Evolving tech budgets in Australia: The shift from tangible assets to intangible solutions

For decades, Australian businesses invested heavily in tangible IT assets—servers, data centres, and networking infrastructure. These purchases were capital-intensive, with businesses absorbing depreciation costs over time. However, as technology evolves, so do IT budgets. The shift is clear: businesses are moving away from spending on physical infrastructure and investing more in intangible solutions like cloud computing, SaaS, and cybersecurity. This evolution demands new approaches to technology finance to ensure businesses can fund digital transformation efficiently.

The key trends driving this shift

1. Cloud and SaaS adoption

The rise of cloud computing has revolutionised IT budgets. By 2025, 55% of Australian workloads are projected to run in public clouds, significantly reducing reliance on on-premise infrastructure.

• Public cloud spending in Australia grew by 19.7% in 2024, reaching A$23.3 billion.

• IT services, which include cloud consulting and Infrastructure-as-a-Service (IaaS), are projected to dominate budgets at A$53.41 billion by 2025.

This marks a major transition where businesses are shifting from purchasing servers to subscribing to scalable cloud solutions that offer flexibility and efficiency. However, funding these solutions requires IT finance solutions that align with the subscription-based model.

2. The surge in software & cybersecurity spending

With businesses embracing digital transformation, software and cybersecurity are taking priority over hardware investments.

• Software spending is the fastest-growing IT segment, set to rise 13.4% in 2025, reaching A$45.85 billion.

• Cybersecurity investment is surging, driven by regulatory pressures and an increase in high-profile data breaches.

Unlike traditional hardware investments, these intangible assets don’t depreciate in the same way. Instead, they offer continuous value through enhanced security, operational efficiency, and compliance readiness. Yet, funding software finance and cybersecurity initiatives often falls outside traditional finance models.

3. The decline in on-prem infrastructure

Data centre spending is now reserved for specialised AI and high-performance computing workloads, rather than general business IT needs.

• AI/GPU workloads are one of the few growth areas for on-prem infrastructure, projected to increase 11.3% in 2025.

• Cloud adoption has doubled since 2017, further reducing the need for physical IT infrastructure.

Businesses are realising that paying for cloud-based solutions on an as-needed basis is far more efficient than managing costly in-house data centres. But, without the right funding options, companies may struggle to transition efficiently.

The economic impact of intangibles

Cloud adoption isn’t just an IT decision—it’s an economic driver.

• Over the last five years, cloud services have contributed A$9.4 billion in productivity gains to the Australian economy.

• Investment in intangibles such as software, patents, and digital infrastructure now rivals traditional capital expenditure, particularly in industries like manufacturing.

The Challenge: Financing intangible IT investments

Despite the clear benefits of intangible solutions, many businesses face a funding gap. Traditional financing models favour tangible assets with resale value, making it difficult for businesses to secure capital for:

• SaaS subscriptions

• Cloud migration projects

• Cybersecurity investments

• Managed IT services

Without tailored IT finance solutions, companies may face cash flow constraints that slow their ability to invest in growth and innovation.

How Zeal Capital helps businesses fund intangible projects

At Zeal Capital, we recognise that the future of IT spending isn’t in hardware—it’s in scalable, service-based solutions. That’s why we help businesses finance their transition to cloud-based and SaaS-driven models.

• Flexible financing for SaaS & cloud solutions – We structure technology finance agreements that align with the subscription-based nature of SaaS, allowing businesses to spread costs over time while preserving cash flow.

• Cybersecurity & compliance financing – With regulatory pressures mounting, we provide tailored funding solutions that help businesses invest in security infrastructure without upfront capital strain.

• IaaS & managed services funding – For businesses shifting from CapEx to OpEx models, we help fund IT service contracts, enabling smooth digital transformation without budgetary roadblocks.

The future of IT budgets: adapt & finance for growth

The shift from tangible to intangible IT investments is undeniable. Businesses that fail to adapt risk falling behind, but those that embrace the transition stand to gain efficiency, scalability, and competitive advantage.

At Zeal Capital, we help businesses navigate this change by providing the financial tools needed to support modern IT investments. If your company is looking to fund its next digital transformation project, let’s talk.