The report, "Western Europe, Utilities Industry, IT Spending, 2010-2015 Forecast" (IDC Energy Insights # EI0S55T, August 2011), which includes market size and forecast estimates for the Western European utilities sector for the period 2010-2015, shows that IT services currently constitute 61.8% of total IT spending for utilities—the largest share, more than $5.6 billion, in 2011.
IT services are followed by software and hardware packages, which account for 20.6% and 17.7% of IT spending, respectively.
"By 2015, Western European utilities spending will exceed $11.7 billion, with an estimated CAGR of
6.2% for the period 2010-2015," comments Roberta Bigliani, Head of EMEA, IDC Energy Insights. "While electricity spending on IT is already the largest in 2011, the water sub-industry is not expected to reduce its spending in the short term. The water sub-industry will have the slowest growth rate from 2010 to 2015, significantly below the average at 4.8%, although this is expected because companies in the water sub-industry are often smaller, making it more difficult for them to find the financial resources to invest in IT. Overall, IT investments will continue to be driven by smart metering deployments through 2012 for operational excellence, cost reduction, and the need to comply with energy policies and regulations."
The report shows that:
• Electricity companies constitute the most significant component 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 sub-technologies by utilities is less evenly distributed for IT services than for hardware, with the report concluding that "maintenance and support" leads with a 32.7% share, and implementations and operations are second and third, at 26.5% and 24.8% respectively.
• Electricity companies' IT spending was already the largest in 2011 and will continue to experience the highest above-average CAGR growth between 2010 and 2015 (6.7%), reaching just under $8 billion in 2015.
• By 2015, the gas sector will have expanded its IT spending below the average at a 5.9% CAGR from 2010 to 2015, reaching $1.9 billion in 2015. Western European gas companies will spend $1.8 billion on IT products and services by 2015.
The report includes a downloadable pivot table, a detailed overview of the current state of the utilities sector in the top five Western European countries (France, Germany, Italy, Spain, and the UK), and an aggregate for the remaining Western European countries. The report provides an overview of the business environment in utility companies and IT spending behavior, priorities and future prospects for utility providers in Western Europe from 2010 to 2015.
