IT spending tipped for slight increase in 2012

Business spending on information technology will rise by less than 2% this year, according to Gartner, but SMEs will continue to lead the way in newer areas such as cloud computing.

Gartner predicts Australian enterprise spending on IT will rise by a modest 1.9% to $61.9 billion this year, after declining in the previous two years from a high of $64.3 billion in 2009.

Derry Finkeldey, a principal research analyst at Gartner, says while Australia is a mature market, there is a lot of caution at the moment amid global economic uncertainty.

“Executives were only expecting an increase in their IT budgets of about 0.8%. Generally, people didn’t expect their IT budgets to rise in 2012,” Finkeldey says.

“Often, the outlook in Australia is quite cautious but spending ends up being a little bit higher. We think [2012] is going to be more inhibited compared to other years. However, it will still grow.”

“A lot of the spending is for projects that have already been committed to – thinks like enterprise applications that are already underway.”

“The other thing high on the agenda is business continuity, mainly in response to the major disasters [of 2011], both from an IT side but also the business processes side.”

“What’s happened with the floods and bushfires has had a tremendous impact, and it’s impacting every level of the business.”

Mobility will also be a major focus in 2012.

According to Kevin McIsaac, an analyst at Intelligent Business Research Services, the rise of smartphones and tablet computers will affect the number of employees who want to use them.

“People have these mobile devices and want to use them but they’re not looking for the full desktop experience,” McIsaac told The Australian Financial Review.

“I see a lot of people with them, and they are changing the way they work, but at the same time we still use the old desktop.”

McIsaac believes business intelligence will be another major focus area this year because the technology has become “incredibly cheap”.

“We have broken through a barrier but the question becomes how organisations derive value from it,” he said.

Finkeldey agrees business intelligence is an area organisations will continue to heavily invest in, alonside CRM.

“Small organisations always have to outsource – that’s part of their culture. They can’t do it all [themselves]. But that group will be leading the shift to things like cloud,” Finkeldey says.

“Certainly, we’ve seen a lot of businesses form around the cloud, particularly around new competitors to MYOB. That’s big for the SMB sector – a lot of cloud-based new businesses.”