Europe lags behind enterprise software spending recovery

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Europe lags behind enterprise software spending recovery

Simon Quicke

The worldwide software market is recovering from the recession with signs that the next four years will be ones of modest growth but things remain downbeat in Europe.

Having seen the market decline by 2.6% last year Gartner is predicting a 4.5% increase this year with global software revenue to reach $232bn by the end of the year.

That recovery is expected to continue through to 2014 with revenue growing at an annual compound growth rate of 6% up to 2014.

"After declining 2.6% in 2009, the worldwide market for enterprise software is recovering well with signs of continuing growth on the horizon," said Joanne Correia, managing vice president at Gartner.

But the bounce back is not the same everywhere and Western Europe will not be able to match the speed of growth likely to be enjoyed in the Asia Pacific region.

Europe will see a fall in enterprise software spending this year, a 3/4% decline across EMEA compared to last year, although the market is expected to climb out of the downturn and produce healthy revenue increases by 2014.

"The story in Western Europe at the moment is the duality of the situation with Germany leading the rebound, France following behind, and the UK and the Nordic countries showing promising prospects, while Ireland, Spain, Portugal and Greece are still struggling with weak performances," said Fabrizio Biscotti, research director in Gartner Europe.

He raised a major concern that the speed of recovery would have an impact on different territories in Europe.

"This is leading to a 'polarisation' of performances in the software market, with the countries that are leading the recovery being more proactive on the software purchase front while those that are still languishing in recession are missing out on the more innovative software investments. By 2011 this could lead to an even larger gap between the size and growth rates of the software markets in these of countries."

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