Gartner forecasts strong growth for NZ ICT, led by enterprise software and devices

Communications services providers likely to see very subdued growth.

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New Zealand technology and services markets remain vibrant according to market analyst Gartner Group, with 7.4 per cent year-on-year growth expected in 2022.

Sales of technology products and services in New Zealand are forecast to total $15.3B in the coming year. In comparison, worldwide IT spending is projected to increase 5.1 per cent from 2021 to reach US$4.5 trillion.

Despite the potential impacts of the Omicron COVID-19 variant, economic recovery with high expectations for digital market prosperity will continue to boost technology investments, Gartner said today.

“2022 is the year that the future returns for the CIO,” said John-David Lovelock, distinguished research vice president at Gartner.

“They are now in a position to move beyond the critical, short term projects over the past two years and focus on the long term."

At the same time, staff skills gaps, wage inflation and the war for talent will push CIOs to rely more on consultancies and managed service firms to pursue their digital strategies.

Gartner forecasts that the largest category of IT spending in New Zealand, the IT services segment, is expected to grow 8.5 per cent from 2021 to more than $4.5B. Within that category, spending on business and technology consulting, is expected to grow by 8 per cent to $764 million.

Organisations will increase their reliance on external consultants as the greater urgency and accelerated pace of change widen the gap between organisations’ digital business ambitions and their internal resources and capabilities, Gartner said.

“This will be particularly poignant with cloud as it serves as a key element in achieving digital ambitions and supporting hybrid work,” said Lovelock. “Gartner expects the vast majority of large organisations to use external consultants to develop their cloud strategy over the next few years.”

The services segment is likely to be eclipsed, however, by growth in enterprise software sales, which are forecast to rise 13.7 per cent year on year, and devices, up 9 per cent.

New Zealand ICT market growth is likely to be well ahead of global averages in 2022.

The trailing segments in 2022 are forecast to be datacentre systems, with sales expected to increase 4.6 per cent, and communications services, which could expect growth of just 1 per cent.

Gartner’s IT spending forecast methodology relies on analysis of sales by thousands of vendors across the range of IT products and services. The company also uses primary research techniques, complemented by secondary research sources, to build a database of market size data on which to base its forecast.