Software and services sales to surge: Gartner

Analyst firm Gartner has predicted that Australian businesses will spend big on software and services.

The firm has issued a new forecast that says spending on technology products and services is forecast to grow 5.7 percent to $99.6 billion in 2020, and reach $103.2 billion in 2021. That growth is faster than the firm’s predicted global average of 3.4 percent

Gartner research vice-president John-David Lovelock said “Almost all of the market segments with enterprise software are being driven by the adoption of software as a service (SaaS). We even expect spending on forms of software that are not cloud to continue to grow, albeit at a slower rate. SaaS is gaining more of the new spending, although licensed-based software will still be purchased and its use expanded through 2023.”

Forecast: Spending on IT Products and Services, Australia, 2019-2021 (AUD millions)

Segment	2019	2020	2021
Data Centre Systems	3,063	3,134	3,103
Software	16,866	18,878	21,035
Devices	12,792	13,092	12,520
IT Services	34,370	36,000	37,632
Communication Services	27,154	28,529	28,882
Grand Total	94,245	99,634	103,172

Source: Gartner (January 2020)

Cloud spending growth will also move faster than traditional tech until 2022, the firm predicts. Which accounts for the predicted dip in data centre sales foe 2021.

“Last quarter, we introduced the ‘and’ dilemma where enterprises are challenged with cutting costs and investing for growth simultaneously,” Lovelock said. “Maturing cloud environments is an example of how this dilemma is alleviated: Organizations can expect a greater return on their cloud investments through cost savings, improved agility and innovation, and better security. This spending trend isn’t going away anytime soon.”