How Cybersecurity is Fuelling Global IT and Tech Spend
Cybersecurity and Gen AI are at the heart of a predicted 5% rise in IT spending by European business over the next 12 months, according to tech market research from executive advisory and research firm Forrester.
The company’s newly released Global Tech Forecast 2024-2029 predicts that total IT spend will reach US$4.9 trillion in 2025.
This will be spurred by enterprise and government investment in cybersecurity solutions, AI technology including a greater focus on Gen AI and cloud services adoption. These key trends will drive growth by 5.6%, compared to just 4.6% in 2024.
Forrester predicts that IT services and software will account for nearly two-thirds of global tech spending and, in Europe and North America, this share will be even higher.
Cybersecurity spend underpins growth
A greater drive for, and increased investment in, cybersecurity will underpin the rise in software spend, says Forrester.
In particular, this includes the updating and modernisation of legacy and outdated enterprise systems to better protect organisations in the rapidly evolving threat landscape.
Forrester forecasts that this software spending will reach 1.7% of global GDP by 2029, nearly doubling its worth since 2016.
Its analysts say that concentrating investment on cybersecurity and technologies like AI will give companies a competitive edge and help to fuel more sustainable growth.
Commenting on the research, Andy Ward, SVP and General Manager at Absolute Security says: “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 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."
Forrester also recognises the continued adoption of AI as a driver for tech spend.
In particular, it says, Gen AI will drive industry-specific growth in areas such as financial services, retail and media where the technology will be harnessed to enhance customer experience and operational efficiency.
The company explains that ‘this growth in Gen AI investments will subsequently force businesses to reposition their workforce, compete for tech talent and lower their technical debt’.
Michael O’Grady, Principal Forecast Analyst at Forrester, explains: “Over the next five years, technology investments will reshape industries at an unprecedented pace,
“Gen AI, cloud technologies and cybersecurity will take centre stage, transforming how businesses operate and deliver value.
“Companies that prioritise these investments will not only strengthen their competitive edge but also achieve sustainable growth, but it’s important that they also balance their rapid tech investments with ongoing efforts to manage legacy systems and reduce technical debt.”
Technology and security outlook: 2025
Forrester says that European tech spend will grow by 5% in 2025, exceeding $1.5 trillion for the first time in 2025.
Software and IT services will capture 78% of tech spend in Europe by 2029 – up from 68% in 2016 – as enterprises spend more on cloud, security, Gen AI and the digital economy.
More than 40% of European tech spend comes from financial services, media and information and professional and business services.
The company has also set out its forecast for the year ahead.
According to its Predictions 2025: Technology & Security, leaders should prioritise technologies and use cases that deliver true business value internally and externally. This is necessary, it explains, because ‘a tightening regulatory climate, ongoing geopolitical turmoil and waning customer trust will pose challenges’.
Organisations need to evolve to address emerging risk domains and technologies.
Forrester predicts that CISOs will deprioritise Gen AI use by 10% because of a lack of quantifiable value and practical outcomes. It adds that ‘challenges such as inadequate budgets and unrealised AI benefits reduce the number of security-focused Gen AI deployments’.
Other key predictions include a rise in private cloud networks in the enterprise as companies solve sovereignty, cost and data security challenges, a rise in the risk of exposure to fines under the EU AI Act and that breach-related spending will no longer be limited to regulatory fines and remediation costs.
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