NZ tech spending to grow by 5.7% to $13.8B

NZ tech spending to grow by 5.7% to $13.8B

Device market growth rate doubles.

Credit: Dreamstime

New Zealand’s IT and technology market is set to grow by 5.7 per cent in 2021, hitting a total of $13.2 billion. 

The growth rate marks a sharp rise on that of 2020, whereby spending only grew by 1.1 per cent, according to Gartner figures. The growth rate is then expected to flatline at 5.7 per cent in 2022. 

Communication services and IT services will collectively maintain the bulk of the market at $4.1 billion each, growing at a rate of 1.2 per cent and 5.6 per cent, respectively. 

The software segment is expected to follow behind in the spending pie, totalling $3 billion. However, its growth rate for 2021 is expected to contract from last year’s 14.3 per cent to 12.5 per cent. 

The device market growth rate is likely to double from 4 per cent in 2020 to 8.1 per cent in 2021, with its total spending standing at $2.1 billion at the end of this year. 

Meanwhile, the data centre market is projected to shrink by 5 per cent to $336 million, a sharp decline from its 2.5 per cent growth rate in 2020.  

New Zealand’s IT spending growth rate fell behind the global average, which Gartner has projected to total US$4.2 trillion in 2021, an increase of 8.6 per cent from 2020.  

 According to the global report, IT spending is accelerating ahead of revenue expectations, with boards and CEOs more willing to invest in technology that has a “clear tie to business outcomes, and less so for everything else”.   

“Technology spending is entering a new build budget phase,” said John-David Lovelock, distinguished research vice president at Gartner.   

“CIOs are looking for partners who can think past the digital sprints of 2020 and be more intentional in their digital transformation efforts in 2021. This means building technologies and services that don’t yet exist, and further differentiating their organisation in an already crowded market.”  

The IT services segment globally is forecast to total US$1.2 trillion in 2021, an increase of 9.8 per cent from 2020.  

This, according to Gartner, is primarily due to a boost in infrastructure-as-a-service spending that supports mission-critical workloads and avoids high on-premises costs.  

“Digital transformation can no longer be purchased overnight, and global IT spending projections reflect that,” added Lovelock. “As the world continues to open back up, enterprises will invest in tools that support innovation, anywhere operations and employee productivity and trust.” 

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