Europe Digital Transformation Market by Technology (IoT, Cloud Computing, Big Data Analytics, AI/ML, Cybersecurity, Mobility Solutions, AR/VR, RPA), Offerings, Enterprise Size, Deployment Mode, End-use Industry, and Geography - Forecast to 2030

The Europe Digital Transformation Market to reach $832.84 billion by 2030, at a CAGR of 18.5% from 2024 to 2030. The growth of this market is attributed to the increasing investments in sustainability initiatives in various industries, a stronger focus on resilient supply chains by leveraging analytics, growth of flexible work culture, remote talent management, and continued focus on cybersecurity. In addition, long-term investments in Europe to boost digital technologies, data-driven, analytics-based customer experience approach, and increasing adoption of blockchain as a mainstream technology are expected to offer significant opportunities for the growth of this market.

However, the lack of harmonized digitalization in SMEs across Europe hampers the growth of this market. In addition, the lack of tailored support for SMEs in different industries to support their digital transformation initiatives is a major challenge to the growth of this market.

Long-term Investments in Europe to Boost Digital Technologies Driving the Market Growth of Europe's Digital Transformation During the Forecast Period

The EU’s multiannual financial framework will boost the adoption of digital technologies in Europe. The major EU budget programs that will support the market growth are:

1. Digital Europe Program:

The DIGITAL (Digital Europe Programme) is the central initiative within the Multiannual Financial Framework (MFF) dedicated to digital innovation. Its primary objective is to expedite economic recovery and propel the digital transformation of Europe.

The DIGITAL programme is poised to bolster investments in several key areas, encompassing supercomputing and data processing capabilities, fundamental artificial intelligence (AI) resources like data repositories and libraries of AI algorithms, cybersecurity, digital skills enhancement, the optimization of digital potential across European society and the economy, and support for the digitalization of both businesses and public administrations.

This programme is strategically crafted to bridge the divide between digital technology research and its practical application. It aims to usher research outcomes into the market, benefiting European citizens and businesses, particularly small and medium-sized enterprises (SMEs). The total allocation for the Digital Europe Programme is €7.6 billion.

        2. Horizon Europe

Horizon Europe is a seven-year funding initiative for research and innovation, building upon the accomplishments of Horizon 2020. This program is designed to finance critical research endeavors in areas like healthcare, resilience, and green and digital transformations. A specific allocation within Horizon Europe is earmarked for 'Digital, Industry, and Space.' This budget is intended to advance research and cutting-edge innovations in enabling technologies, including artificial intelligence, robotics, next-generation Internet, high-performance computing, big data, key digital technologies, and 6G.

Furthermore, it will support research endeavors that explore the synergy between digital technologies and other domains. In total, it is estimated that approximately 35% of Horizon Europe's resources will be directed toward initiatives related to digital transformation. The objectives of Horizon Europe will complement those of the Digital Europe Programme. The total funding allocated to Horizon Europe is €95.5 billion.

       3. Recovery and Resilience Facility

Promoting digital transformation is essential for fortifying resilience and propelling recovery efforts. The Recovery and Resilience Facility represents a novel program designed to provide financial backing for investments and reforms, with a specific focus on facilitating the green and digital transitions and enhancing the economic resilience of member states. This initiative will be closely aligned with the European Semester framework.

The Commission has put forth a proposition that mandates each recovery and resilience plan to allocate at least 20% of its expenditure towards digital initiatives. The total allocation for the Recovery and Resilience Facility is €672.5 billion.

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Key Findings in the Europe Digital Transformation Market Study:

The Cloud Computing Segment to Account for the Largest Share of the Europe Digital Transformation Market

Based on technology, in 2024, the European digital transformation market is expected to be predominantly dominated by the cloud computing sector. This significant share is credited to the growing adoption of Software-as-a-Service (SaaS) solutions, the ease of onboarding cloud computing services, efficient storage of extensive data volumes, the availability of flexible storage solutions tailored to a company's needs, and the cost-effectiveness of cloud services, among other factors.

The Software Segment to Account for the Largest Share of the Europe Digital Transformation Market

Based on offerings, in 2024, the software segment is expected to account for the largest share of the Europe digital transformation market. The large market share of this segment is attributed to the growing demand for automation in business processes, the growing adoption of technologies such as AI/ML, and the increasing demand for automation in every industry sector is driving the growth of this segment.

Large Enterprise Size Segment is Expected to Grow at the Fastest CAGR During the Forecast Period

Based on enterprise size, the large enterprise segment is expected to grow at the highest CAGR during the forecast period. The high growth of this segment is ascribed to the ability of large enterprises to commit resources to digital transformation technologies and swiftly enhance their digital capabilities to align with their business requirements. In addition, these major enterprises are directing substantial investments towards sustainable solutions in line with the net-zero carbon emissions objectives set by government bodies and organizations. Digital transformation technologies play a pivotal role in driving these sustainability initiatives, which is why the prominence of large enterprises is expected to persist as the most substantial throughout the projected period.

The Media & Entertainment Segment to Dominate the Europe Digital Transformation Market in 2024

Based on end use, the Europe digital transformation market is segmented into retail, government & public sector, healthcare, supply chain & logistics, utilities, manufacturing, BFSI, IT & telecom, media & entertainment, transportation, and other end-use industries. In 2024, the media and entertainment sector is poised to command the largest share of the European digital transformation market. This large share is attributed to the extensive integration of diverse digital technologies, such as AI, big data analytics, AR/VR, and more, within the media and entertainment industry. Among these technologies, big data analytics boasts the highest adoption rate in the sports domain. AR/VR innovations are spearheading a revolution in the gaming industry, providing immersive gaming experiences. AI has emerged as a prominent technology embraced by OTT platforms and music streaming services to deliver personalized content tailored to individual preferences. Machine learning and big data technologies play a pivotal role in comprehending individuals' interests and inclinations gleaned from their social media interactions, thereby enabling precise and tailored product and service advertisements that are most likely to resonate with their preferences.

Germany to Dominate the Europe Digital Transformation Market

Based on geography, the Europe digital transformation market is segmented into Germany, the U.K., France, Italy, Spain, Poland, Netherlands, Sweden, Switzerland, Belgium, Austria, Finland, Norway, and the Rest of Europe. In 2024, Germany is expected to account for the largest share of the Europe digital transformation market. The large share of this country is attributed to having a strong industrial base, high investments in Industry 4.0, such as smart manufacturing and automation. The widespread presence of basic digital skills among the German public and being the leading country in Europe as regards to preparations for the launch of the 5G network are supporting the large market share of Germany during the forecast period.

Key Players:

The key players operating in the Europe digital transformation market are IBM Corporation (U.S.), Siemens AG (Germany), Microsoft Corporation (U.S.), SAP SE (Germany), Capgemini SE (France), ABB Ltd. (Switzerland), Deutsche Telekom AG (Germany), Telefónica S.A. (Spain), Accenture plc (Ireland), TE Connectivity Ltd. (Switzerland), NXP Semiconductors N.V. (Netherlands), Telefonaktiebolaget LM Ericsson (Sweden), Disperse.io LTD. (U.K.), Happeo (Finland), Pigment (France).

Scope of the Report

Europe Digital Transformation Market, by Technology

• Mobility Solutions
• Internet of Things
• Network Connectivity
• Digital Twin & Simulation
• Robotic Process Automation
• Cloud Computing
• Artificial Intelligence and Machine Learning
• AR & VR
• Additive Manufacturing and 3D Printing
• Big Data & Analytics
• Cybersecurity

Europe Digital Transformation Market, by Offerings

• Hardware
• Software
• Services
  • Consulting Services
  • Planning and Designing Services
  • Engineering Services
  • Support and Maintenance Services
  • Application Development Services
  • Network Infrastructure Management Services
  • Other Services

Europe Digital Transformation Market, by Enterprise Size

• Small & Medium Enterprises
• Large Enterprises

Europe Digital Transformation Market, by Deployment Mode

• Cloud
• On-premise

Europe Digital Transformation Market, by End-use Industry

• Retail
• Government & Public Sector
• Healthcare
• Supply chain & Logistics
• Utilities
• Manufacturing
• BFSI
• IT & Telecom
• Media & Entertainment
• Education
• Transportation
• Other End-use Industries

Europe Digital Transformation Market, by Geography

• U.K.
• Germany
• France
• Italy
• Spain
• Poland
• Netherlands
• Denmark
• Belgium
• Austria
• Sweden
• Switzerland
• Finland
• Norway
• Rest of Europe

Key Questions Answered in the Report: