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SYDNEY, Australia, October 29, 2020

Gartner Forecasts Australian Enterprise IT Spending to Grow 3.6% in 2021

Analysts Present Latest Research and Advice for CIOs Across Vertical Sectors During Gartner IT Symposium/Xpo 2020 APAC, October 27-29

Enterprise IT spending across all industry sectors in Australia will grow 3.6% to reach more than A$95.8 billion in 2021, following an expected 2.8% decline in 2020, according to the latest forecast by Gartner, Inc.

At Gartner IT Symposium/Xpo APAC this week, Gartner analysts presented the latest insights and advice for CIOs in industries including banking, utilities, education, government, insurance and manufacturing.

While all sectors are feeling the economic impact driven by the COVID-19 pandemic, utilities, government, education and healthcare have proven to be the most resilient in technology spending in Australia in 2020. Transportation, manufacturing and natural resources have been the hardest hit (see Table 1).

Kristian Steenstrup, distinguished research vice president at Gartner, explained that COVID-19 response is different in the resources and manufacturing industry from other industries because it is not always physically possible to shut down a site.

“These companies are in the top three sectors for technology spending in Australia, but as they are designed for continuous operation they simply can’t respond to external factors as quickly as a retailer, for example,” said Mr. Steenstrup. “The physical nature of asset intensive industries makes it harder for employees to work from home. Looking ahead, we’re seeing strong interest from CIO clients in technologies such as proximity tracking to enable fast response to outbreaks and in the longer-term remote monitoring and control of equipment. Analytics, artificial intelligence (AI) and the Internet of Things (IoT) will also attract investment next year.”

Table 1. Enterprise IT Spending Forecast by Vertical Industry (Millions of Australian Dollars)

 

2020 Spending

2020 Growth (%)

2021 Spending

2021 Growth (%)

Banking & Securities

18,501

1.8

19,333

4.5

Communications, Media & Services

18,005

-3.4

18,529

2.9

Education

2,878

3.0

3,125

8.6

Government

12,652

5.5

13,241

4.7

Healthcare Providers

2,996

2.1

3,243

8.2

Insurance

5,690

-0.2

5,940

4.4

Manufacturing & Natural Resources

16,001

-11.6

16,063

0.4

Retail

5,071

-6.7

5,180

2.2

Transportation

4,788

-15.5

5,284

10.4

Utilities

3,599

6.6

3,454

-4.0

Wholesale Trade

2,309

-2.5

2,433

5.4

Total Market

92,490

-2.8

95,825

3.6

Source: Gartner (October 2020)

Transportation has been negatively impacted by COVID-19 with some airlines grounding 95% of their fleet given lockdowns and country government restrictions for international travel. Work from home policies have hit commuter revenues on public transportation. Contagion concerns still abound as transit authorities implement passenger safety initiatives. Given the financial impact, this sector has had to cut back on IT spending by 15.5% in 2020.

Education IT spending growth to accelerate

Technology spending by education organizations in Australia is forecast to grow 8.6% to more than $3.1 billion in 2021 due to increased and necessary investments in laptops, tablets, communication and collaboration technologies to support online learning. Most primary, secondary and tertiary education institutions are offering either full online learning support or blended learning (a combination of on-campus and online instructions).

In addition to learner investment needs, education institutions are also investing in COVID-19 testing and contact tracing. Many research institutions as well as public health schools are contributing to COVID-19 related research and development worldwide.

Healthcare a long-term bright spot

IT spending by healthcare providers in Australia is forecast to grow 8.2% in 2021. The healthcare provider industry will continue to optimize it’s spending on legacy technology, prepare the organization for digital transformation and accelerate investment in key technologies that enable data-driven decision making. COVID-19 has catalyzed the adoption of IoT technologies (like virtual care and remote patient monitoring) and further spurred the already growing interest in BI/analytics and AI projects.

This forecast includes internal IT spending on staff and external spending on data center systems, software, IT services, telecom services and devices across 11 key industries and 35 subindustries. Further detail is available to Gartner clients in “Forecast: Enterprise IT Spending by Vertical Industry Market, Worldwide, 2018-2024, 3Q20 Update.”

 

About Gartner IT Symposium/Xpo

Gartner IT Symposium/Xpo 2020 is the world's most important gathering for CIOs and other IT executives. IT executives rely on these conferences to gain insight into how their organizations can use IT to overcome business challenges and improve operational efficiency. Follow news, photos and video coming from Gartner IT Symposium/Xpo on Smarter With Gartner, on Twitter using #GartnerSYM.

Upcoming dates and locations for Gartner IT Symposium/Xpo include:

November 9-12| EMEA| Virtual

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November 23-25| India| Virtual

About Gartner

Gartner, Inc. (NYSE: IT) is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow.

Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and an objective resource for more than 14,000 enterprises in more than 100 countries — across all major functions, in every industry and enterprise size.

To learn more about how we help decision makers fuel the future of business, visit gartner.com.

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