Gartner

Newsroom

Sydney, Australia, November 1, 2011 View All Press Releases

Gartner Says Spending on IT by Australia's Utilities Sector Will Pick Up in 2012

Top Trends Shaping the Energy and Utilities Sector to be Discussed at Gartner Symposium/ITxpo on the Gold Coast, Australia, 14-17 November 2011

 Spending on information technology by utilities including water, electricity and gas providers in Australiahas been flat for the past three years, but is forecast to grow 2.6 percent in 2012 to reach A$2.4 billion (US$2.54 billion), according to the latest forecast from Gartner, Inc. The forecast includes spending by energy and utilities organisations on hardware, software, IT services and telecommunications.

External IT services is forecast to represent the biggest spending category for utilities companies, reaching A$923 million (US$979 million) in 2012. Gartner analysts said that as utilities move to towards smart meter deployments and smart grid upgrades, there is both a lot of new technology and a peak in demand for technical resources. Using service companies to supplement their own staff and knowledge is going to be a common practice.

However, spending by utilities on software is expected to grow the fastest in 2012, up by 10.3 percent.

According to vice president and Gartner Fellow Kristian Steenstrup, much of the new technology will be aided by software updates and replacements, for example billing systems that can cater for smart meter information and asset and work management systems that take advantage of data feeds from the smart grid.

“Some utilities companies select technology and software investments as if the process was a popularity contest, using the technologies that have been used the most by other companies as the sole criterion,” said Mr. Steenstrup.

“In doing so, they inadvertently select older established technologies or the most fashionable of the newest technologies, overlooking those that might be most appropriate to their enterprise and appetite for risk, and overlooking the maturity of the individual technology and the availability of support in the Australian market,” he said.

“Successful energy companies and utilities are streamlining business processes and investing in IT, often concurrently with enhancements on the operational technology or ‘OT’ side, which is where much of the smart grid investment is taking place,” Mr. Steenstrup said. “Continuing pressure to improve performance in markets driven by volatile energy prices, increased regulatory scrutiny and environmental needs, is forcing utilities to re-examine their application portfolios.”

Mr. Steenstrup said there is also a growing need to cater for diverse renewable energy sources, from residential as well as commercial scale operations. This in turn leads to a much more complicated scenario of feed in tariff credits and dealing with the intermittency of most renewable sources.

Mr. Steenstrup commented that companies operating in deregulated markets like Australia tend to have a focus and organization priority driven by competition and government-mandated levels of unbundling and business separation, which is playing out at a different pace, state by state.

“This issue was mainly restricted to the electricity industry, but we are now seeing this as an issue for water and gas providers as well,” he said.

Mr Steenstrup will discuss the top business and technology trends shaping the energy and utilities sector at Gartner Symposium/ITxpo on the Gold Coast, 14-17 November 2011. Gartner research director Randy Rhodes will present on smart metering and the development of future energy delivery infrastructure, the so-called ‘intelligent grid’. ‘Industry Perspectives’ sessions will be held on Monday 14 November, focusing on specific issues in the financial services, government, defence, higher education and energy/utilities sectors.

Further information on utilities sector IT spending is available in the Gartner report ‘Forecast: Enterprise IT Spending by Vertical Industry Market, Worldwide, 2009-2015, 3Q11 Update’, available at http://www.gartner.com/resId=1821741. This vertical industries forecast provides total enterprise IT spending, including internal spending and multiple lines of detail for spending on hardware, software, IT services, and telecommunications for vertical industries and 43 countries within seven geographies.

About Gartner Symposium/ITxpo
Gartner Symposium/ITxpo is the industry's largest and most important annual gathering of CIOs and senior IT executives. This event delivers independent and objective content with the authority and weight of the world's leading IT research and advisory organisation, and provides access to the latest solutions from key technology providers. Gartner's annual Symposium/ITxpo events are key components of attendees' annual planning efforts. They rely on Gartner Symposium/ITxpo to gain insight into how their organisations can use IT to address business challenges and improve operational efficiency.


Upcoming dates and locations for Gartner Symposium/ITxpo are:

November 7-10, Barcelona, Spain: www.gartner.com/eu/symposium

November 14-17, Gold Coast, Australia: www.gartner.com/au/symposium

November 21-23, Mumbai, India: www.gartner.com/in/symposium

Journalists can register by contacting Susan Moore, Gartner PR on +61 2 9459 4692 or susan.moore@gartner.com.

Additional information from the event will be shared on Twitter at http://twitter.com/Gartner_inc and using #GartnerSym.

Contacts
About Gartner

Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. We deliver the technology-related insight necessary for our clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, we are the valuable partner to clients in over 9,000 distinct enterprises worldwide. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA, and has 6,400 associates, including more than 1,480 research analysts and consultants, and clients in 85 countries. For more information, visit www.gartner.com.

Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.

Gartner Insight
Gartner Webinars