Cyber security and AI fuelling growth in IT spending

Cyber security and artificial intelligence (AI) are set to fuel a 5 per cent rise in IT spending from European businesses during 2025, according to market analysis from Forrester.

Total IT spending is projected to reach $4.9 trillion in 2025, Forrester’s Global tech forecast 2024-2029 predicts, with GenAI, cyber security and cloud services to drive growth by 5.6 per cent, compared to just 4.6 per cent in 2024.

Forrester’s research predicts that IT services and software will account for two-thirds of global technology spending this year, driven by increased investment in cyber security and the modernisation of legacy systems to better protect against the evolving cyber threat landscape.

Analysts from Forrester believe that concentrating investment on cyber security and AI will provide businesses with a competitive edge and help them achieve sustainable growth.

Andy Ward, SVP Absolute Security commented: "It’s encouraging to see businesses investing more in cybersecurity, as strong defences are essential in today’s evolving threat landscape. However, to truly protect against risks, organisations must go beyond just new tools—they need a to put a robust cyber resilience strategy in place. This means investing in prevention and recovery solutions, having clear incident response plans, and ensuring IT teams have real-time visibility across all devices to detect and stop threats early."

Software is set to grow at a rate of 10.5 per cent, expected to represent 60 per cent of global technology spending in 2029.

IT consulting and system integration services, accounting for just under one-fifth (19 per cent) of global spending, are also predicted to be among high-growth areas of tech.

Michael O’Grady, principal forecast analyst at Forrester, said: “Over the next five years, technology investments will reshape industries at an unprecedented pace.”

However, O’Grady notes pitfalls in managing legacy systems and reducing legacy systems.

“Legacy systems still capture two-thirds of global tech spending,” said O’Grady. “With the half-life of tech skills at less than five years, skills renewal of the tech workforce is vital.”

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