European IT suppliers are too expensive and are being beaten on price by rivals in Asia and the US, research has found.
IT buyers say European firms are less appealing to do business with because of their "lack of price competitiveness and innovation", a report from accountancy firm KPMG said.
Crispin O'Brien, head of KPMG's Technology practice in the UK, said: "This will have alarm bells ringing in Europe's IT industry. Nearly everyone expects continued concessions on pricing from their IT suppliers as well as greater flexibility in structuring contracts and innovative solutions.
"But many doubt the ability of European suppliers to deliver in these areas. It is in these areas that they are most vulnerable to Asian competitors not only abroad but increasingly at home as well."
European IT companies did come out tops for attending to local business needs and scored second to North America for customer service, according to KPMG.
The survey, which interviewed 126 IT buyers, found European producers of mobile devices, applications and software are also becoming more competitive than Asian and US rivals.