“Seismic shift” underway as NZ tech chases billion dollar payday

“Digital startups sit inside your own organisation, in your marketing department, in HR, in logistics and in sales. Your business units are acting as technology startups.”

Spending on technology products and services is projected to reach almost NZ$11.6 billion in New Zealand in 2015, as the country experiences “seismic shifts” in the technology landscape.

With much of this spending driven by the digital industrial economy, Gartner believes that while 58 percent of CIOs in New Zealand expect that their budgets will be flat or declining, technology spending is forecast to grow 2.9 percent across the country, up from 1.2 percent in 2014.

Addressing an audience of more than 1,500 CIOs and IT leaders at Gartner Symposium/ITxpo in Australia this week, Peter Sondergaard, senior vice president at Gartner and global head of Research, believes this represents a dramatic shift in IT spending power.

The trigger? A shift of demand and control away from IT and toward digital business units closer to the customer across New Zealand.

“Thirty-eight percent of global IT spend is outside of IT already, with a disproportionate amount in digital,” he says. “By 2017, it will be over 50 percent.

“Digital startups sit inside your own organisation, in your marketing department, in HR, in logistics and in sales. Your business units are acting as technology startups.

“Australia and New Zealand are increasingly known for creative and design expertise, with leading global vendors looking here to make acquisitions. You need to tap into this in your organisation and make it a competitive advantage.”

As a result, Gartner estimates that 50 percent of all technology sales people are actively selling direct to business units, not IT departments.

So much so that Sondergaard claims millions of sales people, and hundreds of thousands of resellers and channel partners are looking for new money flows in the fluid digital world, and they are finding eager buyers.

The Digital Industrial Revolution…

Delving deeper, Sondergaard believes there are “seismic forces” at work in New Zealand, creating permanent, structural changes in the business environment, with the impact that the digital business economy is having on the global IT industry becoming more “dramatic.”

Since 2013, 650 million new physical objects have come online. For example, 3D printers became a billion dollar market; 10 percent of automobiles became connected; and the number of Chief Data Officers and Chief Digital Officer positions have doubled.

In 2015, Sondergaard predicts that all of these things will double again, defining digital business as new business designs that blend the virtual world and the physical worlds, changing how processes and industries work through the Internet of Things.

“This year enterprises will spend over $40 billion designing, implementing and operating the Internet of Things,” he adds.

“Every piece of equipment, anything of value, will have embedded sensors. This means leading asset-intensive enterprises will have over half a million IP addressable objects in 2020.”

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