Gartner Forecasts IT Spending in Australia to Grow 8.7% 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 (Table 1).

Table 1. Australian IT Spending Forecast (Millions of AU Dollars)

^{Source: Gartner (September 2024)}

“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.