'Good Enough Computing' Culture Contributes to Buyer Caution in Europe, According to a New IDC Survey

As many firms in Europe keep major IT projects on hold, a new survey from IDC shows that the single greatest inhibitor of IT spending increases is the growing culture of "good-enough computing." More than 60% of large firms, and over half of SMB companies, identified the issue of "good-enough computing" as a major barrier to funding for new IT projects, and ranked it ahead of the weak economy, company profits, or the cost and complexity of IT as a major inhibitor. Almost 40% of large firms, meanwhile, also identified the shortage of skilled staff to implement new technology solutions as a major barrier.

"The issue of 'good-enough computing' is one which was much discussed in the United States during 2003," said Stephen Minton, vice president of Worldwide IT Markets at IDC. "Business leaders start to get the idea that their existing technology infrastructure is good enough to support business needs and new applications, and that increased investment in new technology is often unnecessary. Business managers in Europe are exerting considerable influence over the IT buying process, and with an eye on retaining as much existing infrastructure as possible."

The survey also illustrated that large firms are heavily focused on IT security in their technology planning for the second quarter, while there is still less awareness of security-related issues among SMBs. Companies in Germany and the U.K. are investing gradually in new PCs, servers, storage, and network equipment, while respondents in France were the least optimistic with regard to IT spending in the second quarter. Meanwhile, Italian firms indicated a relatively strong focus on wireless network equipment in the second quarter. Software projects remain tepid and modular, with a majority of firms in Europe indicating no plans for major new application projects in the second quarter. Where investment is occurring, firms are focusing on Web services, email archiving, mobile computing, and content management, in addition to IT security.

"The survey results support our forecast for positive but lukewarm growth in the European IT market this year," said Minton. "In euro terms, the IT market will struggle to exceed 4% growth compared to 2004. This outlook could be disrupted, however, by wild cards relating to foreign exchange rates over the remainder of this year; specifically the value of the euro against the dollar."

IDC's new European IT Market Watch Survey (Doc #A54M, April 2005) is available on www.idc.com. For more details contact Stephen Minton or Marcel Warmerdam, sminton@idc.com or mwarmerdam@idc.com.