IT contractors may be required to help businesses incorporate external services into their existing processes.

Research firm Gartner has found that some 40 per cent of businesses are planning to increase spending on external services.

In addition the group's survey established that the number of companies who spend between 50 and 75 per cent of their total IT budget on external services is increasing.

However, around a quarter of firms expect their IT budgets to decrease in size in the short-term.

Gartner vice-president Claudio Da Rold said European firms are highly cautious over their IT expenditure.

"Regardless of the future direction of the economy, European businesses and their service providers need to optimise their multi-sourced environments, while increasingly adopting industrialised IT service," he said.

The International Data Corporation's European Software-as-a-Service and cloud services research manager David Bradshaw, the cost of private cloud computing is going to be driven down by competition from public services.