Italy ICT Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

Italy's ICT Market is expected to grow at a CAGR of 7.5% over the next five years. Increasing emphasis on digital technology and advanced technology, such as cyber security, artificial intelligence, and robotics, drives the market's growth. The ICT market across the Country is overgrowing due to strong spending on hardware and software services by Itlay companies.

Key Highlights

• The ICT sector includes both the IT and Telecom markets. IT investments are growing, and the ICT market demand is expected to grow significantly over the next five years. For instance, TIM Group (Telecom Italia S.p.a.) collaborated with Cisco to deliver cloud services for private enterprises and government agencies. The increasing need to explore and adopt Cloud technology investments significantly boosts Italy's ICT market growth.
• The government took initiatives to develop the ICT industry, which would drive new growth opportunities for the ICT market. For instance, Italy's National Plan for Recovery and Resilience should provide a positive boost, impacting the ICT market in 2021-2024. Italy is among the leading contributors to the digital market. In the three years of 2022-2024, the main technological drivers will continue to be cloud computing, big data, artificial intelligence (AI), the Internet of Things (IoT), and cybersecurity.
• Although information and communication technology (ICT) is everywhere, it plays a significant role in the Country's economic development. For instance, Google is contributing technological developments to Italy's economic recovery. Google invested more than USD 900 million over five years to help transform Italian businesses, large and small, including launching two Google Cloud regions in partnership with TIM (Telecom Italia). Such initiatives from the Key market players would bring new growth opportunities for the Italy ICT market.
• The ICT industry significantly impacts Italy's GDP (Gross domestic product). According to the IMF (International Monetary Fund), Italy's GDP is expected to grow by USD 2289.81 billion by 2027. The county's GDP is growing significantly with increasing IT investments that would create new growth opportunities for the Italy ICT market.
• Due to the COVID-19 pandemic, a large portion of the Italy population was forced to stay at home constantly, and many opted to work from home due to increased broadband consumption. Post COVID-19 scenario created an unexpectedly high demand for secure cloud services. For Instance, Oracle opened its first cloud region in the Nordics in Stockholm, along with one in Milan, Italy. The COVID-19 pandemic increased demand for the adoption of cloud computing tools from private and public organizations. Further COVID-19 pandemic is creating new growth opportunities for the Italy ICT market.

Key Market Trends

Growing demand for Cloud Technology

• Italy's ICT industry is driven by the significant increase in private and government investment, rising consumer spending, and increasing demand for cloud services would create new growth opportunities for the market growth. For Instance, Microsoft Corporation announced a USD 1.5 billion five-year investment plan in Italy, indicating a strong commitment to supporting local innovation and development, including the intention to bring Microsoft's first data center region to the country.
• Cloud computing includes several advantages for the BFSI (Banking, Financial Services, and Insurance), such as increased security, faster processing speeds, and lower costs. For instance, BPER Banca Group, Italy's third biggest banking group, signed a four-year agreement with IBM to accelerate the bank's transformation into a fully digital enterprise. The four-year deal will expand the bank's hybrid cloud strategy to modernize its technology infrastructure and applications by combining the security, scalability, and reliability of IBM Cloud for Financial Services to help meet the compliance requirements of the heavily regulated industry with the resiliency of IBM z16 and Red Hat OpenShift, a leading Kubernetes platform.
• For instance, VMware Cloud on AWS is available in the AWS Europe (Milan) region. It brings the total number of VMware Cloud on AWS available regions in Europe to six. Customers in Italy may use VMware Cloud on AWS to obtain a hybrid cloud solution that supports workloads in Italy. The increasing cloud infrastructure development would create new growth opportunities for the Italy ICT market.
• Furthermore, the increasing investments by the government in promoting the development of numerous technologies, such as 5G, AI, IoT, machine learning, Big Data, etc. Additionally, the emergence of digital transformation is expected to drive Italy's ICT market growth. For instance, Capgemini Invent includes its footprint in Europe by launching its complete offerings in Italy. The company provides its comprehensive portfolio of services in Italy, including intelligent industry strategy and enterprise transformation services.
• The growing population in the region and the increasing need for adopting advanced technologies such as Cloud, IoT, artificial intelligence, and digital transformation are boosting the market's growth. According to the IMF (International Monetary Fund), Italy's GDP will be USD 2289.81 billion by 2027. It indicates that the GDP is growing, and the growth of the Italy ICT market is expected to grow over the next five years.

The IT and Telecom Sector is Expected to Drive the Market

• The increasing IT and Telecom infrastructure investments are driving the ICT market growth. For instance, Aruba, an Italian cloud and hosting company, announced that its Hyper Cloud Data Center (IT4), presently under construction in Rome, will be finished in the first quarter of 2023. The campus is set to be the largest data center in Italy. Such infrastructure initiatives would bring new growth opportunities for the Italy ICT market.
• Cyberattacks are expected to continue to grow over the next five years. Advancements in IT operations will prevent the ICT market from cyberattacks. For instance, an Italian company Google developed hacking tools to spy on Apple Inc and Android smartphones in Italy and Kazakhstan. According to a Google report, its website lists European law enforcement agencies as customers, creating tools to spy on the targeted devices' private communications and contacts.
• The transition to 5G is still rising in the country due to expanding new networks and increasing demand for high-speed connectivity services. For Instance, Telecom Italia (TIM) won a government tender to implement 5G networks worth USD 817.54 million. Such government investments would bring new growth opportunities for the Key players in the ICT market.
• The telecom industry's growth is mainly due to the growing population with the increasing adoption of broadband services in the country. According to the Ookla Speedtest Global Index, Italy ranked 65th with a median fixed broadband download speed of 60.38 Mbps in December last year. Fixed broadband services penetration is growing significantly and thus increasing the demand for the telecom services sector.

Competitive Landscape

The Italy ICT Market is moderately competitive and moving toward the fragmented stage as the market currently consists of various significant players. Several key players in the ICT market are in constant efforts to bring advancements. Some key players in the market are IBM Corporation, Oracle, Microsoft Corporation, Cisco Systems, and Google LLC. Some of the current growth in the market are:

June 2022- TIM Group (Telecom Italia S.p.a.) and its cloud company Noovle, as well as Salesforce, a world leader in CRM (Customer Relationship Management) solutions, have signed a collaboration agreement to support the digital transformation processes of companies and public administrations to make them more efficient and competitive.

June 2022- Amazon continues to invest in talent in Italy, creating 3,000 new permanent jobs by the end of 2022. Amazon became a significant job creator in Italy, offering a wide range of sound, stable, and well-rewarded opportunities in the company across the country.

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