Australia’s IT spending is far from slowing down. According to Gartner, it's forecast to exceed AUD 172 billion in 2026, an 8.9% increase from 2025. While this growth reflects continued digital acceleration, the real story lies in how and where that money is being spent.
Gone are the days of uncoordinated tech investments. In 2025, IT leaders are prioritising resilience, efficiency, and business alignment over experimentation. From cloud and cybersecurity to AI governance and infrastructure modernisation, spend is shifting from volume to value.
This article unpacks the top IT trends shaping spending in 2025, using insights from Gartner’s latest market forecast plus what they signal about priorities heading into 2026. Whether you're budgeting, benchmarking, or building your roadmap, these are the strategic signals to watch.
Australian IT Spending Forecast 2025-2026
Source: Gartner (September 2025)
Trend #1: Software takes the lead in strategic spend
According to Gartner, software will become the largest IT spending category in Australia by 2026, overtaking IT services for the first time. Software spend is projected to grow 13.6% year-on-year, reaching nearly A$60 billion, driven by demand for cloud-based platforms, SaaS ecosystems, and automation-ready applications.
This signals a decisive shift: from infrastructure-first thinking to platform-led transformation, where flexibility, integration, and speed-to-value take centre stage.
What this means for IT leaders:
- Invest in interoperable platforms that streamline operations and connect cloud, AI, and security layers.
- Prioritise tools that automate and orchestrate, not just digitise.
- Audit your application stack to reduce redundancy and maximise ROI.
From ERP to collaboration to AI-infused workflows, organisations are doubling down on tools that support business agility and workforce productivity.
Takeaway: The smartest IT strategies in 2025 aren’t about buying more tools, they’re about making software decisions that scale and integrate across your environment.
Trend #2: Infrastructure makes a comeback
While cloud and SaaS dominate headlines, Gartner forecasts that spending on data centre systems in Australia will grow by 22.5% in 2026, reaching A$10.1 billion. That’s the highest growth rate across all IT categories, a clear signal that infrastructure modernisation is back on the agenda.
This resurgence is being driven by:
- A refresh cycle in core infrastructure
- Increased demand for compute power to support AI workloads
- Greater focus on hybrid environments that blend on-prem resilience with cloud scalability
With server spending alone expected to grow by 30%, CIOs are reassessing how they balance performance, control, and cost especially in regulated or latency-sensitive industries.
What this means for IT leaders:
- Review your on-prem footprint to identify infrastructure debt and modernisation needs
- Design environments that support AI, automation and high-performance analytics
- Prioritise infrastructure that enables resilience and continuity, not just uptime
Takeaway: FY25 is proving that cloud redefines the role of data centres. Modern infrastructure is now foundational to hybrid strategy and future-scale readiness.
Trend #3: Security spending remains non-negotiable
As threat volumes grow and regulations tighten, cybersecurity remains one of the most stable and strategic areas of IT investment in 2025. Gartner’s forecast shows continued strength in security and risk management spend, especially in detection and response, identity protection, and compliance-driven controls.
What’s changed is where that investment is going:
CISOs are moving beyond perimeter tools to focus on threat response, governance, and operational resilience, the kind of security posture that can satisfy auditors and stop real-world attacks.
Key security priorities in 2025:
- Extended Detection and Response (XDR) to unify alerts and shorten response windows
- Identity and Access Management (IAM) to strengthen Zero Trust foundations
- Security posture assessments to meet frameworks like ASD Essential 8, ISO 27001, and APRA CPS 234
- Managed Security Services (MSS) for 24/7 coverage and compliance support
Cybersecurity is no longer just an IT concern, it’s a board-level mandate. And with breach costs and accountability rising, the focus is shifting from “what tools do we have?” to “how prepared are we to recover?”
Takeaway: The real measure of cybersecurity in 2025 isn’t visibility, it’s response maturity. Spend on resilience, not just prevention.
Trend #4: Cloud optimisation over expansion
Cloud spending in Australia is still on the rise, with public cloud end-user investment forecast to reach $26.6 billion in 2025, up 18.9% year-on-year (Gartner). But the nature of that investment is changing.
In FY25, organisations aren’t just adding more workloads, they’re getting smarter about the ones they already have. Cloud strategies are shifting from “lift and shift” to governance-first optimisation.
CIOs are now focused on:
- FinOps and cost governance to control spend creep
- Misconfiguration remediation to close gaps in security posture
- Hybrid and multi-cloud integration for agility and compliance
- Cloud-native observability tools to improve performance and incident response
This move reflects a broader maturity shift, cloud is no longer treated as a magic bullet. It’s a utility that needs tight control, clarity, and consistent value delivery.
Takeaway: In 2025, the winners in cloud are those who manage, secure and optimise with discipline.
Trend #5: AI investment grows, but governance lags behind
AI is now firmly part of the IT budget but few organisations have fully operationalised it. Gartner’s global forecasts show AI-related spend increasing across infrastructure, applications and services. Locally, businesses are investing in tools like Microsoft Copilot, AI-driven analytics, and workflow automation.
But execution is lagging behind investment.
CIOs are hitting familiar barriers:
- Fragmented data architecture
- Lack of executive alignment or clear ROI
- Security and IP risks from AI-generated content
- Absence of governance frameworks for responsible use
That’s why AI readiness assessments and governance consulting are gaining traction. Forward-thinking organisations are tying AI pilots to defined use cases, building internal capability, and preparing policies before deployment.
Key areas to prioritise:
- Data quality and integration
- Security controls and access to AI tools
- Change readiness across teams
- Executive oversight and ethical guardrails
Takeaway: AI investment is easy. AI maturity is hard. The gap between interest and operationalisation is where most projects will stall in 2025.
Don’t just spend. Strategise for impact.
With Australian IT spending set to reach A$172.4 billion in 2026, it’s clear that investment is accelerating. But in 2025, success won’t be measured by how much you spend, it will be measured by how well you align your investments to strategy, risk, and readiness.
From software consolidation and hybrid cloud optimisation to AI governance and security resilience, the smartest organisations aren’t chasing trends. They’re building maturity. And they’re planning for execution from day one.
At The Missing Link, we help you:
- Benchmark your IT maturity and uncover priority gaps
- Assess AI readiness and secure your adoption roadmap
- Optimise cloud workloads with visibility and control
- Strengthen security operations to meet both threat and compliance demands
- Align IT with business value, not just technical performance
Ready to focus your strategy and maximise impact in FY25?
Talk to our team today for a tailored, insight-driven approach to your IT priorities, backed by data, aligned to outcomes.
