford.