IT spending in Australia is projected to reach AU$147 billion in 2025, marking an 8.7% increase from 2024, according to research firm Gartner, Inc. The largest growth is expected in software spending, with a predicted increase of 13.4% in 2025. Investments in cybersecurity, generative AI (GenAI), and cloud technology are set to play a significant role in this spending surge.

"Investments in cybersecurity, generative AI (GenAI) and cloud will play a major role in driving IT spending in Australia next year," says Andy Rowsell-Jones, Distinguished VP Analyst at Gartner. He further adds, "Cybersecurity looks set to remain at the top of the investment list, as highly publicised data breaches this year keep executives worried about a potential fallout and regulators pushing for improved competence."

Spending on data centre systems by enterprises and service providers in 2025 is forecasted to increase by 11.3% to AU$5.7 billion. IT services, however, will continue to be the largest IT spending category in Australia in 2025, with spending predicted to reach over AU$53.4 billion, a 7.2% increase from 2024.

"With the large number of Australian organisations expected to deploy GenAI within the next year, most are turning to the cloud to support GenAI workloads," notes John-David Lovelock, Distinguished VP Analyst at Gartner. Some organisations are deploying GPU clusters in their data centres, requiring network and storage infrastructure investments.

In addition to these technological investments, Australian organisations are also prioritising digital investments next year on improving operating margins, ensuring compliance, and minimising risks. "Australian organisations are prioritising digital investments next year on improving operating margins, ensuring compliance and minimising risks," Rowsell-Jones adds.

This projected increase in IT spending highlights the growing importance of technology in driving business growth and resilience. As organisations continue to navigate the challenges of the digital age, investments in cybersecurity, GenAI, and cloud technology will likely remain critical to ensuring business continuity and competitive advantage.