​Gartner predicts Australian IT spending to tip AU$85b in 2017

The analyst firm is expecting IT spending in Australia to increase by 2.7 percent year on year.
Written by Asha Barbaschow, Contributor

Australian organisations will spend more than AU$85 billion on information technology related services and equipment this year, according to analyst firm Gartner.

The projected total is a 2.7 percent increase over the total 2016 spend, with IT services expected to dominate the overall segment share. More than AU$30.6 billion is projected to be spent on services in 2017 and AU$31.3 billion the following year.

Second to IT services, the communications services spend is forecast to reach the AU$29.5 billion mark in both 2017 and 2018.

Gartner expects spending on devices such as mobile phones, PCs, tablets, and printers to ease off over the next two years, with the 2017 figure of AU$10.5 billion already a AU$200 million drop from Australia's total 2016 spend.

Software is predicted to be the fastest growing segment in 2017, with AU$11.6 billion to be spent in 2017, and AU$12.9 billion estimated for next year. Datacentre-related spend will spike at AU$2.7 billion this year, before returning to AU$2.6 billion in 2018.

Previously, Gartner attributed its projected increase in spending to the realisation that an organisation needs a digital platform strategy. Peter Sondergaard, senior vice president and global head of research at Gartner, said in October that the battle for ownership of digital platforms had begun.

"The good news is that there's incredible opportunities for those companies that innovate, lead, and ultimately succeed in the creation of new digital platforms that meet their customers' needs better than their competitors," Sondergaard said. "The bad news for those hearing about this seismic shift for the first time is, basically, you're already a long way behind."

In New Zealand, spending on IT is forecast to reach NZ$11.4 billion in 2017, up 2.3 percent from the country's 2016 spend.

Fixed and mobile communications services is where Gartner predicts New Zealand organisations will send their money in 2017, while similar to Australia, software will be the fastest growing segment this year.

Communications services will have the most spent on it this year, with Gartner predicting the total spend for the segment to come in at NZ$4.3 billion, while datacentre systems is pinned to have a NZ$402 million spend in 2017, before dropping to a projected NZ$398 million in 2018.

Globally, Gartner has projected a total of $3.5 trillion to be spent in 2017 on IT, a 2.7 percent increase from 2016. This growth rate, however, is down from earlier projections of 3 percent.

"2017 was poised to be a rebound year in IT spending. Some major trends have converged, including cloud, blockchain, digital business, and artificial intelligence. Normally, this would have pushed IT spending much higher than 2.7 percent growth," John-David Lovelock, research vice president at Gartner, said.

"However, some of the political uncertainty in global markets has fostered a wait-and-see approach causing many enterprises to forestall IT investments."

Worldwide devices spending, which includes PCs, tablets, ultramobiles, and mobile phones, is projected to remain flat in 2017 at $589 billion, with Gartner noting earlier this week that global shipments of PCs had fallen for the fifth straight year.

The analyst firm said, however, that emerging markets will drive the replacement cycle for mobile phones as smartphones are more frequently used as a main computing device and replaced more regularly than in mature markets.

The worldwide IT services market is forecast to grow 4.2 percent in 2017, with investments in digital business, intelligent automation, and services optimisation and innovation to drive growth in the market.

"The range of spending growth from the high to low is much larger in 2017 than in past years. Normally, the economic environment causes some level of division, however, in 2017 this is compounded by the increased levels of uncertainty," Lovelock added.

"The result of that uncertainty is a division between individuals and corporations that will spend more -- due to opportunities arising -- and those that will retract or pause IT spending."

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