Gartner forecasts strong growth in New Zealand ICT spending

Gartner forecasts strong growth in New Zealand ICT spending

Despite cloud and services boom, enterprise software sales are expected to star.

John-David Lovelock (Gartner)

John-David Lovelock (Gartner)

Credit: AWS

Market analyst firm Gartner is projecting New Zealand ICT product and service spending to total $14.7 billion in 2022, an increase of 6.7 per cent.

New Zealand businesses were making a big shift from IT ownership to services, investing in cloud over on-premises technology, said John-David Lovelock, distinguished research vice president at Gartner. 

“Datacentres are not going away anytime soon, but they will run on older equipment while workloads are moved to the cloud," he said. "The goal is flexibility, not cost savings.”

That could be bad news for incumbent suppliers of infrastructure-as-a-service, such as Spark-owned CCL and Datacom. As hyperscale cloud providers announced plans to establish local cloud regions, in New Zealand, both are pushing their abilities to service hybrid cloud demand. 

The largest IT market segment in New Zealand is IT services, according to Gartner. This was forecast to grow 6 per cent, to almost $4.4 billion in 2022. This included managed services, consulting, and cloud infrastructure-as-a-service (IaaS), which totalled $450 million in 2020 and is forecast to reach more than $1 billion in 2023.

“With a tight labour market and ongoing border closures, organisations are investing more in consultants, which they access remotely, as they try to build out what their business will look like in the future,” Lovelock said.

Credit: Gartner Group

The fastest growing area of IT spending remained enterprise software, forecast to grow 10.8 per cent to almost $3.5 billion in 2022. Both vertical-specific and general enterprise application software is forecast to grow strongly in 2022 as the economy rebounds post-pandemic.

Spending on devices, primarily PCs and tablets, grew 6.1 per cent in 2021 as remote work and learning took hold.  The total installed base of PCs in New Zealand grew by 30 per cent in 2020 and a further 18 per cent growth is forecast for this year.

A further lift is expected in 2022 as enterprises upgraded devices and invested in multiple devices to operate in remote or hybrid work settings. 

“What changed in 2020 and 2021 was not really the technology itself, but people’s willingness and eagerness to adopt it and use it in different ways,” said Lovelock. “In 2022, CIOs need to reconfigure how work is done by embracing business composability and the technologies that support it.”

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Tags Gartnerservicesmarket researchenterprise softwareNew ZealandCloud



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