Capital expenditure on computer software

IBISWorld forecasts private capital expenditure on computer software to increase by 14.0% during 2025-26, to reach $43.1 billion. Despite negative capital expenditure by the private sector and ongoing inflationary pressures over the year, businesses have invested in software to remain competitive and ease wage pressures. Businesses across various industries have significantly increased their investment in artificial intelligence (AI) software, embracing its potential to enhance operations and productivity. The COVID-19 pandemic accelerated the adoption of cloud computing and encouraged increasing expenditure on data storage and web hosting software. Furthermore, thanks to the release of ChatGPT, the rapidly emerging AI models have improved demand for AI software over recent years, leading to an increased capital expenditure on AI computer software. For example, according to the National Artificial Intelligence Centre's research, over the six months through the end of June 2025 (latest data available), 38.9% of Australian Small and Medium-sized Enterprises are adopting AI.

According to the ABS, wages have grown by 8.1% over the past three years through the end of 2023-24 (latest data available). This has incentivised employers to find cost-saving solutions to sidestep this cost pressure. Many are doing this by investing in productivity software to boost average output per employee. The rising popularity of online shopping, fast-tracked by the COVID-19 pandemic, has driven a significant hike in retailers' investment in internet-based sales and customer service channels. Commercial banks have invested strongly in software aimed at improving the mobility and accessibility of their services and financial products over the past few years, fuelled by the rapid adoption and demand of mobile banking and mobile payment mechanisms. A rise in the prevalence of cybersecurity issues like malware has prompted many organisations to increase spending on IT security software to safeguard their data from unauthorised access. Overall, due to stronger spending on digital technology, IBISWorld forecasts private capital expenditure on computer software to climb at a compound annual rate of 14.9% over the five years through 2025-26.