German digital economy is the engine of growth

Bitkom expects turnover in the German IT and telecommunications (ICT) market to increase by 4.4% to 235.8 billion euros in 2025. According to the industry association, a further increase of 4.5% to 246.4% is possible in the coming year. At the same time, job growth is continuing: after an increase of 3500 jobs in 2024, the number of people in employment is expected to rise by around 9000 to 1.354 million this year.

At the presentation of the new forecast, Bitkom President Ralf Wintergerst attested that the digital economy is largely crisis-proof – even if not all companies can benefit from the growth. Against the backdrop of geopolitical uncertainties and the current difficult economic environment, the growth does indeed seem respectable. The relevant business climate indices continue to be negative despite recent slight improvement trends. The Bitkom-ifo digital index, for example, which is made up of the current business situation and companies' future business expectations, remained 1.0 point below the zero line in June, which is unusual for the sector. Nevertheless, business expectations recovered and improved by 10 points to minus 3.2 points for the coming quarter. This reflects the industry's confidence in the new German government and the Ministry of Digital Affairs.

Software, AI and cloud

The driving force behind the market growth of 4.4% forecast for this year continues to be information technology and, in particular, the software sector. According to the current forecast, IT sales in Germany are expected to reach 161.3 billion euros this year. This corresponds to an increase of 5.7 percent. At 9.5 percent to 52.7 billion euros, the software business is growing at its usual disproportionately high rate – even if the growth rate has slipped below the 10 percent mark for the first time in years. As expected, the influence of AI and cloud computing within this segment is becoming increasingly noticeable. For example, the volume of the AI platforms sub-segment, on which the relevant applications are developed, trained and operated, is expected to grow by 50% to EUR 2.3 billion; business with development platforms as a whole is expected to increase by 14% to just under EUR 15 billion. The demand for security software and collaboration tools is also growing at double-digit rates, increasing by 11% to EUR 5.4 billion and 12% to EUR 1.5 billion respectively.

Well over half of all software sales are already generated in public clouds. After EUR 26.2 billion (+25%) in 2024, this is forecast to account for EUR 30.6 billion (+17%) this year. A similar trend is emerging for IT services. At EUR 19.3 billion (+13%), cloud-related services are expected to account for 37% of the anticipated total turnover of EUR 52.6 billion (+3.1%).

Growth in hardware too

According to Bitkom forecasts, the market for IT hardware will grow by 4.8% to EUR 56 billion this year. The Infrastructure-as-Service segment is clearly ahead in terms of growth, with an increase of 24.1% to EUR 6.5 billion. Sales of tablets (EUR 2.4 billion, +18%), notebooks (EUR 6.9 billion, +11.2%) and desktop PCs (EUR 2.3 billion, +10.4%) are also expected to improve comparatively strongly. For the telecommunications market, the association is forecasting manageable growth of 1.7% to EUR 74.5 billion. As usual, the telecommunications services segment will account for the largest share of this at EUR 53.4 billion (+1.2%). Sales of end devices are expected to increase by 1.7% to EUR 13.1 billion. For investments in telecommunications infrastructure, the market researchers are forecasting an increase of 5.1% to EUR 8 billion.

All information on the forecast can be found at Bitkom.

(mma)