Gartner Forecasts IT Spending in Australia to Exceed $172 Billion in 2026

“Despite an uncertain environment, investments in AI, cybersecurity and cloud will continue to drive new IT spending in Australia next year,” said Andy Rowsell-Jones, Distinguished VP Analyst at Gartner. “With AI firmly in the spotlight, Australian organizations are widening their focus from generative AI (GenAI) towards investments in other related AI technologies for real-time intelligence and operational scalability, helping ensure long-term success.”

Gartner analysts are discussing the latest CIO investment trends this week at Gartner IT Symposium/Xpo, taking place on the Gold Coast until Wednesday.

Investments in AI-related infrastructure will continue to surge in 2026. Gartner forecasts spending on data center systems in Australia by enterprises and service providers will see the largest growth, increasing 22.5% to A$10.1 billion. Within this category, server spending will increase 30% to reach A$7.7 billion in 2026, driven by investments in AI-optimized servers to support GenAI adoption (Table 1).

Table 1. Australian IT Spending Forecast 2025-2026 (Millions of AU Dollars)

^{Source: Gartner (September 2025)}

“The rapid expansion of hyperscale data centers for GenAI is driving huge demand for power, which utility providers struggle to keep up with,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “It is encouraging to see such strong growth continuing in data center spending, as enterprises and service providers work together on solutions to support rapid GenAI growth.”

Largest Spending Directed to Software
Software will be the largest IT spending category in Australia in 2026, overtaking IT services. Gartner forecasts software spending in Australia will reach almost A$60 billion in 2026, a 13.6% increase from 2025.

“Australian organizations are rapidly migrating to AI-enabled software and cybersecurity tools to enhance workflows, manage compliance and combat threats, which are both commonly delivered as software services,” said Rowsell-Jones. “In particular, GenAI is transforming the software landscape by enabling more intelligent, efficient and personalized applications.”

Technology vendors are rapidly integrating GenAI-driven capabilities into their products to capitalize on early monetization opportunities and stay competitive as GenAI adoption becomes a key differentiator in software. Gartner predicts by 2028, 75% of spend will be on software with GenAI functionality, as emerging use cases unlock new efficiencies and capabilities in software solutions.