Aussie IT spending to bounce back following COVID-19 decline: Gartner

IT spending in Australia is expected to bounce back in 2021 after a minor slowdown last year due to the economic uncertainty around COVID-19, research from Gartner has revealed.

The analyst firm said local IT spending is expected to reach $98 billion in 2021, a four percent increase from 2020. In comparison, spending declined 1 percent in 2020 to $94 billion.

All segments are also forecast to grow, with enterprise software and data centre spending expected to make the fastest turnaround.

Globally, the rate of spending growth is forecast to be higher at 6.2 percent, with up to US$3.9 trillion expected to be spent on technology. The decline recorded in 2020 was also larger at 3.2 percent.

Gartner said 2021 will see businesses forced to accelerate digital business transformation plans by at least five years to survive in a post-COVID-19 world, including increased rates of remote work and digital customer interactions.

“CIOs have a balancing act to perform in 2021 — saving cash and expanding IT,” Gartner distinguished research vice president John-David Lovelock said.

“With the economy returning to a level of certainty, companies are investing in IT in a manner consistent with their expectations for growth, not their current revenue levels. Digital business, led by projects with a short Time to Value, will get more money and board level attention going into 2021.”

Like in Australia, each segment is expected to rebound globally in 2021 with enterprise software and devices posting the highest growth.

“There are a combination of factors pushing the devices market higher,” Lovelock said.

“As countries continue remote education through this year, there will be a demand for tablets and laptops for students. Likewise, enterprises are industrialising remote work for employees as quarantine measures keep employees at home and budget stabilisation allows CIOs to reinvest in assets that were sweated in 2020.”

Gartner said that returning global recovery back to 2019 spending rates will not occur until 2022, but some countries may recover faster. Some non-COVID-19 geopolitical factors like Brexit and the US-China tension may also inhibit recovery for some regions.

“The biggest change this year will be how IT is financed, not necessarily how much IT is financed,” Lovelock said.

“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.”