Australian tech spending to exceed $111 billion in 2022, says Gartner

Australian tech spending is forecast to increase by 6.3 percent this year, exceeding $111 billion in 2022, according to Gartner research.

The research house’s latest IT spending forecast reveals that the highest spending growth area in tech this year will be in enterprise software (up by 14.9 percent), followed by the IT services segment (up 6.1 percent from last year).

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This growth in IT services spending, which includes consulting and managed services, makes the segment the largest category for IT spending in Australia, expected to reach $39.2 billion.

Heightened demand for IT services, comes as a result of organisations increasingly relying on external consultants to assist with their digital transformation agendas.

According to John-David Lovelock, distinguished research vice president at Gartner, “Gartner expects the vast majority of large organisations to use external consultants to develop their cloud strategy over the next few years.”

“This will be particularly poignant with cloud as it serves as a key element in achieving digital ambitions and supporting hybrid work.”

A recent report by technology research and advisory firm Information Services Group (ISG) highlights the influence of the pandemic on the increased demand for consulting, as businesses were forced to accelerate their digitalisation journeys.

According to Scott Bertsch, partner and regional leader, ISG Asia Pacific, “Australian companies undergoing transformation not only need to solve technical challenges but also change their mindsets and question traditional management approaches.”

“Finding the right consultants, vendors and software and service providers is essential to this process.”

Gartner’s Lovelock suggests that CIOs will turn to consultants as their strategies shift from the short-term response mode of the pandemic, to longer term transformation programs.
“2022 is the year that the future returns for the CIO,” said Lovelock.

“[CIOs] are now in a position to move beyond the critical, short term projects over the past two years and focus on the long term. Simultaneously, staff skills gaps, wage inflation and the war for talent will push CIOs to rely more on consultancies and managed service firms to pursue their digital strategies.”