Australian IT spending hits $93.8 billion

Australian IT spending hits $93.8 billion

IT services forms bulk of expenditure at $34.3 billion

Credit: Dreamstime

Spending on technology products and services in Australia is expected to reach almost $93.8 billion in 2019.

The figures from Gartner mark a 3.1 per cent increase from last year, with spending expected to crack $102 billion by 2021.

The analyst firm has broken this up into five areas: IT services lead the charge at $34.3 billion; communication services will hit $26.8 billion; software $16.8 billion; devices $12.6 billion and data centre systems $3 billion in 2019.

Australia's growth is outpacing the global rate, which is expected to increase by 0.6 per cent to US$3.74 trillion. This in itself represents a slight decrease from the previous quarter forecast of 1.1 per cent growth, the analyst firm said. 

“Despite uncertainty fuelled by recession rumours, Brexit, trade wars and tariffs, we expect IT spending to remain flat in 2019,” Gartner research vice president, John-David Lovelock, said.

“While there is great variation in growth rates at the country level, virtually all countries tracked by Gartner will see growth in 2019. Despite the ongoing tariff war, North America IT spending is forecast to grow 3.7 per cent in 2019 and IT spending in China is expected to grow 2.8 per cent.”

Lovelock pointed out that although an economic downturn is not the likely scenario for either 2019 or 2020, the risk was high enough to warrant preparation and planning. 

“Technology general managers and product managers should plan out product mix and operational models that will optimally position product portfolios in a downturn should one occur,” he said. 

The enterprise software market is tipped to experience the strongest growth in 2019, reaching US$457 billion, up nine per cent from US$419 billion last year. 

As cloud becomes increasingly mainstream over the next few years, it will influence ever-greater portions of enterprise IT decisions, in particular system infrastructure, the analyst firm said. 

Prior to 2018, more of the cloud opportunity had been in application software and business process outsourcing. Over this forecast period it will expand to cover additional application software segments, including office suites, content services and collaboration services. 

“Spending in old technology segments, like data centres, will only continue to be dropped,” Lovelock added. 

Globally on the consumer front, the devices market will continue its downward spiral, dropping 4.3 per cent to $682 billion in 2019, due to market saturation and commoditisation with PC, laptops and tablet devices. 

“There are hardly any ‘new’ buyers in the devices market, meaning that the market is now being driven by replacements and upgrades,” he said. “Add in their extended lifetimes along with the introduction of smart home technologies and IoT, and consumer technology spending only continues to drop.”

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