Home Market Australia follows global growth trend, with tech spend forecast to hit $84.5b

Australia follows global growth trend, with tech spend forecast to hit $84.5b

Australia follows global growth trend, with tech spend forecast to hit $84.5b Image courtesy of David Castillo Dominici at FreeDigitalPhotos.net Featured

Technology spending in Australia is forecast to grow 2.3% to reach A$84.5 billion in 2018, as the latest forecasts for global technology spending have been revised upwards by 1.8% to 6.2% – or US$3.7 trillion for 2018.

The latest report from Gartner forecasts Australian technology spending in 2018 will include A$30.4 million on IT services with communications services coming in as the second highest spend at A$26.6 million.

And Australia's forecast spending on software for the 12 months is A$12.5 million, with A$12 million forecast to be outlayed on devices.

Gartner reveals the global figures for tech spending are the highest annual growth rate since 2007, but it cautions that this is not a sign of a new cycle of IT growth.

According to Gartner, the declining US dollar has caused currency tailwinds of 3.2% and spending on IT around the world is growing at expected levels, with 3.0% in line with the expected global economic growth of 3.3% in 2018.

And Gartner cautions that multinational technology vendors will need to hedge against further currency fluctuations in 2018.

"Although global IT spending is forecast to grow 6.2% this year, the declining US dollar has caused currency tailwinds, which are the main reason for this strong growth," said John-David Lovelock, research vice-president at Gartner.

spending aust

"This is the highest annual growth rate that Gartner has forecast since 2007 and would be a sign of a new cycle of IT growth. However, spending on IT around the world is growing at expected levels and is in line with expected global economic growth. Through 2018 and 2019, the US dollar is expected to trend stronger while enduring tremendous volatility due to the uncertain political environment, the North American Free Trade Agreement renegotiation and the potential for trade wars."

Gartner's report shows that worldwide spending for devices — PCs, tablets and mobile phones — is forecast to grow in 2018, reaching US$706 billion, an increase of 6.6%  from 2017.Gartner also reports that enterprise software spending is forecast to experience the highest growth in 2018 with an 11.1% increase.

And, barring unexpected disruption, Gartner says the software industry is expected to continue capitalising on the evolution of digital business. Application software spending is expected to continue to rise through 2019, and infrastructure software will also continue to grow, bolstered by modernisation initiatives.

gartner global

Even with a strong end to 2017, Gartner says worldwide spending on data centre systems is forecast to grow 3.7% in 2018, down from 6.3% growth in 2017.

“The longer-term outlook continues to have challenges, particularly for the storage segment. The strength at the end of 2017 was primarily driven by the component shortage for memory components, and prices have increased at a greater rate than previously expected. Whereas previously, component shortages were expected to ease into 2018, the shortages are now expected to continue throughout the year with the supply not expected to ease until the end of the year,” Gartner notes.

On the device market, Lovelock says it "continues to see dual dynamics. Some users are holding back from buying, and those that are buying are doing so, on average, at higher price points".

"As a result, end-user spending will increase faster than units through 2022. However, total end-user spending and unit shipments are expected to be lower compared with previous forecasts, as demand for ultramobile premium devices, ultramobile utility devices and basic phones is expected to be slow."

Graphics: courtesy Gartner

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

 

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