sommersby -

Australia’s cloud market tipped to surpass $14bn in 2025

The growth will be led by growing demand for software-as-a-service offerings as Aussie firms look to tap cloud services in their digital transformation efforts

Australia’s cloud computing market is tipped to grow by 12.5% to reach $14.1bn in 2025, supported by large-scale digital transformation initiatives to counter pandemic-related operational issues, according to GlobalData.

Saurabh Daga, technology analyst at GlobalData, noted that like their counterparts elsewhere, Australian businesses have been undergoing Covid-19 pandemic-fuelled rapid transformations, which included adoption of remote work, automation of key business processes, and dependence on digital channels for customer interactions.

“Cloud-based platforms and services continue to be a key element of this ongoing transformation, thus driving the enterprise spending on cloud in the country,” said Daga.

In the public sector, municipal and city councils as well as federal government agencies have also been migrating their legacy applications to cloud.

In August 2021, Atos was awarded a three-year contract by Australia’s Digital Transformation Agency to offer cloud services to federal government agencies. Most recently, Australia’s criminal intelligence agency awarded an A$180m (US$129m) contract to upgrade and migrate its fingerprint system to a protected cloud platform.     

Among cloud computing segments, public cloud services, including software as a service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS), will account for more than 50% of the total addressable market over the forecast period, with SaaS being the largest category overall.

“PaaS will be the fastest growing product/service segment over the forecast period,” Daga said, adding that the growth is being driven by strong enterprise preference for cloud-native application development platforms that have an inherent cost advantage and better application management capabilities.

Hyperscale cloud providers such as Microsoft, Amazon Web Services (AWS) and Google have already established their cloud regions within Australia and are competing fiercely to dominate the market.

While Google launched its second cloud region in Melbourne in 2021, Microsoft is currently planning a new cloud region in Sydney, which will be its fourth in the country.

Recently, Microsoft and IT services provider Infosys had also signed a multi-year strategic agreement with Ausgrid, an Australian utility provider, to modernise Ausgrid’s legacy applications and IT infrastructure through cloud management platform and managed services.     

GlobalData noted that large enterprises will account for the lion’s share of Australia’s cloud spending, while cloud spending by small and medium-sized enterprises (SMEs) will increase at a marginally faster compound annual growth rate of 12.5% over the forecast period.

“Various Australian government digitisation initiatives such as the Digital Business Plan, and Digital Business-to-Business Partnerships initiative will be the key growth driver for spending on cloud services and platforms by the SMEs in Australia,” Daga said.

Gavin Alexander, principal solutions architect at consulting firm Versent, noted that the tech skills shortage will see also organisations consume more cloud-based services.

“That skills shortage will mean companies need to make greater use of consulting partners to either own shared outcomes or augment their existing teams. I think that this buy-and-partner instead of build-it-in-house approach will enable tech teams within businesses to focus on growth and market differentiators, which will be a big plus in an increasingly competitive environment,” he added.

Read more about cloud in Australia

Read more on Cloud computing services

Data Center
Data Management