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BMI View: Brexit increased the degree of uncertainty surrounding the Eurozone economic outlook, but
under our core scenario the direct impact on Germany's IT market should be relatively limited. We expect
technology trends will continue to determine market dynamics, for instance mature PC market means the
hardware outlook is subdued, while the next wave of enterprise demand for software and services
surrounding the Internet of Things and cloud computing through the 'Industrie 4.0' initiative offers much
brighter prospects. We forecast German IT spending will increase at a CAGR of 2.8% over 2016-2020 to a
total of EUR60.4bn in 2020.
Latest Updates And Industry Developments
? Computer Hardware Sales: EUR24.8bn in 2016 to EUR26.3bn in 2020, a compound annual growth
rate (CAGR) of 1.5%. Euro appreciation has upside potential for PC replacement spending over the
medium term by increasing affordability, particularly hybrid notebooks, but increasingly powerful
smartphones could cannibalise some of these sales.
? Software Sales: EUR9.0bn in 2016 to EUR10.3bn in 2020, a CAGR of 3.4%. Economic and political
risks present downside to enterprise outlook, but relocation of financial services activities from London to
Eurozone markets could offer some upside following Brexit.
? IT Services Sales: EUR20.2bn in 2016 to EUR23.7bn in 2020, a CAGR of 4.1%. Adoption of Internet of
Things and cloud solutions by German industrial and manufacturing firms bolsters an already strong
outlook due to cloud services demand and wider adoption of outsourcing, which should make IT services
the outperforming segment over the medium term.