by George Nott

IT spend in Australia to recover next year

Oct 25, 2016
Business Intelligence

Australia’s IT spend will bounce back and reach $85 billion next year, according to Gartner forecasts.

That figure represents a 2.8 per cent increase on this year, which saw total IT spend in the Asia Pacific region decrease by 1.4 per cent. That fall was bigger than the 0.3 per cent decrease seen globally and due in part to a 7.4 per cent decrease in local investment in devices.
The majority of next year’s IT spend will go on communications services and devices, and the biggest growth areas will be in software, IT services and data centre systems.
Software spending will grow by 10.2 percent in 2017 to total $35.6 billion. IT services spending is predicted to increase by 4.1 percent next year to reach $98.8 billion. Data centre systems spend will grow by nearly 5 per cent.
Blame it on the Brexit
Globally this year IT spend will shrink by 0.3 per cent, and Brexit is to blame, according to Gartner analysts.
“The immediate impact of Brexit has caused modest growth in IT spending to turn negative for 2016,” said John-David Lovelock, research vice president at Gartner. “Without the U.K., global IT spending growth would have been modestly positive at 0.2 percent in 2016, but with the U.K. included, IT spending is expected to decrease 0.3 percent.
“The immediate impact of the British pound will also cause the IT spending patterns to shift as prices for IT will increase.”
Analysts expect to see some countries in Europe make more investment in IT as they try to become a more attractive option for the financial services firms exiting the UK to headquarter in.
“We are seeing banks in talks with these countries to examine the possibility of moving their operations outside of the UK,” Lovelock said.
Earlier this week the British Bankers’ Association warned that British banks’ “hands are quivering over the relocate button”.
Gartner analysts added that they did not believe the pending US presidential election, or the winning candidate, would affect IT spending trends.
“Typically, there is a slight pause in IT spending leading into the election, and then a relief in spending, subsequently. However, trends have shown that IT spending in the U.S. is not dependent on presidential leadership, so neither candidate should have a significant impact on IT spending in the near-term.”