Australian spending on IT products and services is expected to increase 3.5 per cent reaching approximately $93 billion in 2019.
That is according to analyst firm Gartner, who predicted that the Australian growth to be slightly higher than the global growth of 3.2 per cent.
IT services represents the largest category of IT spending in Australia with the market forecast to reach $34.4 billion in 2019, an increase of 4.4 per cent from 2018.
"An expected global slowdown in economic prosperity, paired with internal pressures to cut spending, is driving organisations to optimise enterprise external spend for business services such as consulting," Gartner stated.
Meanwhile, enterprise software spending is forecast to experience the highest growth with a 10.4 per cent increase in 2019.
Spending on devices is forecast to decline slightly in 2018 and 2019, according to Gartner, despite small increases in average selling prices across all devices in Australia, unit volumes are declining.
Enterprises are buying fewer PCs, laptops, tablets and mobile phones plus the steadily increasing lifespans across all devices is translating into a lower replacement rates. This trend is unlikely to reverse, according to the research firm.
Application software will represent 33 per cent of the incremental spending on IT every year from 2019 through 2022.
"While currency volatility and the potential for trade wars are still playing a part in the outlook for IT spending, it’s the shift from ownership to service that is sending ripples through every segment of the forecast," said John-David Lovelock, research vice president at Gartner.
"What this signals, for example, is more enterprise use of cloud services - instead of buying their own servers, they are turning to the cloud.
"As enterprises continue their digital transformation efforts, shifting to ‘pay for use’ will continue. This sets enterprises up to deal with the sustained and rapid change that underscores digital business."
According to Lovelock, enterprises are shifting from capital expenditure (capex) and commoditised technology such as fixed and mobile communications services, toward investment in technologies that advance digital business, such as cloud, security and advanced analytics including augmented and artificial intelligence.
Gartner also expects servers to experience a decline in 2019 which will impact overall data centre systems spending as growth slows to three per cent in 2019.