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ANZ IT spending higher than ever, despite disruptive lockdowns - IDC report

By Ryan Morris-Reade, 02 Sep 2021

Despite the pandemic and lockdown activities continuing through 2021, recent IDC surveys indicate most A/NZ businesses continue to invest in technology, with IT spending levels set to be higher in 2021 than ever before. 

According to the latest release of the Worldwide ICT Spending Guide Industry and Company Size, IDC forecasts Australia and New Zealand (A/NZ) ICT spending to grow by over 2.1%, to reach USD$84 billion in 2021, and is expected to reach USD$93 billion by 2025 with a compounded annual growth of 2.5% forecast to 2025.

In the 2020 A/NZ IT Services Ecosystem survey, 69% of A/NZ organisations told IDC the pandemic had accelerated their digital transformation programs. Many agreed this investment played a significant role in creating digital resilience. 

IDC's 2021 Future Enterprise Resiliency surveys, which tracks an organisation's journey to recovery, revealed more than 80% of A/NZ organisations were either entering the "Return to Growth and Transformation stage by early 2021", indicating a willingness to invest aggressively, or in "The Next Normal", where their business has stabilised. This is the highest rate measured across the Asia Pacific region, with only China showing higher levels of positive sentiment.

"Australia and New Zealand were early entrants to the digital transformation journey, which has allowed them to quickly pivot their operations as the pandemic hit," says IDC IT senior market analyst, spending guides, customer insights and analysis, Mario Allen Clement.

"Digitalisation enables organisations to continue to engage with partners and customers, deliver products and services, and continue innovating, allowing the economy to sustain growth despite the pandemic."

According to the survey, the banking and government industries contributed the highest (30%) of the overall ICT spend in 2021, excluding the consumer segment, and it's expected to be one of the highest areas of growth in 2021, with a forecast of 2.8% growth year over year. 

AN/Z banks continue to invest in digital transformation programs to drive customer engagement and enable more effective innovations in products and services. The steady adoption of cloud-based infrastructure and the modernisation of application platforms are two focus areas in the coming year. 

Governments across the region have continued to increase tech budgets to enhance crisis response capability, improve operational efficiency, provide effective services to citizens as the pandemic hit and, going forward, grow the digital economy ecosystem.

IDC says the large and very large business segment (over 500 employees) will gain a share to account for over 49% of spending by 2025, a five-year CAGR of 3.7%. This segment accelerates investment in digital capabilities to drive business results, create digital resiliency and gain a competitive advantage through emerging technology. 

Improving customer experience and operational efficiency are the two universal areas of focus among all Australian and New Zealand businesses in 2021. But as more companies seek to strengthen their digital resilience, investment will target gaps that emerged during the pandemic.

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