Australia’s ICT spending set to decline by 5.9% in 2020 due to COVID-19


Australia’s ICT spending is expected to decline by 5.9% in 2020 as opposed to the 9.4% growth forecasted before the COVID-19 outbreak, says GlobalData.

An analysis of GlobalData’s Market Opportunity Forecasts Model reveals that spending on hardware is expected to fall by 6.8% in 2020 as against the growth of 11.5% in 2019 and the projected growth of 8.6% before the COVID-19 outbreak.

On the other hand, the public cloud market, which includes SaaS, PaaS and SaaS, is expected to grow by 3.1% over 2019. Likewise, the market for enterprise social networking and collaboration platforms is set to increase by 29.4% for 2020, owing to the need for increased collaboration for the remote workforce amidst the pandemic.

Kaipa Sai Shashank, Senior Technology Analyst and GlobalData comments: “Enterprises are refraining from non-critical hardware purchases, and these longer device refresh cycles will strongly impact spending on hardware in the near future. Also, the current trend of remote working is shifting organizations’ internal ICT infrastructure towards cloud-based applications and storage options that offer strong business continuity from an operational perspective.”

The software segment will remain significantly affected due to the business impact across several verticals – notably travel and leisure, and the transportation and logistics sectors.

Shashank explains: “The uncertain economic environment has adversely affected the enterprise software spending on licenses and the roll-out of new applications in 2020 across all verticals.”

Looking at the sector-wise impact of the COVID-19 pandemic, the travel and leisure sector will be the most impacted, with ICT spending in the sector projected to fall by 19.4% in 2020 when compared to 2019. Similarly, ICT spending in the transport and logistics, consumer goods and manufacturing sectors will also witness significant declines.

Shashank concludes: “There are however a few positive trends around the penetration of mobility and cloud technologies for small and medium enterprises in particular. Overall, the market remains quite uncertain, and the recovery path of the market will hinge on the increased spending on digital transformation technologies from the Australian enterprises.”