Tech spending across the board in Australia is expected to skyrocket this year following a decline in 2020 and “knee-jerk” purchasing due to COVID-19, and will likely exceed pre-pandemic levels too, according to a new Gartner report.
The Gartner global IT spend forecast for 2021 found that global spending on IT is expected to exceed $US4 trillion this year, an increase of more than 8 per cent from 2020.
In Australia, IT spending is predicted to grow by 4.1 per cent to $98.3 billion in 2021.
This comes after a 1.1 per cent decline last year, and is also an increase from 2019, with tech spending hitting $95.5 billion in that year.
The growth will be driven by increases in all IT spending segments this year, the report found.
In Australia, the biggest growth segment will be from devices, which are expected to grow by 9 per cent, while enterprise software is also predicted to rise by 7.3 per cent.
This is driven by the focus of companies shifting to providing a “comfortable, innovative and productive environment for their workforce”, the Gartner report found.
Spending on enterprise software by Australian businesses was down by 2.2 per cent last year to $18 billion.
This is predicted to increase to $19.6 billion this year, and to increase a further 10 per cent in 2022.
Businesses spent $13.9 billion on devices last year, a decrease of 1.7 per cent year-on-year. This figure will increase by 9 per cent this year to $15 billion, the report predicted.
Gartner research vice-president John-David Lovelock said that 2020 saw ad-hoc tech spending from businesses focused on ensuring they could continue to operate during the pandemic, with 2021 to bring more consistency.
“Last year, IT spending took the form of a ‘knee-jerk’ reaction to enable a remote workforce in a matter of weeks,” Lovelock said. “As hybrid work takes hold, CIOs will focus on spending that enables innovation, not just task completion.”
There was a sharp drop in business spending on data centre systems last year, with a fall of 8.6 per cent.
This spending is expected to slightly increase in 2021.
Australia’s IT spending is still not increasing as quickly as the rest of the world, with worldwide tech spending forecast to jump by 8.4 per cent this year.
The report demonstrates how IT spending is now an element of all business operations and decisions, Lovelock said.
“IT no longer just supports corporate operations as it traditionally has, but is fully participating in business value delivery,” Lovelock said.
“Not only does this shift IT from a back-office role to the front of business, but it also changes the source of funding from an overhead expense that is maintained, monitored and sometimes cut, to the thing that drives revenue.”
The Gartner report relies on the “rigorous analysis” of sales by thousands of vendors across the entire range of IT products and services.
It uses primary research techniques along with secondary research sources in order to build a “comprehensive database of market size data” on which it bases its forecasts, the company said.
A Gartner report last year found that Australian government IT spend slumped in 2020. It was expected to fall by 7.6 per cent across state and federal governments, following another slight downturn in 2019.
This decline was driven by reduced purchasing of devices primarily, the report found.