2 min read

Bumper year ahead for NZ IT sector

Gartner says New Zealand spending on technology products and services will grow 7.4 per cent 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 per cent this year.

The fastest growth in New Zealand will be in data centre systems which Gartner says will grow 16.6 per cent 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 per cent. It services are forecast to grow seven per cent. Devices will be up 6.7 per cent.

Communications services is the laggard, as has been the case in recent years. Gartner expects spending to grow one per cent. 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.

2021 Spending 2021 Growth (%) 2022 Spending 2022 Growth (%) 2023 Spending 2023 Growth (%)
Overall IT 14,230 7.0 15,275 7.4 16,093 5.4
Data Centre Systems 667 16.6 700 4.9 763 9.0
Enterprise Software 3,111 14.0 3,536 13.7 3,982 12.6
Devices 2,114 6.7 2,305 9.0 2,092 -9.3
IT Services 4,176 7.0 4,530 8.5 5,011 10.6
Communications Services 4,161 1.3 4,203 1.0 4,245 1.0

IT services on a roll

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

IT services includes consulting and managed services. Gartner says consulting will grow eight per cent 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 per cent in 2023 taking the spend past NZ$16 billion.