Australian IT spending to grow 3.5% in 2019

IT spending in Australia is on track to grow 3.5% in 2019 to nearly $93 billion, according to the latest forecast from Gartner.

The Australian IT market is on track to beat the forecast global average growth rate of 3.2%, and to improve on the expected 3.1% growth rate from 2018.

Enterprise software sales in Australia are projected to generate the most significant growth, with sales increasing 10.4% in 2019 to $15.9 billion — a significant increase from the forecast 8.3% growth of 2018.

Gartner Research Vice President John-David Lovelock said the increase is being driven by the ongoing transition to service-based business models.

“While currency volatility and the potential for trade wars are still playing a part in the outlook for IT spending, it’s the shift from ownership to service that is sending ripples through every segment of the forecast,” he said.

“What this signals, for example, is more enterprise use of cloud services — instead of buying their own servers, they are turning to the cloud. As enterprises continue their digital transformation efforts, shifting to ‘pay for use’ will continue. This sets enterprises up to deal with the sustained and rapid change that underscores digital business.”

But Gartner noted that Australia has lagged the US by cloud spending as a percentage of total enterprise IT spending for six years.

IT services will remain the largest segment of the Australian market, with spending projected to increase 4.4% next year to $34.4 billion, followed by communications services, with an expected 1.2% growth to $27.9 billion.

The data centre systems segment is also expected to grow in 2019, with total spending on track to grow 2.3% to $3 billion, but device sales are set to decline for the second straight year, with projected spending down 1.6% to $11.8 billion.

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