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A/NZ ICT Spending Stable Despite COVID-19 Turbulence, Reports IDC

Posted on 3-Sep-2021 10:57 | Filed under: News

A/NZ ICT Spending Stable Despite COVID-19 Turbulence, Reports IDC

In 2020, ICT spending in Australia and New Zealand (A/NZ) experienced stable growth despite the turbulence of the COVID-19 pandemic. Government stimulus initiatives measures and A/NZ businesses prior investment in digital transformation played a key role in mitigating against the worst impact of the pandemic on business investment activity.


While growth rates were modest, some areas of spending grew in tandem with rapid migrations to new business models, hybrid workplaces and online learning.  Despite the pandemic and lockdown activities continuing through 2021, recent IDC surveys have indicated that most A/NZ businesses are continuing to invest in technology with IT Spending levels to be higher in 2021. According to the latest release of Worldwide ICT Spending Guide Industry and Company Size, IDC forecasts A/NZ ICT spending to grow by over 2.1%, to reach USD $84 billion in 2021, and expected to reach USD $93 billion by 2025 with a compounded annual growth (CAGR) of 2.5% forecasted to 2025.


In the 2020 A/NZ IT Services Ecosystem survey, 69% of A/NZ organisations told IDC that the pandemic had accelerated their digital transformation programs, and many agreed this investment played a major role in creating digital resilience.    IDC's 2021 Future Enterprise Resiliency surveys, which track organisations’ journey to recovery, revealed that 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 Mario Allen Clement, Senior Market Analyst for IDC IT Spending Guides, Customer Insights & Analysis. “Digitalisation enables organisations to continue to engage with partners and customers, deliver products and services, and keep innovating, allowing the economy to sustain growth despite the pandemic”, he added.


The banking and government segments contributed the highest (30%) of the overall ICT Spend in 2021, excluding the consumer segment and it is expected to be one of the highest areas of growth in 2021, with a forecast 2.8% growth year over year. ANZ banks continue to commit to investing in digital transformation programs to drive customer engagement and enable more effective innovations in products and services. The continual 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, to grow the digital economy ecosystem.


The large and very large business segment (over 500 employees) will gain a share to account for over 49% of spending by 2025, a 5-year CAGR of 3.7%. This segment is accelerating 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 areas among all Australian and New Zealand businesses in 2021. But as more businesses seek to strengthen their digital resilience investment will target gaps that emerged during the pandemic.


The Worldwide Semiannual ICT Spending Guide Industry and Company Size is IDC's flagship all-in-one data product capturing IT spending across more than 100 technology categories and 53 countries. This IDC Spending Guide will provide a granular view of the market for IT spending from a country, industry, company size, and technology perspective. This comprehensive database delivered via pivot table format or IDC's custom query tool allows the user to easily extract meaningful information about various technology markets and industries by viewing data trends, relationships and making data comparisons across more than 3 million data points.


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