European Security Spending to Grow 10.6 Percent in 2023

Growing security needs, new regulations, and the increasing risk of ransomware attacks due to the current geopolitical situation continue to drive European security spending, according to IDC. Total European spending is projected to grow by 10.6% in 2023.

Spending in the region will continue to see almost double-digit growth over the forecast period, with total spending reaching $71 billion in 2026. The U.K., Germany, and France are the top spenders on security, together accounting for over half of the European security market. In Central and Eastern Europe, the Czech Republic will have the fastest growth in 2023, at over 12% YoY.

"IDC research shows that ongoing disruptions and a dynamic threat landscape have led European organizations to rethink their cyber resilience and proactively ensure their organization maintains good cyber hygiene," said Romain Fouchereau, research manager, IDC European Security. "Adopting zero-trust principles to harden security measures and implement secure access controls across networks, applications, and devices has become a top priority, with a defined strategy and support from senior management for new investments and initiatives.

European spending on software will lead YoY growth in 2023, with approximately 11% growth. However, security services will see the largest spending in 2023, reflecting its key role for European organizations across industries. "We're seeing that in addition to software and hardware, European companies also have a very real need for security services to guarantee their continued operations and regulatory adherence," said Vladimir Zivadinovic, senior research analyst, IDC European Data and Analytics. "This is especially true for organizations with limited competencies in security, especially SMBs in less digitally mature verticals such as media, manufacturing, and healthcare.

In 2023, the finance sector will have the highest spending in Europe, driven by the need for data protection and regulatory compliance. At the same time, market dynamics are pushing financial institutions to increase their responsiveness and agility. Security services will be pivotal to unlocking the full potential of their internal IT teams to focus on new services and improved customer experience.

Finance will be closely followed by manufacturing, with the government sector having the third-largest spending in 2023. Manufacturing will continue to focus on protecting its industrial assets, which will be increasingly connected with the enterprise IT network. The government sector will continue to invest in data protection and in executing its digital transformation initiatives, which are being targeted by ever more sophisticated ransomware attacks.