Gartner research forecasts stong growth in IT investments across all key technologies
IT spending in Australia is expected to reach AU$147 billion in 2025, an increase of 8.7% from 2024, according to the latest forecast by Gartner, Inc. Spending on software will see the largest growth with an increase of 13.4% projected in 2025.
“Investments in cybersecurity, generative AI (GenAI) and cloud will play a major role in driving IT spending in Australia next year,” said Andy Rowsell-Jones, Distinguished VP Analyst at Gartner. “Cybersecurity looks set to remain at the top of the investment list, as highly publicized data breaches this year keep executives worried about a potential fallout and regulators pushing for improved competence.”
Gartner analysts are discussing the latest CIO investment trends during Gartner IT Symposium/Xpo, taking place on the Gold Coast until Wednesday.
GenAI to Drive Increase in Data Center Spending
Gartner forecasts data center systems spending by enterprises and service providers in 2025 will increase 11.3% to AU$5.7 billion. This is slightly slower than the pace of growth for 2024, which rebounded sharply from a 2.1% decline in 2023. This is due in large part to continued planning for GenAI in Australia.
Australian IT Spending Forecast (Millions of AU Dollars)
| 2023 Spending | 2023 Growth (%) | 2024 Spending | 2024 Growth (%) | 2025 Spending | 2025 Growth (%) | |
| Data Center Systems | 4,472 | -2.1 | 5,139 | 14.9 | 5,719 | 11.3 |
| Devices | 13,810 | -6.0 | 14,623 | 5.9 | 15,953 | 9.1 |
| Software | 35,569 | 12.8 | 40,421 | 13.6 | 45,848 | 13.4 |
| IT Services | 46,844 | 3.6 | 49,814 | 6.3 | 53,408 | 7.2 |
| Communications Services | 24,133 | 5.2 | 25,109 | 4.0 | 25,922 | 3.2 |
| Overall IT | 124,828 | 4.9 | 135,106 | 8.2 | 146,850 | 8.7 |
“With the large number of Australian organizations expected to deploy GenAI within the next year, most are turning to the cloud to support GenAI workloads,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “However, some are deploying GPU clusters in their data centers, which will require network and storage infrastructure investments.”
Largest Spending Directed to IT Services
IT services will continue to be the largest IT spending category in Australia in 2025, driven by increased use of consulting services and infrastructure as a service (IaaS). Spending in this category is forecast to reach over AU$53.4 billion in 2025, a 7.2% increase from 2024.
“Australian organizations are prioritizing digital investments next year on improving operating margins, ensuring compliance and minimizing risks,” said Rowsell-Jones. “They’re turning to IT service providers to help them enable these outcomes, in what appears to be a somewhat defensive play given the challenging business environment this year.”
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.
The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 2Q24 Update.”
Gartner Release (Main Image: Marvin Meyer/Unsplash)
