Australian companies are spending 3.7% more on tech this year than last year but that money doesn’t seem to be going to traditional vendors, based on data coming from Gartner.
Gartner has revised their latest quarterly worldwide IT spending forecast upwardsdue to the U.S. dollar decline against many other currencies. Australian total technology spending is forecast to top $83.1B billion this year, an increase of 3.7% from 2016 and above the global average.
Enterprise software is the fastest growing category, rising by almost 8% but only two of the top 10 IT vendors posted organic revenue growth.
IT Services are expected to hit $30B, with communications getting close to $27B. Software and hardware share about $24B almost evenly with the remainder of the spend categorised as data centre systems by Gartner.
Here is what is included in each category:
- Data centre systems — Servers, storage, enterprise network equipment and unified communications
- Devices — PCs and tablets, mobile phones and printers
- Enterprise software — Enterprise application software and infrastructure software
- IT services — Business IT services and IT product support
- Communications services — Consumer fixed and mobile voice and data services, enterprise fixed and mobile voice and data services
While many of the traditional hardware vendors and comms providers are continuing to stay reasonably strong, we are seeing a move in the software business. As more and more software purchasing moves to the cloud, we’ll see traditional vendors struggle to grow unless they pivot or make large acquaitions, like last year’s purchase of Netsuite by Oracle. And while server hardware keeps moving forward, that spend will likely shift away from “owner operators” to shared service providers.
What’s happening in your budget? Is it moving in the directions Gartner forecasts? If it is, is it challenging for the rest of the business to understand the shift?