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The most expensive part of IT isn’t what you think

Angus Kidman 8 July 2016

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Global spending on IT will top a whopping $3.41 trillion this year.

Chances are you mostly think about your workplace IT department when the office Wi-Fi stops working again. But business technology is big business. Research firm Gartner estimates that global expenditure on IT gear and services will top $3.41 trillion this year.

That figure might fall a little because of the impact of Brexit, which is likely to cause headaches for UK firms and impact prices across Europe. But it remains a huge sum.

The most obvious part of IT is the devices that end up on your desk in the office. However, those don't make up the majority of sales in this segment. Check out the table below for the full breakdown.

2016 Spending ($ billion)2016 Growth
Data Center Systems174,5782.00%
Software332,2075.80%
Devices627,235-5.30%
IT Services897,6343.70%
Communications Services1,380,782-1.40%
Overall IT3,412,4360.00%

Yep, the biggest expense is in "communications services". There was a time when IT expenditure was considered quite separately to comms, but those days are long gone. When everyone in your office has a mobile phone anyway, it's arguable you don't necessarily even need a desk phone for every staff member. (That's the approach we take at finder HQ, as it happens.)

IT services is the second-biggest category, and that highlights the most important point: the expenditure on IT staff invariably dwarfs what gets spent on communication services, hardware and software. That figure isn't being tracked in this table, but it's one of the fundamental truths of business IT: people are your biggest expense. That remains true even if you outsource much of your development and management work to countries where labour is cheaper, rather than a country like Australia where wages continue to rise.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.

Picture: Shutterstock

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