IT Investment Trends for 2022

Where are your competitors investing, and where should you be focusing your budget?

Technology can make or break the modern business. With budgets shrinking, increasingly competitive markets and customer demands growing, knowing what technology you should invest in – and when – is a challenge.

To help guide your IT and technology planning, we took a moment to look at IT spending trends for 2022 – helping you define where you should be investing to stay ahead.

What tech and IT did Australian businesses invest in during 2021?

$102 billion. That’s how much Gartner forecast Australia to spend on IT in 2021.

What made up the most of that $102 billion? IT Services. With consulting services, in particular, in high demand as leaner in-house resources and the need for new – fast – technology adoption drove a need for IT specialists.

During Gartner’s IT Symposium late last year, Research Vice President, John-David Lovelock, summed up 2021 nicely:

“Australia’s IT spending is showing its strongest growth in a decade, and we expect growth rates of around 5 to 6% to continue for the next few years.”

Not a great surprise to anyone! The great tech scramble of 2021 – which saw every business pivot overnight to hybrid and remote working – resulted in a 5.9% increase from 2020. And this is a trending increase for 2022.

The biggest area of growth? **drum roll **

Again, no surprise: Device demand. This increased by 9% over the previous year. With many businesses upgrading to manage the increasing demand for faster, smoother, more secure tech, Gartner is predicting this will only continue.

“We saw both these trends at CodeBlue in 2021, with a surge in specialist and device demands as companies pivoted to remote or hybrid working and upgraded their networks to support this move. Being a full-service provider, we helped so many of our clients almost reset how they work overnight. And having both procurement and specialist services in our team – plus access to our large partner network – we could do so quickly. Now, it’s about assessing what was set-up quickly in 2021 and ensuring the equipment, infrastructure and services can keep up with demand and support company objectives in 2022.” – James Hanna, Chief Revenue Officer.

What’s the outlook for 2022?

IT spending isn’t set to stop in 2022. In fact, it’s forecast to increase by 5.1% worldwide.

Worldwide IT spending

	2021 Spending (Millions, USD)	2021 Growth (%)	2022 Spending (Millions, USD)	2022 Growth (%)	2023 Spending (Millions, USD)	2023 Growth (%)
Data Center Systems	216,337	11.4	226,475	4.7	237,021	4.7
Enterprise Software	604,946	14.4	671,732	11.0	751,937	11.9
Devices	787,417	13.0	813,699	3.3	804,253	-1.2
IT Services	1,186,103	10.7	1,279,737	7.9	1,391,742	8.8
Communications Services	1,444,324	3.4	1,462,712	1.3	1,494,167	2.2

Source: Gartner, January 2022

When looking at Australia, Gartner forecasts IT investment in cloud computing, cloud strategy and ‘as a service’ subscriptions will continue to dominate digital transformation efforts. Especially spending on enterprise software and data centre systems.

At the other end of the supply chain, managed IT services including communications services and device procurement are set to grow to almost 57% of Gartner’s IT spending forecast in 2022.

Australian IT spending (Millions, AUD)

	2020 Spending (Millions, AUD)	2020 Growth (%)	2021 Spending (Millions, AUD)	2021 Growth (%)	2022 Spending (Millions, AUD)	2022 Growth (%)
Data Center Systems	2,719	-8.1	2,736	0.6	2,838	3.7
Enterprise Software	20,561	13.7	23,281	13.2	26,591	14.2
Devices	14,577	3.3	15,890	9.0	16,618	4.6
IT Services	35,234	2.3	36,966	4.9	39,214	6.1
Communications Services	23,712	-2.3	23,623	-0.4	23,853	0.1
Overall IT	96,803	3.1	102,496	5.9	109,113	6.5

Source: Gartner, October 2021

Let’s break down Gartner’s predicted trends for 2022

IT services

With almost 36% of Gartner’s projected spending for 2022 going to IT services, it seems clear that businesses are looking for ways to mitigate staff shortages, particularly with specialist IT personnel.

IT budgets are smaller, so it makes sense to pay for only what you need (SaaS), and have enterprise-level expertise where it counts most.

As David Lane – our General Manager and CEO puts it:

“To say ‘you’re a digital business or you’re dead’ is not an overstatement. This post-pandemic environment demands digitalisation. It has resulted in digital adoption accelerating by 3 – 5 years.”

Data centre systems

Representing also 10% of 2022 spending, we see this trend as being all about the cloud as companies transform their IT environments and review their data centre needs.

“Many businesses had to move fast in 2021, and now they need to pause and review how their data is managed, secured and accessed. Even more so with more companies permanently adopting hybrid and remote ways of working. It’s now about understanding what that infrastructure needs to be to support how your team works and what your customer needs.” – Vipin Hooda, Principal Solutions Consultant.

Enterprise software

Gartner expects spending on enterprise software to grow from $23B to $26B in 2022.

We see this trend as a direct result of many companies now assessing their technology needs, especially after their (most likely) panicked implementation during 2021 when COVID first hit.

“Now, it’s about assessing what technology you have, what’s not working, what you need to support your strategy, and setting things up right – and securely – to support growth.” – Service Delivery Manager Gary Marshall.

To ensure you have the right technology in place, ask yourself:

Is our current enterprise software supporting our future strategy and business goals?
Is it creating a harmonious IT ecosystem or is multi-solution usage creating user or customer confusion?
Do we have the right mix of storage, data processing and applications?

Enterprise software solutions are becoming more affordable and interconnected. Every investment must offer value for money and clear competitive advantage.

Devices

Growth on device spending is set to grow at a slower rate in 2022 according to Gartner, although they predict this segment will continue as the largest part of the IT spend in Australia. Businesses demand reliability and scalability, so devices that have the capacity for expansion and reliable remote deployment (particularly in harsh industrial environments) are particularly valuable.

If your business invested in 2020 hybrid working devices, now may be a good time to review the technology’s fit:

Are team members using company devices for personal use? Does this introduce security issues?
Do devices align with 2022 applications and connectivity demands?
Do devices deliver customer experience that results in repeat business?

Communications Services

Gartner predicts 2022 spending in this market segment will reach over $23B – a healthy 22% of the total Australian IT spend.

Working from anywhere, anytime with any device is our ubiquitous normal now. And seamless, flexible connectivity is the glue that holds working environments together. As part of our managed services suite we are continually realigning communication technologies for best fit for our clients.

What does this mean for my business?

It’s nice to know about trends, but how does this help you maintain your competitive edge today?

Understanding trends in business IT spending gives you the insights you need to make the most of your IT budget in 2022 and beyond.

Every business is at a different developmental stage, but technology trends should be considered in the light of your business’s needs for:

a distributed workforce
your hardware architecture’ adaptability to new rollouts in wireless networks and cloud services
customer expectations and experience
employee productivity and retention

Your technology stack can be a major driver of revenue and business value. So, knowing how to use your IT budget strategically, and with a forward focus, is invaluable.

So, what next?

Plan a conversation soon with your Managed Services provider to define a Technology Plan to support your strategic direction and business goals. This ensures you have the right tech in place to grow from and get where you need to go.

“Maximising value from your technology stack is a big conversation, and that can be daunting. But it’s more important than ever to close any technology gaps and make your IT budget work strategically, before it’s too late. While no one has a crystal ball, every business owner needs to keep an eye on trending developments in IT, so you can recognise how to leverage technology to best advantage.” – David Lane, General Manager and CEO.