Annual IT Spending by Western European Utilities to Surpass $11.7 Billion by 2015, Says IDC Energy Insights 

MILAN, August 15, 2011 – According to a new IT spending forecast report published by IDC Energy Insights, total yearend IT spending by Western European utilities is expected to be $9.1 billion in 2011.

The report, Western Europe, Utilities Industry, IT Spending, 2010–2015 Forecast (IDC Energy Insights #EI0S55T, August 2011), which includes market sizing and forecast estimates for the utilities industry in Western Europe for 2010–2015, shows that IT services currently make up 61.8% of total IT spending for utilities – the largest share, at over $5.6 billion in 2011. IT services are followed by packaged software and hardware, which account for 20.6% and 17.7% of IT spending respectively.

"By 2015, Western European utilities' IT spending will surpass $11.7 billion, with an estimated CAGR of 6.2% for 2010–2015," said Roberta Bigliani, head, EMEA, IDC Energy Insights. "While electricity's IT spending is already the most substantial in 2011, the subindustry is not expected to lower its spending any time soon. The water subindustry sector will have the slowest 2010–2015 growth rate, significantly below average at 4.8%, though this is to be expected as companies in the water subindustry are often smaller, making it more difficult for them to find financial resources to invest in IT. Overall, though, utilities' IT investments will continue to be driven by smart metering 2012 rollouts, operational excellence, cost reductions, and the need to comply with energy policies and regulation."

The report shows that:

Electricity companies take the most significant share of IT spending, at 66.8% ($6.1 billion).

The gas and water segments are considerably smaller, but still important, at 16% and 13.1% respectively.

IT spending on subtechnologies by utilities is distributed less evenly for IT services than for hardware, with the report finding that "maintenance and support" leads with 32.7% share; implementations and operations are second and third, with 26.5% and 24.8% respectively.

Electricity companies' IT spending is already the most substantial in 2011, and will continue to have the fastest-growing above-average CAGR between 2010 and 2015 (6.7%), reaching just under $8 billion by 2015.

By 2015, the gas sector will have expanded IT spending below average at 5.9% 2010–2015 CAGR, bringing it to $1.9 billion by 2015. Western European gas companies will be spending $1.8 billion in IT products and services by 2015.

The report, Western Europe, Utilities Industry, IT Spending, 2010–2015 Forecast (IDC Energy Insights #EI0S55T, August 2011), contains a downloadable pivot table, a detailed overview of the current status of the utilities sector in the top 5 Western European countries (France, Germany, Italy, Spain, and the U.K.), and an aggregate of the remaining Western European countries. The report provides an overview of utilities' business environment and IT spending behavior, priorities, and future outlook for utility providers in Western Europe for 2010 to 2015.

For more information or to arrange a one-on-one briefing with Roberta Bigliani, Gaia Gallotti, or Luiza Semernya, please contact Kanupriya atkanupriya@idc.com.

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