Close

By Thomas Varan, Global Sales Director

European businesses are facing a new wave of price increases on the IT front, and the pressure on budgets will only increase in the coming years.

From software licenses to cloud solutions and cybersecurity, European CIOs are facing a time when IT spending is an increasing proportion of total company costs. With future geopolitical changes, such as the recent US election victory of Donald Trump, businesses are forced to look for new, cost-effective solutions.

Price adjustments at the giants: Microsoft and Google lead the way

A clear example is Microsoft, who in 2023 announced price increases of up to 11% on their cloud and software services for a number of European markets. The explanations for the price increases were expressed as a way to adjust prices to reflect the dollar exchange rate and ensure global consistency.

Google has also raised the price of its services, and most recently YouTube Premium subscriptions were increased by 44% in Denmark.

Both examples indicate that businesses can no longer expect stability in their IT costs and must be prepared to deal with ongoing price adjustments from the big players in the market.

Rising dollar and newly elected US president create further uncertainty

With Trump’s return to the White House, the financial markets have already reacted: the futures market has pointed to a rise in the dollar and economists expect the price of US goods and services – which e.g. Denmark largely imports – to rise. This will make US IT services, which many Danish companies use, even more expensive, which could put further pressure on IT budgets. At the same time, there is speculation about new tariffs on goods from the EU and China, and retaliation could create even more financial pressure for Danish companies that rely on US technology products.

Inflation: A wild card in the equation

The future development of inflation also plays a crucial role. The IMF and other economic institutions suggest that global inflation may continue to rise due to persistent supply chain issues, rising labor costs in major economies and – not least – expectations of tariffs. These pressures are likely to be reflected in technology prices.
In other words, price increases for IT services are likely to continue over the next few years, making it essential for European companies to review their budget strategy.

Several Danish companies have already looked towards lower cost countries, such as Poland, Portugal and Ukraine, where IT skills are strong and wages are lower. By placing part of their development and IT tasks in these countries, companies can not only reduce their average costs, but also ensure greater flexibility in future budgets.
This approach creates a geographical spread in costs, making companies more resilient to fluctuations and increases in the domestic market.

Teamwork giver innovative løsninger.

A call for due diligence

For CIOs, now is the time to act and think long-term across their geographical cost structure. 2025 is upon us and with current market trends, it’s more relevant than ever to prepare for how IT spending can be managed more effectively.
Most CIOs will probably be asked to revisit the budget assumptions for 2025 and come up with suggestions for savings.
Nearshoring and flexible allocation of IT resources could be the way forward to ensure European businesses are better equipped for a challenging economic future.

Want to talk digital development for your business?

conscensia-thomas

Contact Thomas today

Call on +45 3190 2803, fill out the form, or book a 30-minute online meeting directly in his calendar here.

More from Conscensia

Close
  • Nordvestvej 31
  • 9000 Aalborg, Denmark
  • CVR.: 26459400
Send us an e-mail

Contact us