Gartner: ANZ IT spending continues to outstrip global average

Worldwide spending on information technology products and services is projected to total US$3.74 trillion in 2019, an increase of 0.6% from 2018, according to the latest forecast by Gartner.

This is slightly down from the previous quarter's forecast of 1.1% growth.

Source: Gartner (July 2019)

In Australia, spending on technology products and services is expected to reach almost A$93.8 billion in 2019, a 3.1% increase from last year, and reach $107 billion in 2022.

In New Zealand, spending on technology products and services is expected to reach NZ$13.4 billion in 2019, up 2.3% from last year, and reach almost $15.2 billion in 2022.

Spending on Technology by Segment, New Zealand, 2018-2022 (Millions of New Zealand Dollars)

"Despite uncertainty fuelled by recession rumours, Brexit, trade wars and tariffs, we expect IT spending to remain flat in 2019," says Gartner research vice president John-David Lovelock.

"While there is great variation in growth rates at the country level, virtually all countries tracked by Gartner will see growth in 2019. Despite the ongoing tariff war, North America IT spending is forecast to grow 3.7% in 2019 and IT spending in China is expected to grow 2.8%.

"Although an economic downturn is not the likely scenario for either 2019 or 2020, the risk is currently high enough to warrant preparation and planning. Technology general managers and product managers should plan out product mix and operational models that will optimally position product portfolios in a downturn should one occur.

The enterprise software market will experience the strongest growth in 2019, reaching US$457 billion, up 9% from US$419 billion in 2018.

CIOs are continuing to rebalance their technology portfolios, shifting investments from on-premises to off-premises capabilities.

As cloud becomes increasingly mainstream over the next few years, it will influence ever-greater portions of enterprise IT decisions, in particular, system infrastructure.

Prior to 2018, more of the cloud opportunity had been in application software and business process outsourcing.

Over this forecast period, it will expand to cover additional application software segments, including office suites, content services and collaboration services.

"Spending in old technology segments, like data center, will only continue to be dropped," adds Lovelock.

 Globally, consumer spending as a percentage of total spend is dropping every year in every region due to saturation and commoditisation, especially with PC, laptops and tablet devices.

Cloud applications allow these devices to have an extended life, with less powerful equipment needed to run new software. This is why the devices market will experience the strongest decline in 2019, down 4.3% to $682 billion in 2019.

"There are hardly any 'new' buyers in the devices market, meaning that the market is now being driven by replacements and upgrades," says Lovelock.

"Add in their extended lifetimes along with the introduction of smart home technologies and IoT, and consumer technology spending only continues to drop.

Gartner's IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services.

Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments.

These reports help Gartner clients understand market opportunities and challenges.