IT Spending in Australia to Reach Almost A$85 Billion in 2017 as the Battle for the Digital Platform Begins
October 25, 2016 | Gartner, Inc.Estimated reading time: 4 minutes
Total IT spending in Australia is forecast to reach almost A$85 billion in 2017, a 2.8% increase from 2016, as organizations build out their digital platform, according to Gartner, Inc. In New Zealand, IT spending is forecast to surpass NZ$11.5 billion, a 2.4% increase from 2016.
Globally, IT spending will be driven by growth in software and IT services revenue and is forecast to reach $3.5 trillion in 2017, up 2.9% from 2016 estimated spending of $3.4 trillion, according to the latest forecast by Gartner, Inc.
The bright spot for the Asia/Pacific region has also been the software and IT services segments. Software spending is projected to grow 6.4% in 2016, and it will grow another 10.2% in 2017 to total $35.6 billion (see Table 1). IT services spending is on pace to grow 2.9% in 2016 to reach $93 billion, and increase 4.1% in 2017 to reach $98.8 billion.
Speaking to an audience of more than 1,500 CIOs and IT leaders at Gartner Symposium/ITxpo on the Gold Coast today, Peter Sondergaard, senior vice president and global head of Research at Gartner, said that every organization needs a digital platform strategy.
The battle for ownership of digital platforms, where networks of stakeholders bring value to each other, has begun, said Mr. Sondergaard. The good news is that theres incredible opportunities for those companies that innovate, lead and ultimately succeed in the creation of new digital platforms that meet their customers needs better than their competitors. The bad news for those hearing about this seismic shift for the first time is, basically, youre already a long way behind.
Not every organization should assume a leadership role in a business ecosystem; however, CIOs must collaborate with their business counterparts to integrate digital platform development into their technology and business strategic planning, said Mr. Sondergaard.
CIOs will participate in the building of a new digital platform with intelligence at the center, Mr. Sondergaard said. That platform will enable ecosystems, connecting businesses and collapsing industries. It will change society itself, and the way people live.
This new digital platform that extends beyond traditional IT infrastructure using new technologies not familiar to the typical IT department. Your new digital platform will allow you to participate in the evolving world of business, government, and consumer ecosystems because ecosystems are the next evolution for digital. Its how you compete at scale, Mr. Sondergaard said.
The new digital platform consists of five domains: traditional IT systems, customer experience, the Internet of Things (IoT), intelligence and the ecosystem foundation.
Each of these domains are interconnected and interdependent. All have a role, and all are required, Mr. Sondergaard said. Your new digital platform will allow you to participate in the evolving world of business, government, and consumer ecosystems. Because ecosystems are the next evolution for digital. Its how you compete at scale.
Gartner analysts are discussing the key IT and business issues that are driving the evolution of digital business this week during Gartner Symposium/ITxpo here through Thursday. There has been interest among attendees regarding the impact of the UKs exit from the European Union, known as Brexit, and the upcoming U.S. presidential election will have on IT investment.
The immediate impact of Brexit has caused modest growth in IT spending to turn negative for 2016, said John-David Lovelock, research vice president at Gartner. Without the U.K., global IT spending growth would have been modestly positive at 0.2% in 2016, but with the U.K. included, IT spending is expected to decrease 0.3%. The immediate impact of the British pound will also cause the IT spending patterns to shift as prices for IT will increase.
Companies will be monitoring negotiations closely, and there will be some changes in IT investment. For example, in financial services, analysts expect to see some countries in Europe put more investment in IT to offer a more viable option for EU countries than the U.K.
We are seeing, for example, banks in talks with these countries to examine the possibility of moving their operations outside of the U.K., Mr. Lovelock said.
The U.S. presidential election is two weeks away. Gartner analysts do not believe the pending election, or the winning candidate, will affect IT spending trends.
We have also taken into account the U.S. presidential race, as well as a potential rate cut by the Federal Reserve. Typically, there is a slight pause in IT spending leading into the election, and then a relief in spending, subsequently. However, trends have shown that IT spending in the U.S. is not dependent on presidential leadership, so neither candidate should have a significant impact on IT spending in the near-term.
More detailed analysis on the outlook for the IT industry is available in the complimentary webinar on demand, IT Spending Forecast, 3Q16 Update: Impacts of Brexit Not Limited to the U.K. During the webinar, Gartner analysts discuss the effects that Brexit is having on global IT spending.
Gartner's IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.
About Gartner Symposium/ITxpo
Gartner Symposium/ITxpo is the world's most important gathering of CIOs and senior IT leaders, uniting a global community of CIOs with the tools and strategies to help them lead the next generation of IT and achieve business outcomes. More than 23,000 CIOs, senior business and IT leaders worldwide will gather for the insights they need to ensure that their IT initiatives are key contributors to, and drivers of, their enterprise's success.
Suggested Items
I-Connect007 Editor’s Choice: Five Must-Reads for the Week
05/10/2024 | Marcy LaRont, PCB007 MagazineSpring is a renewal each year as dormant flora bloom, and baby ducklings and geese are ever present in local bodies of water. Even though it is beginning to get hot, I love this time of year in Arizona, with the sun waking me around 5 a.m. It fills me with an energy that I often lose in the dark winter months. Wherever you find yourself in the world, I hope you are enjoying Spring and that you are filled with energy and enthusiasm for all the great work part of our daily lives in this industry.
TTM Technologies Appoints Wajid Ali to Board of Directors
05/10/2024 | TTM Technologies, Inc.TTM Technologies, Inc. announced that Mr Wajid Ali has been appointed by the unanimous vote of the remaining Directors to serve as a new Class I director on the Board, effective immediately.
SCHMID Group Closes Business Combination, Begins Trading on NASDAQ
05/02/2024 | SCHMID GroupGebr. SCHMID GmbH, a global solutions provider for the high-tech electronic, photovoltaics, glass, and energy systems industries, and Pegasus Digital Mobility Acquisition Corp. announced the completion of their business combination.
New Appointment Strengthens Ventec’s Value-Added Equipment Division
04/29/2024 | VentecVentec announces the appointment of Leigh Allinson as Commercial Director for its value-added PCB Equipment division 'Ventec Giga Solutions'.
Record Numbers of Exhibitors to Showcase Products and Services at EWPTE 2024
04/25/2024 | IPCWHMA/IPC announces that 215 exhibitors spanning over 50,000 nsf of exhibit space will introduce new product technologies, innovations and demonstrations of the electrical wire harness, wire, coil winding and cable processing industries’ newest advancements at Electrical Wire Processing Technology Expo (EWPTE) to be held at Baird Center May 14-16, 2024, in Milwaukee, Wis. This marks the largest number of exhibiting companies in the event’s history. More than 3,000 attendees are expected to attend this year’s event.