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Bumper year ahead for NZ IT sector

Gartner says New Zealand spending on technology products and services will grow 7.4 percent this year. The company’s latest forecast says the market will total NZ$15.3 billion in 2022.

New Zealand’s forecast spending growth is ahead of growth in world spending. Gartner says the international market will climb 5.1 percent this year.

The fastest growth in New Zealand will be in data centre systems which Gartner says will grow 16.6 percent in 2021.

Data centre building boom

New Zealand is seeing a burst of investment in local data centres. Earlier this week DCI Data Centres announced plans to further develop its 5 hectare site in North Auckland.

The company says it designed its AKL01 and AKL02 sites for the New Zealand market and local data sovereignty.

Meanwhile, Hawaiki Cable founder Remi Galasso’s Datagrid product is going ahead near Invercargill in the South Island.

Enterprise software

Enterprise software is surging with spending expected to grow 14 percent. It services are forecast to grow seven percent. Devices will be up 6.7 percent.

Communications services is the laggard, as has been the case in recent years. Gartner expects spending to grow one percent. That’s well behind New Zealand’s rate of inflation and can be seen as, in effect, a market contraction.

In recent years Communications Services was the largest sector in New Zealand, but it’s slow growth saw it eclipsed last year by IT Services.

New Zealand IT spending forecast

 2021 Spending2021 Growth (%)2022 Spending2022 Growth (%)2023 Spending2023 Growth (%)
Data Centre Systems66716.67004.97639.0
Enterprise Software3,11114.03,53613.73,98212.6
Devices2,1146.72,3059.02,092-9.3
IT Services4,1767.04,5308.55,01110.6
Communications Services4,1611.34,2031.04,2451.0
Overall IT14,230
7.015,2757.416,0935.4
Gartner figures, January 2022.
All numbers are NZ$ millions

IT services on a roll

Gartner expects IT services to grow 8.5 percent in the coming year to reach NZ$4.5 billion. In 2023 it expects the segment to grow a further 10.6 percent taking it past NZ$5 billion.

IT services includes consulting and managed services. Gartner says consulting will grow eight percent in 2022.

“…staff skills gaps, wage inflation and the war for talent will push CIOs to rely more on consultancies and managed service firms to pursue their digital strategies.”

Gartner forecast total IT spending will grow a further 5.4 percent in 2023 taking the spend past NZ$16 billion.

4 thoughts on “Bumper year ahead for NZ IT sector

  1. @billbennettnz the data center boom surely has a lot to do with the lack of data centers to begin with … the fact that the Govt NZ Covid data is all held in Australia points to a very real problem … add to that the recent Microsoft deal … might be indicative that the country is a long way behind to begin with?

    1. It’s possible. The big cloud companies didn’t take too much notice of New Zealand until the Hawaiki and Tasman Global Access submarine cables were built. Since then there has been more activity.

      In my view our government has been too keen to spend money with overseas cloud companies, there was enough capacity here with Datacom, Catalyst and Spark CCL.

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