Our Datacom teams have a front row seat to the challenges and opportunities that exist for the businesses and government organisations we work with across New Zealand and Australia.
We asked some of Datacom’s leaders to share their insights on the year that was, what’s on the horizon in 2026 and what it will take to build a foundation for future success. One of the clear themes from this year’s insights is that AI paired with people is central to unlocking productivity, delivering better customer experiences and building high-impact solutions for our customers, but trust, governance and sovereignty must anchor the journey – and AI upskilling will be critical to empower employees. 2026 will be about scaling what works, optimising what we already have and designing solutions that harness AI to solve challenges for our teams and for our customers.
Australia is at a pivot point. Productivity growth has stalled, and the pressure to do more with less is mounting. A recent Datacom/YouGov poll found that 89 percent of Australians believe adopting new technology is key to lifting national productivity, and 73 percent believe AI will help them do their jobs more easily. Yet only 42 percent consider themselves highly tech-literate, and seven in ten want to improve their tech skills.
Agentic AI presents a timely opportunity to reverse this trend by augmenting human capability — but only if we bring people along on the journey and evolve our ways of working. Public discourse has often centred on the risks of AI, leaving a legacy of mistrust. That’s why transparency, accountability and ethical design are critical if we want to use AI to its full potential.
“A more rapid blending of the interaction between AI and human employees in the workplace will allow people do to their job better … using AI driven automation to responsibly and effectively increase the output of our human teams.”
The focus should be on creating models where AI augments the work that people do, not replaces it. Upskilling and reskilling is essential so Australians understand how to make the most of AI technologies. With the right policy settings — incentivisation, government-led procurement, and a lighter-touch regulatory approach — we can move from being digitally enabled to digitally empowered.
Read more about AI’s role in unlocking productivity and the upskilling issue that needs to be addressed: Australian tech literacy lags as productivity pressures rise
As we enter a new chapter shaped by the rapid evolution of AI, the conversation with customers from Invercargill through to the far North is shifting. It’s no longer about what’s theoretically possible — it’s “what can you show me working today that will truly transform my organisation, deliver measurable gains, and position us to be effective (public sector) and compete (private sector) in an environment where both capital and talent are constrained”.
The next two years will mark the move from hype to transformation. AI adoption has surged — with 87 percent of New Zealand organisations now using AI — but just 12 percent have implemented it at scale. Building a prototype is easy; embedding AI into core operations is far harder. Data readiness, integration complexity, compliance, security, and skills shortages are the real hurdles. Thankfully, over recent months customers regularly reported that Datacom is truly leading the way combining the speed and relevance of grass roots AI initiatives across our business with a cohesive organisation wide strategy.
“The organisations that thrive in 2026 will move with speed and discipline — scaling proven innovations, optimising existing investments, and keeping people at the centre of technological change.”
Technology has the power to unlock real progress. My focus is on supporting our team, our customers, and our partners to navigate this change with clarity and purpose — creating solutions that are right for our market and reflect the best of Aotearoa.
Peter Nelson took on the role of Datacom New Zealand Managing Director this year after more than a decade leading key areas of the business: Datacom New Zealand MD Announced: SaaS MD Peter Nelson
Managed Operations has undertaken a huge program of work, known as “the future of service delivery”, which is creating the foundation for a fundamental shift in how we deliver services, with the end product being better experiences, speed to value, and higher productivity. AI and automation now handle a significant share of interactions, freeing our people to focus on higher-value work.
“For our people and our customers that means everyone really moves up the skills chain, because all of a sudden you’ve got AI augmenting the performance of all our people. That means our people are not focused on password resets and bouncing tickets. Having an AI agent sitting alongside customer service representatives also means they have a greater ability to help customers and resolve more complex queries in the moment – a problem that might once have had to be referred to a technical team can now be handled on the spot with guided support from AI.”
Trust is a critical foundation when you are introducing new ways of working and we’ve mapped critical interactions to ensure seamless human hand-offs and avoid friction for our teams and our customers. Looking ahead to 2026, our focus will be on scaling AI-driven transformation, deepening partner ecosystems and driving measurable experience and productivity outcomes.
Stacey Tomasoni sat down with Service Now’s SVP and GM of Data & Analytics Products Gaurev Rewari earlier this year to explore AI opportunities and risks, and the role of IT in driving business value: Navigating the AI fog: a Q&A with ServiceNow’s Gaurav Rewari
Two dominant themes stood out this year: cost optimisation and making the most of AI. Customers want to create competitive advantage while reducing spend, and AI is uniquely placed to deliver both.
“AI is uniquely placed to deliver innovation while simultaneously reducing spend … our customers are looking for our guidance to navigate their way through this shift.”
The biggest trend has been AI disrupting every step of the software development life cycle. We’ve responded by building AI-enabled products that touch the entire software development lifecycle — from agentic tools in development to full automation of testing, legacy modernisation at a fraction of the time and cost, AI-based website migrations, and AI-enabled platform implementations. For me, it is a point of pride that every part of Datacom has chosen to see this disruption as an opportunity.
Our priority for 2026 is continuing to build propositions across the business that bring together the breadth of Datacom’s expertise and solve our customers’ challenges, so for example AI for CX with the Managed Operations team and cloud migrations and app modernisation with the Infrastructure Products team.
Read more about how Sunny Katira’s team are using AI to transform software development and achieve faster, more cost-effective modernisation of legacy systems: Modernising apps, turbocharging new platforms with AI agents
This year, customers were navigating a tough balancing act: managing costs under tight budgets, adopting AI safely while mitigating risk, strengthening security, and maintaining operational stability and service quality in a fast-changing market. Those pressures shaped every conversation we had.
We saw AI’s rapid rise intersect with growing security concerns and intense cost-efficiency demands. Organisations accelerated automation, standardisation, and data-driven decision-making to stay competitive. At the same time, major infrastructure investments — particularly in data centres and GPU resources — signalled that businesses are preparing for an AI-heavy future.
Innovation in our space has been about enabling that future responsibly. We’ve focused on AI-ready security frameworks, cloud partnerships, next-gen infrastructure and automation that delivers measurable efficiency gains.
Looking ahead, our priorities for 2026 reflect what we’ve learned: AI-driven innovation, security maturity, and operational excellence will sit alongside growth in cloud and data centre services. It’s about balancing expansion with optimisation — ensuring we’re AI-ready, secure and efficient.
“Sovereign technology is more than a buzzword. It’s about ensuring that, as data volumes surge and artificial intelligence becomes integral, our governments, enterprises and communities retain ultimate authority over their most sensitive information.”
Read more about the need to rethink how we build, run and protect our critical infrastructure in this opinion piece: Why Australia's tech sovereignty needs smart partnerships
