Australian IT spending to hit $93 billion next year: Gartner

IT spending in Australia is forecast to reach close to $93 billion in 2019 on the back of growth in IT services and enterprise software spend, according to research from Gartner.

It represents a 3.5 percent increase from 2018, outpacing the worldwide forecast of 3.2 percent growth.

IT services, which also represents the largest category of IT spending in Australia, is expected to reach $34.4 billion next year, up 4.4 percent from this year’s $33 billion. Enterprise software meanwhile is expected to go up 10 percent to $15.9 million in 2019.

Gartner said 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.

“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,” Gartner research vice president John-David Lovelock said.

“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.”

Meanwhile, devices spending is forecast to decline slightly in both 2018 and 2019, as declining unit volumes in Australia counter small increases in average selling prices across all devices.

Gartner said enterprises are buying fewer PCs, laptops, tablets and mobile phones and lifespans have started to steadily increase across all devices. This translates to lower replacement rates, and is a trend unlikely to reverse.

This year, data centre systems spending in Australia is expected to grow 5 percent, buoyed by a strong server market. However server spending will begin to decline once again in 2019, impacting overall data centre systems spending, as growth slows to 3 percent.