Abstract, Jackson Pollock

Gartner says NZ IT spending will reach NZ$11.4 billion in 2017. That’s up 2.3 percent on last year.

This is less than the expected 2.7 percent rise in global IT spending.

The reason for New Zealand’s underperformance is that nation’s biggest IT spending category is fixed and mobile communications services. It accounts for almost 40 percent of all NZ IT spending.

Gartner says growth in this sector is likely to be flat over the next two years.

In 2016 we spent NZ$4.36 billion on fixed and mobile communications services. Gartner’s projection puts 2017 spending at NZ$4.38 billion. That’s a rise of about 0.6 percent. The estimate for 2018 is NZ$4.43 billion.

Meanwhile spending on software will rise from NZ$1.4 billion last year to NZ$1.5 billion in 2017 and will reach almost NZ$1.7 billion in 2018.

Segment2016 YR2017 YR2018 YR
Devices    1,541    1,572    1,556
Data Center Systems        400        402        398
Software    1,421    1,541    1,674
IT Services    3,442    3,518    3,599
Communications Services    4,355    4,383    4,432
Total  11,159  11,417  11,659
Gartner – all numbers in thousands of NZ dollars

Australia’s largest sector is IT services. Gartner says software will be the fastest growing sector in 2017 for both New Zealand and Australia.

Global spending is set to total US$3.5 trillion in 2017. Gartner says the year was set to see a rebound for the industry. It originally forecast 3 percent growth. However political uncertainty means the analyst company has dialled back its optimism.

Gartner research vice president John-David Lovelock says the uncertainty means there’s a wait-and-see mood with many enterprises forestalling IT investments.

Cloud, blockchain, AI all trending

He identifies the big trends as cloud, blockchain, digital business and artificial intelligence.

The analyst expects worldwide spending on devices, PCs, tablets and phones to stay flat at US$589 billion.

Gartner says a PC replacement cycle, strong pricing and functionality will help drive growth in 2018.

We’ve seen similar optimistic projections before now. Some from Gartner. It’s hard to know where that replacement cycle will come from. Technology sales have been falling for years now. Even if it does kick-in, the industry needs more than replacements to see a fresh wave of growth.

Things are strong in the IT services market. Gartner expects the global market to grow 4.2 percent in 2017. It says this will come from investments in digital business, intelligent automation and services optimisation. The report goes on to warn buyers remain cautious.

One thought on “NZ IT spending to climb 2.3 percent in 2017

Comments are closed.

%d bloggers like this: