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Gartner anticipates $117.2 billion 2022 Australian IT spend

By Zach Thompson
Thu 7 Apr 2022

Gartner has projected a total Australian IT spend of AU$117.2 billion in 2022 in its latest forecast, increasing by 13.1% from 2021.

“This year is proving to be one of the noisiest years on record for CIOs,” Gartner distinguished research vice president John-David Lovelock says.

“Geopolitical disruption, inflation, currency fluctuations and supply chain challenges are among the many factors vying for their time and attention, yet contrary to what we saw at the start of 2020, CIOs are accelerating IT investments as they recognise the importance of flexibility and agility in responding to disruption.

“As a result, purchasing and investing preference will be focused in areas including analytics, cloud computing, seamless customer experiences and security.”

Gartner says the impact of inflated prices for IT hardware over the past two years, such as mobile devices and PCs, is beginning to spread into other areas, including software and services.

Additionally, the current shortage of IT talent is prompting more competitive salaries. This means technology service providers have to increase their prices, ultimately driving the increased spending in these areas in 2022 and 2023.

Gartner notes that software spending globally is expected to grow 9.8% to US$674.9 billion in 2022, and IT services are forecast to grow 6.8% to reach US$1.3 trillion.

Furthermore, Gartner says the increased adoption of enterprise application software, infrastructure software and managed services in the near and long term shows that the digital transformation trend is systemic and long-term rather than something only lasting one or two years.

Gartner says this is evident in infrastructure as a service (IaaS) platforms, which underpin all significant consumer-focused online offerings and mobile applications, comprising a considerable portion of the almost 10% growth in software spending in 2022.

Gartner expects digital business initiatives such as experiential end-consumer experience and supply chain optimisation will drive spending on enterprise applications and infrastructure software, prompting double-digit growth in 2023.

Gartner does not believe the conflict between Russia and Ukraine will impact Australia's IT spending. Instead, price and wage inflation compounded with talent shortages and other delivery uncertainties are expected to cause greater repercussions on CIOs’ plans in 2022.

However, Gartner says this is still not expected to slow down technology investments.

“CIOs anticipate having the financial and organisational ability to invest in key technologies throughout this year and next,” Lovelock says.

“Some IT spending was on hold in early 2022 due to the Omicron variant and subsequent waves but is expected to clear in the near-term.

“CIOs who keep their eye focused on key market signals, such as the shift from analog to digital business and buying IT to building it, as well as negotiate with their vendor partners to assume ongoing risks, will fare better in the long-term.

“At this point, only the most fragile companies will be forced to pivot to a cost cutting approach in 2022 and beyond.”

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