Irish IT spending to grow 3.5pc in 2008


21 Jan 2008

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Spending on IT by Irish-based organisations is predicted to grow marginally by 3.5pc in 2008 to €2.5bn.

Software sales in particular are set to grow by 6pc, with IT security software due to demonstrate the strongest growth in the sector.

Oisin Byrne of IT analysis firm iReach said that a general IT spending downturn, exasperated by global economic conditions and anticipated to occur internationally, will not be expected in Ireland.

“Each year we have seen an improvement in the alignment of IT with business drivers, where investment decisions are taken over a longer time line, taken at a more strategic level and have a more measurable impact on the overall business performance,” Byrne explained.

“This shift has had a significant impact on annual spend patterns on IT and telecoms since 1999. No longer do we see investment spikes or significant annual hits in IT or telecoms spend,” Byrne continued.

“Due to economic concerns, global IT research analysts such as IDC and Gartner are predicting a downturn, however we do not forsee a similar trend in Ireland in 2008.”

iReach predicts an overall market growth rate of 3.5pc in 2008, a marginal slowdown over 2007 levels with overall IT spend in Ireland reaching €2.5bn.

The key changes over 2007 are a slowdown in hardware growth and an increased spend across the Irish marketplace on business process outsourcing and continued strong growth in managed services.

In software, security continues to grow strongly with enterprise software spend growing for the first time in three years.

“The overall size of the Irish software marketplace will increase in 2008 for the first time in three years due to an increased focus on enterprise software and continued spend growth in software infrastructure and security software,” Byrne said.

“Investment in high-end enterprise software has been sluggish over the last three years as organisations looked to maximise return on investment from large-scale projects following significant investment in Y2K millennium IT replacement programs.”

This, Byrne says, has had a negative impact on the overall software spend figures for Ireland, even though security software has become a €100m business and infrastructure software spend in areas such as document management and business intelligence has displayed strong growth over the last few years.

Overall, the Irish software market will generate revenues of €440m, back to 2004 levels and up 6pc over 2007.

Security continues to be the fastest-growing segment again in 2008 as companies invest in more integrated and sophisticated solutions, growing by 12pc and reaching €100m in license sales, up from €90m in 2007.

Software infrastructure will hit €200m in 2008, up almost 10pc from 2007, driven by document and content management solutions, business intelligence and analytics, database, web servers and enterprise portals.

“After a number of sluggish years, enterprise software will see a positive investment growth in 2008 for the first time in three years as organisations revisit enterprise-wide solutions, especially in areas of supply chain, customer relationship management (CRM) and human resource (HR) management,” Byrne predicted.

By John Kennedy