Gartner’s latest forecast predicts that IT spending in Australia will increase by 8.7% to AU$147 billion in 2025. This growth is driven by a combination of factors, including a growing interest in AI, ongoing cyber security needs, and the necessity to update hardware as Windows 10 reaches end-of-service.
Strategic investments in cyber security and AI
In a recent interview with roosho, Andy Rowsell-Jones, Gartner’s distinguished VP analyst, highlighted that many enterprises are investing in AI not just for innovation but also as a defensive strategy against cyber threats.
The report from Gartner revealed that CIOs and IT leaders are prioritizing cyber security and technology risk management, with a significant focus on this area. The Australian government’s push to become a cyber security leader is also contributing to this emphasis.
With the increase in data breaches, organizations are keen to avoid the costs and damage associated with cyber attacks, leading to continued investment in cyber security measures.
Hardware rebound: Devices and infrastructure spending
Another driving force behind IT spending in 2025 is the need to upgrade hardware, specifically due to the introduction of Windows 11. With Windows 10 reaching its end-of-service in 2025, companies that have not refreshed their devices may face security and operational challenges.
While investing in hardware upgrades may not be a preferred choice for tech executives, the looming end-of-service deadline is prompting companies to reassess their IT environments and devise new strategies.
The deepening skills gap in IT
Despite increased IT spending, the lack of skilled professionals is hindering companies from fully realizing their IT goals. As a result, organizations may rely more on third-party services to access the necessary skills for deploying solutions, potentially limiting customization.
According to Rowsell-Jones, many organizations will depend on vendors for products and tools, impacting the level of customization they can achieve.
Consistent growth across sectors
The trends driving IT spending are consistent across various sectors in Australia, affecting organizations of all sizes. While industries like banking have historically invested more in IT, sectors such as construction and retail are also maintaining strong levels of IT spending compared to previous years.
Rowsell-Jones highlighted that even industries with traditionally lower IT budgets, like cement companies, are increasing their IT spending due to the impact of AI and cyber security. On the other hand, sectors like banking and law firms have not significantly increased their IT budgets.
A year of positive momentum
Despite economic challenges, Gartner’s forecast for IT spending indicates a positive outlook for organizations in 2025. However, CIOs and IT decision-makers may still face challenges, as research suggests that only a small portion of IT budgets is allocated to innovation.
With a projected growth of nearly 9% in IT spending, Australian businesses are preparing for a transformative year ahead. The investments made in 2025 will play a crucial role in ensuring organizations remain competitive in the digital landscape.
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