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Australian IT spending to grow 2.3 per cent in 2014: Gartner

Australian IT spending to grow 2.3 per cent in 2014: Gartner

The Internet of Things will be a big driver of revenue in the digital economy, which will also see more investment in IT

Many Australian companies could increase their IT budgets next year with analyst firm Gartner forecasting total tech spending to increase by 2.3 per cent year-on-year.

Gartner expects spending to grow from $75.5 billion in 2013 to almost $77.2 billion in 2014.

The modest increase is mostly due to the decline in the Australian dollar throughout 2013 allowing for more buying power, according to Gartner principle analyst Derry Finkeldey.

“It will be interesting to see the impact on confidence that a traditionally more ‘business friendly’ government has,” she said.

The biggest IT spend will be in services at $29.7 billion, followed by telecommunications at $26.9 billion; PCs, printers, tablets and mobile phones at $10.4; software at $7.6 billion; and data centre systems at $2.5 billion. Software is the fastest growing category in IT spending, increasing 7.8 per cent into 2014.

“In software, the highest growth categories are web conferencing, collaboration/social software suites at 17.21 per cent, followed by CRM at 14.68 per cent – but CRM is the much bigger market in dollar terms. Most software categories are showing robust growth,” said Finkeldey.

Spending on mobile devices, however, is forecast to drop by more than $4 billion this year to $3.7 billion in 2014.

“The fall in mobile device spending is largely driven by prices for smart phones coming down, uptake of cheaper alternatives to the ubiquitous iPhone in the Australian market – which is already happening everywhere else, and also to some degree BYOD – less duplication by enterprises for devices,” said Finkeldey.

In the whole of the Asia Pacific region, IT spending is forecast to grow from US$727 billion in 2013 to US$767 billion in 2014. In 2017, that figure will continue to grow to US$933 billion.

The Internet of Things will be a big driver of revenue in the digital economy, which will also see more investment in IT. In 2020, Gartner predicts there will be up to 30 billion devices connected with unique IP addresses to the Internet, up from 2.5 billion in 2009.

“In the technology and telecom sectors, revenue associated with the Internet of Things will exceed US$309 billion per year by 2020,” said Peter Sondergaard, senior vice president and global head of research at Gartner.

Gartner also forecasts by 2017, nearly half of first-time computer purchases will be a tablet, making it a “destination platform for all applications”.

Follow Rebecca Merrett on Twitter: @Rebecca_Merrett

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