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NZ Govt IT spending to hit $1.6 billion

19 Jun 2013

As worldwide government IT spending stays flat throughout the world, Kiwi spending is expected to reach over $1.6 billion.

Spending on IT product and services by government agencies in the country is expected to grow almost 1.4% this year, with software and IT services spending the main areas of growth.

This is according to a recent study by Gartner, who also claims public sector IT spending will reach almost $1.8 billion by 2017 - covering spending on software, IT services, telecommunications, devices, data centres and internal IT services (staff costs).

The forecast beats that of the rest of the world, with global IT spending by government organisations projected to total US$449.5 billion in 2013, a slight decrease of 0.1% from 2012.

And despite decreased spending worldwide in some areas, mobile technologies, IT modernisation and cloud computing are the top three focus areas for 2013.

Cloud computing, in particular, continues to increase compared with prior years, driven by economic conditions and a shift from capital expenditure to operational expenditure, as well as potentially more important factors such as faster deployment and reduced risk,” says Christine Arcaris, research director, Gartner.

Other areas, such as data centre consolidation, are lower on the list than in previous years, perhaps demonstrating that they may have met resistance in a more strategic roll-out.

Vendors should be ready to reposition offerings according to these changing market dynamics.”

Cloud-based services

Gartner says Kiwis are adopting public and private cloud-based services at an increasing rate, with 30-50% of organisations planning for, or having an active IT services contract within the next 12 months.

While the focus initially was on software-as-a-service (SaaS) implementation, future rollouts will include infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS).


As the top priority, mobility is increasing in importance among government agencies worldwide according to Arcaris, who says demand is strongest in government agencies with more decentralised staff. Unsurprisingly, momentum is building for bring-your-own-device (BYOD) programs, but questions continue. Of the organisations surveyed, 52% said employees are allowed to bring their own smartphones to work, and 50% can use their own laptop, followed by tablets at 38%. Vendors must also understand how growing interest in BYOD policies and strategies may impact opportunities in the government sector, security and governance may limit the pace and adoption.

Big data

The survey also indicated that while big data is not yet a high priority among survey respondents, it is gaining momentum. The focus on government efficiency and effectiveness means opportunity for big data/analytics, as it represents an emerging focal point for specific government modernisation.

“Government organisations have increased big data spending for improper payment systems, indicating the desire to tackle fraud, waste and abuse within agencies, as well as target upfront errors in revenue collection,” Arcaris says.

“While agencies are assessing how to manage, leverage and store big data, not many have addressed the challenges associated with the utilisation of content and the issues associated with merging large amounts of data onto a single platform. Vendors must acknowledge the challenges here, and tie big data solutions back to specific agency workflows."