Six nations: IT on the up in central, eastern Europe

The IT markets in central and eastern Europe are growing at breakneck speeds, providing opportunities aplenty for vendors.

Political stability, healthy GDP, rising demand from small businesses and greater availability of cheap PCs are all factors causing the rise of IT spending in six nations: Croatia, the Czech Republic, Hungary, Poland, Russia and Slovakia, according to IDC.

The analyst predicts the region's IT market will hit $40.5bn by 2009, nearly doubling from 2004.

Government is the vertical investing the most in IT, followed by the home market. Banking is also growing quickly and should be third by the end of 2006, says IDC.

Healthcare and education also deserve attention, according to Steven Frantzen, group VP of IDC CEMA and general manager for research at IDC EMEA. "[T]he rise in IT investments reflects the overall economic health of the region and vendors would do well to allocate some of their sales and marketing teams to these sectors," he said in a statement.

Low prices and wide availability in retail stores are making PCs the fastest rising segment, followed by IT services and software, which enterprises are investing in to make the most of their existing IT hardware.

Russia is the leading country with 45 per cent of IT revenues for the region - and IDC believes by the end of the year that figure will be more than half. It has particular strength in government and communications.

Poland, the second largest market, stands out for having the most aggressive incentives for IT development. It is followed by the Czech Republic, Hungary, Slovakia and Croatia.

IDC's Frantzen said: "In the recent past, a lot of the CEE IT markets were growing fast because they were starting from small bases. Now they are growing fast because the strong economies and increased international businesses in the area are ramping up IT to compete on the regional and international stage. It's a good time to be in the market."