​What are Kiwi businesses spending tech money on?

​What are Kiwi businesses spending tech money on?

In New Zealand, IT spending is forecast to reach almost $11.3 billion, an increase of 1.9 percent from 2015.

In New Zealand, IT spending is forecast to reach almost $11.3 billion, an increase of 1.9 percent from 2015.

However, when reported in $US there was a decline due to currency fluctuations.

According to research analyst firm Gartner, communications services is the biggest spending category in New Zealand, while software is the fastest growing segment.

Meanwhile, spending on devices, such as mobile phones, tablets, PCs and printers, is forecast to fall.

New Zealand numbers are slightly ahead of worldwide IT spending, which is forecast to be flat in 2016, totalling $US3.41 trillion - up from last quarter's forecast of negative 0.5 percent growth due to currency fluctuations.

“The current Gartner Worldwide IT Spending Forecast assumes that the U.K. would not exit the European Union,” Gartner Research Vice-President, John-David Lovelock, said.

“With the U.K.'s exit, there will likely be an erosion in business confidence and price increases which will impact U.K., Western Europe and worldwide IT spending.”

Lovelock said that while the U.K. has embarked on a process to change, that change is yet to be defined.

“The "leave" vote will quickly affect IT spending in the U.K. and in Europe while other changes will take longer. Staff may be the largest immediate issue,” he explained.

“The long-term uncertainty in work status will make the U.K. less attractive to new foreign workers. Retaining current non-U.K. staff and having less access to qualified new hires from abroad will impair U.K. IT Departments.”

New options

For Lovelock, 2016 marked the start of an amazing dichotomy.

“The pace of change in IT will never again be as slow as it is now, but global IT spending growth is best described as lacklustre,” he said.

“2016 is the year that business focus turns to digital business, the Internet of Things and even algorithmic business.

“To fund these new initiatives, many businesses are turning to cost optimisation efforts focusing around the new digital alternatives (for example, SaaS instead of software licenses, voice over LTE [VoLTE] instead of cellular and digital personal assistants instead of people) to save money, simplify operations and speed time to value.

“It is precisely this new breadth of alternatives to traditional IT that will fundamentally reshape what is bought, who buys it and how much will be spent."

Lovelock said datacentre systems' spending is projected to reach $US174 billion in 2016, a two percent increase from 2015, with the market driven by strong growth in the server markets in Greater China and Western Europe, and a strong refresh cycle in the North American enterprise network equipment market.

Meanwhile, global enterprise software spending is on pace to total $US332 billion, a 5.8 percent increase from 2015. At a segment level, the fastest-growing market continues to be customer relationship management software.

In addition, global devices spending is projected to total $US627 billion by the end of 2016.

“The lacklustre economic issues surrounding Russia, Japan and Brazil will hold back demand and worldwide PC recovery in 2016,” Lovelock explained.

“Additionally, Windows 10 upgrades have further led to PC buying being delayed - consumers are willing to use older PCs longer, once they are upgraded to Windows 10.”

Looking ahead, Lovelock said spending in the IT services market is expected to increase 3.7 percent, totalling $US898 billion.

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