Australian cloud spend will hit $4.6 billion this year, says Gartner

Spending on public cloud services in Australia will reach $4.6 billion this year, according to Gartner forecasts. The spend represents an increase of 18.5 per cent on last year, the overwhelming majority of it being splashed on software-as-a-service (SaaS) offerings.

SaaS continues to be the largest public cloud segment by spend and also the fastest growing – up 24.4 per cent this year.

SaaS spending in Australia will reach $2,597 million this year Gartner says; platform-as-a-service $253 million; infrastructure-as-a-service $536 million; business process-as-a-service $920 million; and cloud management and security services $281 million.

The rapidly rising amounts being spent on public cloud services locally follows global trends, with the worldwide market projected to grow 21.4 per cent this to total US$186.4 billion, up from US$153.5 billion in 2017.

Globally however, the fastest growing segment is forecast to be infrastructure-as-a-service (IaaS). Gartner predicts cloud system infrastructure services to grow 35.9 per cent in 2018 to reach US$40.8 billion.

SaaS revenue is expected to grow 22.2 per cent to reach US$73.6 billion in 2018.

"In many areas, SaaS has become the preferred delivery model," said Gartner research director, Sid Nag.

"Now, SaaS users are increasingly demanding more purpose-built offerings engineered to deliver specific business outcomes."

The public cloud market leaders look set to continue consolidating their dominance, with Gartner expecting the top 10 providers to account for nearly 70 per cent of the IaaS market by 2021, up from 50 per cent in 2016.

"The increasing dominance of the hyperscale IaaS providers creates both enormous opportunities and challenges for end users and other market participants," said Nag.

"While it enables efficiencies and cost benefits, organizations need to be cautious about IaaS providers potentially gaining unchecked influence over customers and the market. In response to multicloud adoption trends, organisations will increasingly demand a simpler way to move workloads, applications and data across cloud providers' IaaS offerings without penalties," he added.

The Australian cloud spend will continue to rise next year, Gartner predicts, and hit the $5.455 million mark.

SaaS will continue to dominate, with revenues forecast to reachb $3.242 billion in 2019.

Copyright © 2018 IDG Communications, Inc.

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