Australian IT spending to buck global trend says Gartner

Value of global IT spending to drop thanks to a strong US dollar says analyst firm

Although the value of global IT spending is expected is predicted to drop by 1.3 per cent in 2015, spending in Australia will grow by 4.2 per cent compared to last year, according to the latest figures from Gartner.

The analyst firm is forecasting that Australian spending on IT products and services will hit A$78.7 billion in 2015.

The biggest year-on-year increase in percentage terms is for software, including applications and 'infrastructure software' (a Gartner category that includes application development and integration software, information management software, storage management software, and IT ops management and security software).

The largest portion of Australian IT spending in 2015 is forecast to be IT services at just under $29 billion, followed by telecommunications services at just under $27 billion.

Gartner expects worldwide IT spending to hit US$3.66 trillion in 2015, down from US$3.71 trillion, with the analyst firm chalking the decrease up mainly to the rise in value of the US dollar.

"[T]his is not a crash, even if it looks like one," said Gartner research vice-president John-David Lovelock.

"The recent rapid rise in the value of the US dollar against most currencies has put a currency shock into the global IT market. Taking out the impact of exchange rate movements, the corresponding constant-currency growth figure is 3.1 percent, only off 0.6 percent from last quarter's update. Such are the illusions that large swings in the value of the dollar versus other currencies can create.

"However, this illusion masks a bigger issue that has real implications. Every product or service that has a US dollar-based component must have those costs covered at the lower exchange rate. The simple implication is that there will be price rises. However, there are many other market forces at work — protecting US dollar profits will require a nuanced and multifaceted approach involving pricing, partners and product management."

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