Australian businesses are set to increase their IT expenditure in the coming years, a new forecast by analyst firm Gartner suggests.
IT spending in Australia will climb to A$146.85 billion in 2025, marking an 8.7 per cent increase from 2024 with the software sector leading the growth, with a projected increase of 13.4 per cent in 2025, reaching AU$45.85 billion.
The surge in IT spending is largely driven by investments in key areas such as cybersecurity, generative AI (GenAI), and cloud technologies.
"Cybersecurity looks set to remain at the top of the investment list, as highly publicised data breaches this year keep executives worried about a potential fallout and regulators pushing for improved competence," distinguished VP analyst at Gartner, Andy Rowsell-Jones said.
Furthermore, the forecast also points to a significant uptick in data centre systems spending, projected to rise by 11.3 per cent to AU$5.72 billion in 2025.
That growth is primarily fuelled by the increasing adoption of generative AI (GenAI) technologies across Australian enterprises.
"With the large number of Australian organisations expected to deploy GenAI within the next year, most are turning to the cloud to support GenAI workloads," distinguished VP analyst at Gartner, John-David Lovelock, said.
"However, some are deploying GPU clusters in their data centres, which will require network and storage infrastructure investments," Lovelock added.
Meanwhile, IT services continue to dominate the spending landscape, with projections indicating it will remain the largest expenditure category in Australia for 2025.
This sector is forecast to reach AU$53.41 billion, representing a 7.2 per cent increase from 2024.
The growth in IT services is primarily driven by increased use of consulting services and infrastructure as a service (IaaS).
Category forecasts
| Category | 2023 Spending (millions of A$) | 2023 Growth (%) | 2024 Spending (million of A$) | 2024 Growth (%) | 2025 Spending (millions of A$) | 2025 Growth (%) |
|---|---|---|---|---|---|---|
| Data Centre Systems | 4,472 | -2.1 | 5,139 | 14.9 | 5,719 | 11.3 |
| Devices | 13,810 | -6.0 | 14,623 | 5.9 | 15,953 | 9.1 |
| Software | 35,569 | 12.8 | 40,421 | 13.6 | 45,848 | 13.4 |
| IT Services | 46,844 | 3.6 | 49,814 | 6.3 | 53,408 | 7.2 |
| Communications Services | 24,133 | 5.2 | 25,109 | 4.0 | 25,922 | 3.2 |
| Overall IT | 124,828 | 4.9 | 135,106 | 8.2 | 146,850 | 8.7 |
Source: Gartner
"Australian organisations are prioritising digital investments next year on improving operating margins, ensuring compliance and minimising risks," Rowsell-Jones added.
"They're turning to IT service providers to help them enable these outcomes, in what appears to be a somewhat defensive play given the challenging business environment this year," he said.
The forecast growth comes at a time when many sectors are tightening their belts, and potentially suggests that businesses see technology as a key driver of efficiency and competitiveness, rather than a cost to be cut.
These findings were presented at the Gartner IT Symposium/Xpo on the Gold Coast, where analysts discussed the latest chief information officer (CIO) investment trends.
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