Australia's IT spending to surge to AUD $147 billion in 2025

IT spending in Australia is projected to reach AUD $147 billion in 2025, reflecting an 8.7% increase from 2024, according to the newest forecast by Gartner. Notably, spending on software is expected to see the most significant growth, with an increase of 13.4% anticipated in 2025.

"Investments in cybersecurity, generative AI (GenAI), and cloud will play a major role in driving IT spending in Australia next year," stated Andy Rowsell-Jones, Distinguished VP Analyst at Gartner. "Cybersecurity looks set to remain at the top of the investment list, as highly publicised data breaches this year keep executives worried about a potential fallout and regulators pushing for improved competence."

Gartner analysts are currently discussing the latest CIO investment trends during the Gartner IT Symposium/Xpo, taking place on the Gold Coast. According to Rowsell-Jones, Australian organisations are prioritising digital investments to improve operating margins, ensure compliance, and minimise risks. Consequently, IT service providers are expected to see increased demand as companies seek to achieve these outcomes.

Spending on IT services is forecast to be the largest category within the IT spending sector in Australia for 2025, amounting to over AUD $53.4 billion, which represents a 7.2% rise from 2024. The increased utilisation of consulting services and infrastructure as a service (IaaS) will drive this category forward.

John-David Lovelock, Distinguished VP Analyst at Gartner, highlighted the significant role GenAI is expected to play. "With the large number of Australian organisations expected to deploy GenAI within the next year, most are turning to the cloud to support GenAI workloads," Lovelock explained. "However, some are deploying GPU clusters in their data centres, which will require network and storage infrastructure investments." Spending on data centre systems is forecast to increase by 11.3% to AUD $5.7 billion in 2025, though this is a slight deceleration from 2024's growth pace.

The overall IT spending forecast for 2025 includes diverse sectors. Spending on devices is anticipated to rise by 9.1% to reach AUD $15.9 billion. Communications services, another critical sector, are forecasted to increase by 3.2%, reaching AUD $25.9 billion in 2025. The Gartner IT spending forecast utilises rigorous analysis of sales by thousands of vendors across the full spectrum of IT products and services, supplemented by primary and secondary research methods to provide comprehensive market size data.

The insights into IT spending trends form part of Gartner's broader quarterly IT spending forecasts, which offer a unique perspective for understanding market opportunities and challenges. These comprehensive reports aid Gartner's clients in navigating the changing IT landscape effectively.