Australia's tech spending revolution is coming — and we can thank the trade war

Australia is on the cusp of a tech spending revolution, and we owe thanks to the global trade war. While tariffs and geopolitical uncertainty have sparked concerns about economic fallout, they’ve also become a driving force for change. Businesses aren’t just spending more, they’re spending smarter.

According to Gartner, Australian IT spending is set to surge to $147 billion this year, representing a 8.7% YoY increase. While the sharpest growth is in cybersecurity, generative AI and cloud, the increased investment reflects a strategic shift. Businesses are focused on reducing risk and navigating challenging economic conditions, rather than engaging in a spending spree.

Businesses are spending smarter, with a fundamental shift in how organisations approach digital transformation towards more financial oversight and better governance.

Economic pressure is driving strategic discipline

Macquarie University’s Business Outlook Scenarios Survey highlights that over half of Australian businesses now cite geopolitical risks and tariffs as their top concerns. Similarly, the RBA notes this uncertainty is weighing on some investment decisions. However, rather than reducing IT spending, many businesses are rethinking their strategies. Gone is the blind pursuit of scale, replaced by strategic growth, tighter cost controls and greater resilience. Businesses are prioritising efficiency and only pursuing growth when conditions are right or for significant innovations, such as AI.

This environment is demanding a more disciplined approach to technology investment, seeing FinOps continue to evolve from a niche concept to a mainstream practice. Businesses are adopting IT financial management frameworks, processes and tools, to better manage costs, forecast returns and align IT initiatives with broader objectives through sophisticated financial modelling and compliance tools. This increased financial discipline not only improves operational agility but also supports sustainable growth and competitiveness in a rapidly evolving digital and geopolitical landscape defined by uncertainty.

This, combined with a ‘grow smarter, not just bigger’ mindset, is reshaping Australian business strategies, and not just for enterprises.

Mid-market firms adopt advanced IT practices

Advanced IT finance practices were once the domain of large enterprises. Today, mid-sized Australian businesses are increasingly embracing ITFM and FinOps to gain visibility, optimise spend and drive accountability.

And it’s not just an optional extra; it’s a necessity. According to research from Prospa, while 74% of business owners rate their business health as good, many are making difficult trade-offs. One in five have less than a month’s worth of cash on hand. A third have tapped personal funds to stay afloat while stress levels are rising.

But rather than pulling back, these mid-sized businesses are investing in tools that improve operational efficiency, align IT with business objectives, and build resilience into their operations. With access to more sophisticated modelling and real-time insights, they’re turning constraints into catalysts for smarter decision-making.

Cloud, AI and cybersecurity drive a competitive edge

This smarter mindset is extending to how businesses approach emerging technologies. Australian organisations are doubling down on digital maturity, not just to sell more, but to work more productively, protect their businesses better, and innovate faster.

Cloud technologies, generative AI, and cybersecurity are no longer fringe investments; they’re foundational. Software spend alone is set to increase by 13.4% in 2025, driven by the need to safeguard systems in a volatile landscape as well as improve customer engagement and manage data intelligently.

These technologies don’t just deliver efficiency. They’re creating a competitive advantage and, for many businesses, differentiated, data-driven technology stacks are the difference between surviving and thriving in an increasingly complex global environment.

A new era of smarter growth

Australia’s tech spending is no longer just about size, it’s about strategy. The combination of global economic pressures and rapid technological evolution is forcing organisations to be more intentional, more agile and more accountable.

And that’s a good thing, because in this next chapter of digital transformation, the winners won’t be the biggest spenders; they’ll be the smartest.

With FinOps and IT financial management now within reach of every business, Australia is well-placed to not just weather uncertainty but emerge stronger, more resilient and more competitive than ever.

Image credit: iStock.com/BlackJack3D