‘Tech spend in Americas, Europe may recover from 2024 Q3; U.S. slipping into recession is a ponderable’
Technology spending in both Americas and Europe is expected to grow stronger with signs tech providers may be nearing the bottom of the market, indicating recovery in tech and related services spending during the third quarter of calendar 2024, according to global technology analysts.
‘‘Overall, the global tech sector is bouncing back after recalibration post-pandemic,” said Hansa Iyengar, Senior Principal Analyst, Enterprise IT, at Omdia, a London-based tech-research company.
According to her, technology spending in the Americas and Europe is expected to recover, especially around cybersecurity, AI, data/analytics, data lakes, etc. In the U.S., the spending will be driven by healthcare, BFSI, and retail. In Europe, increasing regulations around privacy and sustainability will drive spending in related tech such as cybersecurity.
The industry has been decelerating for the last six quarters and reached a stage of contraction. ‘‘As we look at this year, we believe the rst two quarters of 2024 will continue to be dicult, however, we are seeing some signs that we may be near the bottom of the market and we could start to see a recovery in tech and tech services spending in the third quarter,’‘ said Peter Bendor-Samuel, Founder and Chief Executive Ocer of Dallasbased Everest Group.
However, he cautioned that if the U.S slipped into recession, then the markets would see a prolonged pullback in tech, services.
‘AI interest will wane’
AI holds attention currently, but interest in it will wane towards the end of the year as most organisations do not have the data foundations and practices needed to scale AI eectively, said Ms. Iyengar.
“So, the focus will shift back to basics – modernisation, data, and cybersecurity, with a keen focus on the cultural- and changemanagement aspects needed to scale up AI and other emerging technologies.”
However, HFS Research CEO and Chief Analyst Phil Fersht opined: “India’s IT services economy has a great opportunity with Generative AI but will blow it if they cannot change stuy ways of operating.”
He said Indian tech providers “just can’t seem to break out of a paralysed mindset” as they carried a lethargic approach towards GenAI.
‘‘There is a persistent expectation of the sector that global clients will consistently provide opportunities for Indian IT service rms, despite signicant changes in the economic landscape. This awed mindset may expose Indian services industry to newer challenges.”