Australia’s technology spending is set to bounce back to growth in 2021 after last year’s coronavirus-induced decline, rising by 4 per cent to $98 billion.
According to analyst firm Gartner, all IT sectors are expected to return to growth this year with enterprise software expected to have the strongest rebound of 7.8 per cent.
Rising to $21 billion, the segment is expected to benefit from the expansion and improvements made to remote work support.
Last year, Australia’s IT industry spending shrunk by 1 per cent, meaning it failed to meet Gartner’s prediction of $98 billion in 2020.
Although this year’s forecast will see the industry playing catch-up, the numbers are promising for the IT channel.
In particular, partners in the data centre industry will see the second-highest growth in Australia, rebounding by 5.5 per cent growth to $3.1 billion, after being hit the hardest by cuts in 2020.
Meanwhile, expenditure on devices will rise by 4.4 per cent to $14.5 billion, although the move to remote work ensured this area experienced the lowest decline last year.
IT services, which declined by 1.5 per cent last year, will grow by 2.3 per cent in 2021 to $34.4 billion. At the same time, communications services will gain an uplift of 3.4 per cent to $26 billion, bouncing back from a decline of 2.2 per cent during the pandemic, the predictions suggest.
According to Gartner, this year’s buoyant forecast comes on the continued need for businesses to accelerate digital transformations, arguing that many will need to do this by around five years
The analyst firm added that a post-COVID-19 world will involve permanently higher rates of remote work and digital customer interactions.
“The biggest change this year will be how IT is financed, not necessarily how much IT is financed,” said John-David Lovelock, distinguished research vice president at Gartner.
“Greater levels of digitalisation of internal processes, supply chain, customer and partner interactions, and service delivery is coming in 2021, enabling IT to transition from supporting the business to being the business.”
Across the world, global IT spending will total US$3.9 trillion in 2021, an increase of 4.9 per cent from 2020. More than 10 per cent of this will be related to remote work technology, increasing by 5 per cent from 2020.
“Digital business represents the dominant technology trend in late 2020 and early 2021 with areas such as cloud computing, core business applications, security and customer experience at the forefront," Lovelock added.
"Optimisation initiatives, such as hyperautomation, will continue and the focus of these projects will remain on returning cash and eliminating work from processes, not just tasks."
However, despite the recovery, a return to 2019 levels of spending is not expected to occur until 2022, Gartner added.