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Australian IT spending to grow by 6.4% to $103B

Australian IT spending to grow by 6.4% to $103B

Software market to see the biggest surge in growth.

Credit: Dreamstime

Australia’s IT and technology spending is expected to reach almost $103 billion this year, rising by 6.4 per cent. 

According to a new forecast by Gartner, Australia’s growth rate for 2021 is likely to be more than double that of the previous year, when the coronavirus pandemic first erupted. 

However, growth in 2022 is predicted to once again slow down to 5.9 per cent, leaving the market valued at $109 billion. 

Broken down, IT services spending will eat into the lion share of the overall total, standing at $37 billion in 2021, with the growth rate doubling from 2020’s 2.3 per cent to 4.9 per cent this year. 

Software spending is predicted to experience the biggest expenditure acceleration in 2021, growing by 13.3 per cent to $23 billion. 

After a year of remote working, devices unsurprisingly also saw a spike, with its growth rate jumping from 3.7 per cent in 2020 to 12.7 per cent in 2021, reaching $16.4 billion by the end of this year. 

The data centre systems segment is predicted to see the biggest contraction, falling by 1.4 per cent to $2.6 billion. However, this decline will be slower than the year previous, whereby spending fell by 8.2 per cent.  

Communication services, which accounted for $23.6 billion of the $102 billion total, are also expected to contract this year by 0.4 per cent, again a slower rate than in 2020. 

Australia’s IT spending growth rate fell behind the global average, which Gartner has projected to total US$4.2 trillion in 2021, an increase of 8.6 per cent from 2020. 

According to the global report, IT spending is accelerating ahead of revenue expectations, with boards and CEOs more willing to invest in technology that has a “clear tie to business outcomes, and less so for everything else”.  

“Technology spending is entering a new build budget phase,” said John-David Lovelock, distinguished research vice president at Gartner.  

“CIOs are looking for partners who can think past the digital sprints of 2020 and be more intentional in their digital transformation efforts in 2021. This means building technologies and services that don’t yet exist, and further differentiating their organisation in an already crowded market.” 

The IT services segment globally is forecast to total US$1.2 trillion in 2021, an increase of 9.8 per cent from 2020.  

This, according to Gartner, is primarily due to a boost in infrastructure-as-a-service spending that supports mission critical workloads and avoids high on-premises costs. 

“Digital transformation can no longer be purchased overnight, and global IT spending projections reflect that,” added Lovelock. “As the world continues to open back up, enterprises will invest in tools that support innovation, anywhere operations and employee productivity and trust.” 

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Tags AustraliaGartnerIT spending2021

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