Fresh prognostication by Gartner indicates an anticipated 8.7% surge in IT expenditure in Australia to AU$147 billion by 2025. This upsurge is expected to be propelled by a confluence of interest in AI, continual needs regarding cyber defense, and the imperative to upgrade hardware following the retirement of Windows 10, as noted by Gartner experts.
Strategical investments in cybersecurity and AI
In a TechRepublic interview, Andy Rowsell-Jones, Gartner’s esteemed VP analyst, conveyed that while AI investments are frequently perceived as forward-looking initiatives for innovation, many enterprises are actually allocating resources for different motives — including as a precautious measure against cyber perils.
“When conversing with IT leaders, there is undeniably a sentiment of genuine concern that GenAI could disrupt the industry’s economics,” he articulated.
The Gartner report highlighted that CIOs and other IT decision-makers prioritize the management of cybersecurity and other technological risks, with 82% of technology executives deeming it a pivotal focus. The Australian government’s aspiration to stand out in cybersecurity might contribute to these findings.
Furthermore, with incidents of breaches on the rise, numerous organizations strive to evade the escalating costs and damage to reputation associated with cyber assaults.
“Cybersecurity appears to remain atop the investment roster, as greatly publicized data breaches this year have left executives apprehensive about potential repercussions,” he stated.
Rowsell-Jones remarked that companies are engaging in a competitive “race” to outshine their rivals, with investments being less about discovering novel AI innovations and more about embracing proven use cases that have already showcased value in the industry.
SEE: The Importance of Cybersecurity Awareness Training for Your Business (TechRepublic Premium)
Hardware resurgence: Devices and infrastructure spending
Another factor propelling IT expenditure in 2025 is the necessity to renew hardware — particularly owing to the launch of Windows 11. Many devices running Windows 10 will not meet the criteria for an upgrade to Windows 11, as Microsoft’s latest operating system mandates specialized hardware to sustain its integrated AI functions.
Windows 10 reaches its end of service in 2025. Enterprises that have not refreshed their device inventories will encounter significant cybersecurity and operational hurdles. This isn’t an investment that tech executives may willingly embrace, but with the termination of service approaching rapidly, numerous companies ought to commence auditing their environments and formulating a new strategy.
The deepening expertise shortage in IT
As businesses intensify their IT spending, the realization of the complete scope of the CIO’s vision is impeded by the nationwide dearth of skills. Consequently, companies might amplify spending on external services to acquire the requisite expertise for implementing solutions, potentially resulting in relatively restricted customization.
“Majority of organizations will rely on their vendors… which means they will leverage the products and tools utilized by their vendors,” shared Rowsell-Jones.
Consistent upward trajectory across sectors
The forces steering IT expenditure are consistent throughout Australia and are applicable to organizations of all scales. Rowsell-Jones highlighted that while some sectors, like banking, conventionally allocate more to IT, domains such as construction and retail are also maintaining robust spending levels compared to previous years.
“Even cement companies, historically not high IT spenders, are heightening their investments as AI and cybersecurity touch their operations as well,” he elaborated. “Simultaneously, banks and law firms aren’t abruptly doubling their budgets.”
A year of positive momentum
Despite the persisting economic challenges, Gartner’s IT expenditure forecast hints that organizations are not poised for a negative outlook in 2025.
Nonetheless, it might prove to be a demanding year for CIOs and other IT stakeholders. Research from ADAPT suggests that a mere fraction of IT budgets is earmarked for innovation, signifying that, despite budget increments, CIOs are concentrating on addressing the immediate demands of the organization.
“The CIO is left with little choice but to commit significant resources next year,” stated Rowsell-Jones.
With expenditures expected to escalate by nearly 9%, it appears that Australian enterprises are gearing up for a transformative year. The investments made in 2025 will serve to equip organizations adequately for contention in an increasingly digital realm.
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