The utilities industry in Central Europe is experiencing a positive 2010, dusting itself off after a truly testing year in 2009. According to a recent report by IDC Energy Insights, total IT spending by utilities in Central Europe (CE) is expected to reach $1.14 billion in 2010, up 2.6% from the previous year. In 2009, IT services accounted for 49.6% of total IT spending by utilities, representing the largest share. Hardware and packaged software made up 26.4% and 24.0% of IT spending, respectively.
According to the annual IDC Energy Insights survey, the business outlook among respondents remains healthy, with almost 70% reporting a positive outlook and 29% expressing a neutral outlook. In terms of IT spending in 2010, approximately 28% of respondents expect an increase in IT spending, while 47% expect expenditures to remain the same as in 2009.
The utilities sector continues to be under pressure from EU and state regulators. On the EU level, there is pressure to diversify generation portfolios to include more renewable resources, enable customers to choose a variety of rates, and achieve energy efficiency. On the level of individual countries, enforcement and reporting are being stepped up, especially relating to emissions.
IT investments by the utilities sector are mainly driven by migration to modern IT platforms and deployment of strategic applications to improve competitiveness and boost internal efficiency. "Utility sector IT expenditures will be chiefly affected by growing competition, higher customer expectations, more complex regulatory and political situations, and the convergence of the European energy market, all of which will significantly influence the environment in which CE utility companies operate," says Milan Kalal, senior research analyst, IDC Energy Insights.
IDC expects IT spending in the utilities sector in CE to grow on average by 5.5% annually to reach $1.45 billion in 2014.
IDC's Central Europe Utility Industry Insights and 2010-2014 IT Spending Forecast (Doc #EVE01S) study contains a detailed overview of the current status of the utilities sector in four Central European countries: the Czech Republic, Hungary, Poland, and Slovakia. The aim of this study is to detail the utilities business environment and the IT spending behaviors, priorities, and plans of utility providers in Central Europe for the 2010-2014 forecast period.
source: IDC
