Australian IT spending is set to pass $192 billion in 2027. IT services get 11c of every new dollar.
Gartner’s forecast has software and cloud growing fast, while IT services grow 3.4%. I’d expect more firms to be chasing a slower-growing pool of work.
SourceGartner · 16 Sep 2026 · forecastShane Kennedy · · 4 min read
The short version
- Gartner forecasts Australian IT spending of more than A$192.2 billion in 2027, up 8.7% on 2026.
- Software grows 13.3% and cloud infrastructure 22.1%. IT services grow 3.4%, and get A$1.76 billion of the extra A$15.4 billion.
- For services firms, I’d plan for 2027 as a fight for share, where the names buyers already know have the edge.
What Gartner forecast
Gartner released its forecast at its IT Symposium on the Gold Coast on 16 September. It expects IT spending in Australia to pass A$192.2 billion in 2027, up 8.7% on this year’s A$176.9 billion. That’s an extra A$15.4 billion.
Gartner’s Neil Osmond says AI is reshaping where that money goes. In his view, business leaders are “moving beyond isolated use cases”, and they’re investing in the infrastructure and software they’ll need to embed AI across the business.
Where the growth is
Every segment grows. Cloud infrastructure, which Gartner calls infrastructure as a service, grows fastest, up 22.1% to A$9.1 billion, driven by AI-optimised capacity that Gartner expects to grow 58.5%. Data centre systems grow 16.6% and software 13.3%. Software’s still the biggest category, at more than A$68 billion.
IT services grow 3.4%. That’s the slowest on the table, level with communications services.
Where the extra $15.4 billion goes
Split the extra A$15.4 billion by segment and the gap gets clearer. Software takes A$8.0 billion of it. That’s about half. IT services get A$1.76 billion, about 11 cents in every new dollar, even though it’s the second-biggest category.
The shift behind it
In Osmond’s view, AI investment is driving “a long-term reallocation of technology spending”. Gartner’s John-David Lovelock puts most of software’s growth down to businesses adding GenAI models and agentic AI to the cloud software they already run.
What it means for services firms
Services spending still grows. A$1.76 billion of new spending isn’t nothing. But there’ll be more firms chasing a slower-growing pool of work. When buyers have plenty of choice, they tend to shortlist the names they recognise.
Let’s say a mid-market business is choosing an implementation partner next year. They’ll ask around, look online and put three or four names on a list, and a firm that isn’t on it won’t get a call, let alone a share of the A$1.76 billion.
Shane’s take
Plan for 2027 as
If you run a services firm, I’d plan for 2027 as a fight for share. My bet’s that the firms buyers already know will take most of it.
Sources and notes
- Gartner’s figures are a forecast, in Australian dollars. Its “Services” segment covers IT services.
- The split of the extra A$15.4 billion, and the 11 cents, are worked out from Gartner’s Table 1 (2027 spending minus 2026, by segment).
- “What it means for services firms” and “Shane’s take”, including the shortlist example, are my opinion, not Gartner’s.