Gartner: NZ IT spending set to smash $11 billion mark

With the global economy showing signs of a gradual recovery, New Zealand’s total IT spending is forecast to grow 1.7 percent to reach NZ$11.1 billion in 2014.

On a global front, IT spending is on pace to total $3.8 trillion in 2014, a 3.2 percent increase from 2013 spending, according to the latest forecast by Gartner.

"Globally, businesses are shaking off their malaise and returning to spending on IT to support the growth of their business," says Richard Gordon, managing vice president, Gartner.

"Consumers will be purchasing many new devices in 2014; however, there is a greater substitution toward lower cost and more basic devices than we have seen in prior years."

The devices market (including PCs, ultramobiles, mobile phones and tablets) is forecast to return to growth in 2014, with worldwide spending of $689 billion, a 4.4 percent increase from 2013.

However, in top-line spending, a shift in the product mix continues to be seen in the marketplace. Demand for highly priced premium phones is slowing, with buyers in mature countries preferring midtier premium phones, while those in emerging countries favor low-end Android basic phones.

The number of traditional PC users is contracting to a set of fewer, albeit more engaged, users. In general, consumers are opting to buy premium ultramobiles as notebook replacements and purchasing tablets as additional devices.

As market power shifts to the buyer, and key product innovations become ubiquitous, product pricing is becoming the primary differentiator.

Data Center systems spending is projected to reach $143 billion in 2014, a 2.3 percent increase from 2013.

In terms of enterprise network equipment trends, cloud and mobility are the biggest demand drivers. Virtualisation and cloud adoption are generating significant market traction for data center Ethernet switches, and the proliferation of mobile endpoints is continuing to drive significant demand for the wireless LAN equipment market.

In the enterprise software market, spending is on pace to total $320 billion, a 6.9 percent increase from 2013. The enterprise software market is the fastest-growing segment in 2014.

"The Nexus of Forces (the convergence of social, mobile, cloud and information) continues to drive growth across key major software markets, such as CRM, database management systems (DBMSs), data integration tools and data quality tools," Gordon adds.

"In fact, organisational adoption of data management technologies to support the Nexus will cause spending on DBMSs to surpass operating systems, making the former the largest enterprise software market in 2014."

IT services is forecast to total $964 billion in 2014, up 4.6 percent from 2013. IT services buyers are shifting spending from consulting (planning projects) to implementation (doing projects), and Gartner analysts expect steady growth in the IT services market as the economic outlook, and along with it investment sentiment, improves.

Asia Pacific...

According to Gartner findings, in the Asia Pacific region, IT spending is forecast to reach US$759 billion in 2014, up 4.4 percent from 2013, which is slightly lower than 2013 growth of 4.7 percent.

In Australia, total IT spending is forecast to reach A$76.5 billion, an increase of 2.5 percent over 2013.