Strategic Imperatives for Australian Technology Industry - 2026

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This transcript is based on the episode’s English auto-captions and has been formatted for readability. Please allow for occasional transcription errors in names, acronyms and specialised terms.

[00:00:01]

Hello and welcome to the enterprise tech talk podcast. I am your host Saumitra Kalikar. Now this is the last episode of calendar year 2025. So I thought I will take this opportunity to share with you um some of the perspectives I have on the technology priorities for 2026. Um also what is the economic and geopolitical environment that we are going to operate under and how is those going to shape our priorities and our thinking. But before we get started, I also want to use this opportunity to share my condolences to uh families and friends of the people who unfortunately share sacrifice their lives during the hideous terrorist attack in Sydney over the weekend. Uh these barbaric forces cannot divide us. Let's stand united as [music] >> So let's dive in. Before we talk about the technology priorities in 2026, it is important to understand the broader economic and geopolitical environment.

[00:01:26]

The macro factors which are going to shape our technology priorities. So if you look at the headwinds which are going to which we all of us are going to face in 2026 there are four which come to my mind. One is about employment growth. The overall employment growth in Australia is still slowing down. So that is a will be an important factor for CIOS and senior executives. Um when talk about technology investments in 2026, the other other factor is about cost pressure and inflation. Inflation continues to be a sticking point for Australia for a while now and it will continue to be the case in 2026. In fact um the forecast is that the interest rates are only going to increase in 2026 um instead of going down. Um the other important uh headwind event or pressure point for uh all of us in 2026 is going to be um digital talent shortfall. Um there is a report that projects uh a deficit of around 370,000 um digital professionals um in 2026.

[00:02:38]

And the last and an important one is around the emerging volatile geopolitical situations. Right. What is what does that mean is it is pushing the senior leaders to rethink the the global supply chain chains for their their organizations. Um it is pushing them to rethink how they can have more control over our into global supply chains. So these are the little we will be operating under the at the same time uh there are some positive indicators. Uh uh the one one such thing is the technology um investment in uh across all the industries in Australia is only going to increase. Uh so the that seems to be a bit paradoxical in the sense that we have so many headwinds uh that we have to deal with um in 2026 but at the same time uh the technology investment is projected to increase by around 8.9% year on year. What it also means that it is sending us a clear message. Uh and the message is that the board and the senior executives they have started realizing that technology is no no longer a a cost center. It is the the most single most important lever they have now to not only address these heads but also position themselves uh for the competitive differentiation.

[00:04:11]

So before going to 2026 let's have a quick reflection on how organizations uh prioritizes investments in 2025 among these uh economic and geopolitical uncertainties right and if I look at those the four key strategic shifts um or um uh which which emerge um one is around artificial intelligence. Now in artificial intelligence um most of the organizations in 25 prioritize investment mainly around ja um the most of the investment was um around realizing quick benefits uh uh through productivity use cases. Um some organizations also uh explored um around agent care uh and and uh ran some pilots to test the technologies as well as to test uh the new ROI models. But I think overall it is fair to say that um in 2025 artificial intelligence has not uh realized uh any significant business benefits for organizations which can be attributed to key business metrics.

[00:05:29]

The other strategic shift that has emerged in 2025 is around digital sovereignty. What I mean by that is organizations are more and more looking at having a more control around uh their data and their critical assets. Right. Uh so few shifts which have occurred there are um organizations has started optimizing their vendor landscape also managing risk not only within the technology operations but across the overall vendor ecosystem. Uh other thing that has emerged is uh uh better manage financial management of or what is called as PHOPS across the technology operations moving beyond just cloud phops um and also focusing on sovereign and clouds and this has emerged as a key priority for particularly with government um organizations.

[00:06:29]

The other strategic shift that has emerged in 1995 is cyber security and that's probably not a surprise given the the cyber attacks uh major cyber attacks that have happened over 2 three years uh across many um Australian organizations. So in 2025 organizations devoted to more investment in cyber security primarily to uplift uh mature their existing cyber security functions and and meeting the immediate needs. Um so that has been the focus on on in 2025. In 2026 it is expected that organizations will start taking much more strategic approach in building robust cyber security capabilities. Um the other strategic shift that emerged in 205 was around governance and compliance. Um and this is again no surprise given um the cyber attacks and the need for digital sovereignty and emerging AI use cases that is pushing um government as well as the regulatory industries to to lay out certain guarant regulations which all organizations need to comply with. A good example of that is in 2025 uh for financial and insurance uh industries uh APRA laid on certain new um uh compliance mandates called CPS 230 and CPS 23 234 uh which or all those organizations needed to comply with uh which are more focused on uplifting security uh capabilities but also maturing their third party risk management capabil Now while strategic shifts were happening in 2025 the the chronic constraints around uh cost and um the ROI pressure the overall skill shortages within Australia Australia um the data risks around uh storing securing data but also um better management of customer concerns around around access of data and use of data um those have continued and and the the issue around legacy systems and how it actually creates a bottleneck or to deliver uh more modern digital experiences to their customers that that issue mostly will continue to be there in 26 as well. Let's talk about how these uh strategic shifts um are going to evolve further in 2026.

[00:09:09]

It is expected that in 2026 investment in the strategic shifts will continue um but it's only going to accelerate further. This the the focus is going to shift from um meeting the current needs to tomorrow more accelerated growth. So if you look at all those strategic shifts or strategic imperatives um from artificial intelligence perspective in 2025 while there was the for the focus was mainly around pilots and uh realizing small benefits using GI tools and so on and so forth. In 2026, this is going to shift definitely towards more industrial skill deployment, adoption of agentic AI. Um, and uh by by default that means that establishing a very strong AI backbones around security, identity and data backbone etc. with very clear uh consideration for tangible and measurable business benefits and outcomes. Part of this also is going to be upskilling um uh technology employees and overall business uh users for for better use of AI technologies.

[00:10:25]

When we talk about digital so in 2025 the focus was more about cloud optimization and finoff introduction um and also vendor optimization. In 2026, this is going to shift towards more hybrid by default approach. Uh primarily will be driven by the new AI use cases that will require more age better age computing as well as cloud computing. Um it will the organizations will also start thinking about multicloud architectures um for improving their uh sovereign entry and resilience. Um so the the other important investment is going to be around AI optimized service infrastructure. Uh as organizations start thinking more and more about AI use cases from cyber security perspective uh last in last year uh in 205 um there was an increased budget of around 30 33% across the industry. Um this was mainly uh to build resilience and reactive uh responses uh response mechanisms. But in in 2026, organizations will start shifting towards uh improving their capities for zero trust u um as well as preemptive defense mechanisms. Um the other emerging thread uh that is going to be uh around AI based cyber attacks and that is something organizations will start thinking about is to um standard themsel from s such attacks in the future. uh from governance and compliance perspective uh in 2025 the focus has been mainly around um addressing immediate regulatory mandates as like the the ACRA mandate for CPS 230 through34 as I mentioned earlier initial understanding of evolving privacy uh act regulations um um uh understanding of emerging data privacy concerns etc.

[00:12:29]

While in 2026 the focus has will shift towards um uh overall data sovereignty as as a as a key theme for new operating models. Um then there is an emerging mandatory regulation coming up for um ESG sustainability organizations will start uh planning for that. Um and as well as importantly uh from AI perspective uh uh there is an emerging uh regulatory mandate around automated decisioning reporting and that is something organizations will have to plan and deliver by by 2026. So let's unpack the strategic imperatives a bit more in u one by one. So from artificial intelligence perspective the the main shift that is going to happen in 2026 is as I said earlier as well um moving beyond pilots and uh uh uh deploying AI at much more industrial scale right um uh what I mean by that is identifying u use cases um with agentic AI use cases not just gener use cases start building the foundation ations for uh uh agentic AI uh both from technology foundation perspective and AI governance foundation perspective. Um and then start rolling making investment potentially into uh uh new technologies which uh which bring together different features for deploying agentic solutions um and then start rolling out um uh priority use cases in 2026. This also means that potentially where required um there would be higher growth in server spending. Um not necessarily all the EI workloads can can run on existing infrastructure. Some of the workloads would need specialized AI AIcentric infrastructure and organizations which are more advanced in the AI use cases they might start investing into uh such infrastructure in 2026 itself.

[00:14:44]

And overall the organizations will start focusing on more high value use cases in 2026. In 25 most of the organizations focused on more quick uh quick means realizing productivity use cases. But in 2026, organizations will start deploying agentic use cases which will be embedded within the the critical business workflows um within the organizations and that will help to really shift the the key business metric matrixes that organizations are after. Next the the dishes over will become a strategic priority for board and senior executives in 2026 and that will be primarily driven by geopolitical risks and emerging resilience needs. So now what it means for organizations is this will become an emerging mandate for architecture and procurement governance to make sure that the new technology investments are meeting the the more important criteria for data sovereignty um and and reduce vendor risks. Um as well as uh there would be overall reduced dependency on global hyperscalers particularly reliance on a single hyperscaler and uh organization will want to have options open on investments into multiloud environments.

[00:16:12]

the overall uh computing uh investments will shift towards a mix of hybrid um or age computing and cloud computing um uh primarily driven by new emerging AI use cases which require much lower latency. Um apart from that uh organizations will start uh shifting their priorities towards um better data resilency and emitting related regulatory compliances. um u organization should start looking at this as a one of the primary mechanisms to maintain or build customer trust. Um then there are Australian government is releasing new cloud policy in July 2026 that is something will be mandatory uh for most of the government organizations u particularly to invest into software and cloud solutions. Um so and overall so there is going to be um acceleration into local infrastructure investments um primarily to having much more digital overaging in place. Now most of the organizations already started investing more on cyber security in 2025.

[00:17:30]

In 2026, organization will start taking much more strategic approach towards these investments, building robust capabilities uh to future proof them against evolving new emerging tech cyber threats uh over the long long term. So preemptive defense is going to be the main cyber defense framework uh that organizations will start planning for uh in 2026. there is likelihood of emergence of new type of um uh new types of cyber attacks which would be AIdriven. Um so those would include high velocity threats um including flawless realtime AI defense deep fakes um which will create the crisis of authenticity and identity itself. So as a strategic response, organizations will be forced to enforce uh zero trust across every human machine and AI agent interaction. Board will need to make sure that um all the critical assets within their organizations are have rigorous defense mechanisms in place. um the new preemptive defense mechanisms are invested into as well as the overall supplier network supplier ecosystem um is assessed for managing and reducing the third party risks.

[00:19:02]

Now from regulatory mandates and deadlines perspective um there are three main um regulatory emerging regulatory mandates that come to my mind um which are applicable to almost all um big enterprises within Australia. uh uh this of course does not include any industry specific regulatory mark mandates for example for healthcare or financial industry etc that those specific organizations will have to still comply with um uh so in 206 um uh one emerging uh mandate which is actually uh uh ending the 2-year grace period is around u um automated decisions uh related provisions which are part of the private Y actif uh so most of the organizations uh will will have to make sure that um the responsible AI frameworks are in place uh which focus on greater auditability, transparency and human oversight for all AI and ML related models uh which impact their customers or citizens.

[00:20:12]

Um the other emerging um mandate is around government cloud policy. Uh so that's a policy that that commences by July 2026. Um uh and all the government organizations in particular uh public sector organizations and their enterprise partners they will have to formalize their hybrid and sovereign uh cloud strategies to control data residencies and operational autonomy. The other emerging mandate that comes to my mind is around uh sustainability reporting. So that is a new mandate Australia is rolling out um called FRS S1/ S2 particularly for large businesses and expectation is that more all these large businesses will meet those that standard um uh throughout 2027. what what it means that in 2026 organizations will will start uh exploring the the options including the technology platforms or solutions which are required to meet standard.

[00:21:22]

So what these four strategic imperatives mean for technology leaders and CIOS in my view um the CIOS can take away key four key actions uh for their consideration. Uh the first one is focusing on better governance particularly the data governance and AI ethical AI governance um establishing and matching those frameworks before they can plan for this plan for safe and scalable agentic AI adoption. So that that's point number one. The action number two is they they can think of how to fund these transformative initiatives particularly for agentic. Um and that could be done through um reducing complex um the technology complexity and technology which would potentially release productivity savings which can be repurposed for investment into better AI production.

[00:22:28]

Point number three or action number three could be around or predicting for hybrid soy. What I mean by that is while CIOS and technology leaders are um investing into expansion into cloud at the same time they will have to start thinking about investment into age computing. This will become more and more relevant as organizations start rolling out more agentic AI use cases which require much lower latency. And finally um the with introduction of agentic AI the the the overall ways of working and operating model may look different. There will be increasing um a human agile hybrid workforce which would mean that new technology skills are required um which would means that new new types of roles are to be established. So CIS and technology leaders will will need to start planning for those new emerging operating models for their organizations.

[00:23:36]

So in conclusion um the 2026 is going to be a critical pivot point for CIOS and technology leaders. We are at a critical uh intersection point um with accelerating technology disruption um increasing competitive pressure and uh emerging um greater governance requirements stemming from the global disruptions and uh the new national policy directives. So I will leave you with the one last message and that is the competitive advantage in 2026 will not belong to those who adopt the most technology but to those who lead with the intent in industrializing agentic AI at scale anchoring in sovereignity resilience and disciplining governance. Thank you. Hope you like today's episode. Please subscribe us on YouTube, LinkedIn and [music] X platforms. Also, if you are passionate about any such enterprise technology topics and want to participate [music] in the discussion, please reach out at inquiry@ enterprisete.com. [music] Also, please visit the website www.enterprisette.com Enterprised.com for more details.