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Select ICT market segments to growth amid overall spending decline

Select ICT market segments to growth amid overall spending decline

A slight jump for public cloud and a surge for enterprise social networking and collaboration platforms

Credit: ID 71895099 © Kritchanut |

Australian ICT spending is set to decline by the end of 2020 due to the coronavirus pandemic, but some market segments are expected to grow and may make the most of a bad situation.

Overall ICT spending in Australia is expected to decline by 5.9 per cent by the end of 2020, with hardware spend expected to drop by 6.8 per cent.

This is according to research firm GlobalData, which previously predicted growth this year prior to the coronavirus pandemic for the whole market and the hardware segment at 9.4 per cent and 8.6 per cent, respectively.

Kaipa Sai Shashank, senior technology analyst at GlobalData, said the future of the whole Australian ICT market is still unclear, with its turnaround reliant on an uptick in spending on technologies aimed towards digital transformation projects.

However, the public cloud market – including software as-a-service, platform as-a-service and infrastructure as-a-service – and enterprise social networking and collaboration platforms are both expected to see increases in spending in the near future, with GlobalData predicting rises of 3.1 per cent and 29.4 per cent, respectively, for 2020.

Shashank pegged the hardware declines on businesses moving away from refreshing hardware setups and towards the cloud.

“Enterprises are refraining from non-critical hardware purchases, and these longer device refresh cycles will strongly impact spending on hardware in the near future,” he said.

“Also, the current trend of remote working is shifting organisations’ internal ICT infrastructure towards cloud-based applications and storage options that offer strong business continuity from an operational perspective.”

Furthermore, the software market is expected to be “significantly affected” by the pandemic, according to GlobalData research, due to the impact across the travel and leisure, transportation and logistics, consumer goods and manufacturing industries. 

The travel and leisure industry in particular is expected to suffer with its ICT spending expected to drop by 19.4 per cent, while the latter industries are predicted to see "significant declines", the research claimed.

“The uncertain economic environment has adversely affected the enterprise software spending on licenses and the roll-out of new applications in 2020 across all verticals,” Shashank added.

This prediction from GlobalData is largely in line with other research firms, with Gartner claiming that Australia would see a decline of 6 per cent, to $88.8 billion, in its IT spending for 2020.

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