Government tech spending boost ahead

Government spending on technology will continue to grow for at least the next four years, with local authority spending outpacing that of central government.

Western European governments will invest $49bn in IT in 2009, compared to $38bn last year, predicts analyst IDC.

Government IT spending will grow at an average 5.3 per cent until 2009, compared with 4.5 per cent growth for the wider IT market.

The growth rate will continue to stay above the IT market average, with local authorities seeing the strongest growth, according to IDC.

Spending by local authorities will grow from $18.7bn last year to $24.8bn in 2009, an annual growth rate of 5.8 per cent, whereas central government spending will grow 4.8 per cent, IDC said.

Massimiliano Claps, IDC European vertical markets programme manager, said: "IT vendors that want to sell their products and services in the government sector must provide solutions that match the requirements of that long-term transformation."

The analyst firm said public sector buyers will be looking for packages of technologies that will help them communicate better with the public - such as portals and call centres bundled with services to help them handle cases on a customised basis.

It said customer relationship management systems with case management, document and record management tools will make sure there is an efficient flow of work between front and back end.

Other areas where governments will be looking to spend money is back-office re-engineering packages offering traditional accounting, payroll, and HR services with business intelligence and analytical tools necessary to review performance.

IDC also said spending in the western European retail and wholesale sector is expected to reach $39.6bn by 2009.

The analyst said software continues to be the fastest-growing area of spending by retailers, followed by IT services. IT services will remain the major driver for IT spending, accounting for almost 50 per cent of overall spending. Hardware is growing in 2005 thanks to a strong performance in the networking area.