Australian IaaS market grew 20.76% in 2023: Gartner

Gartner research has revealed the Australian infrastructure as a service (IaaS) market grew 20.76 percent in 2023 to total AU$3.3 billion, up from AU$2.7 billion in 2022.

Among the top five Australian IaaS providers in 2023, the research found Microsoft overtook Amazon to claim leading position with 30.9 percent market share, followed by Amazon (30.1 percent), Google (20.6 percent), IBM (4.7 percent) and Oracle (2.4 percent).

By comparison, Gartner reported the global IaaS market grew 16.2 percent in 2023 to total US$140 billion, up from US$120 billion in 2022.

Amazon continued to lead the worldwide IaaS market with revenue of US$54.6 billion and 39 per cent market share, followed by Microsoft with 23 percent market share.

With growth of 26.3 percent in 2023, Google moved into the third position at 8.2 percent market share while Alibaba secured fourth spot with 7.9 percent of the market.

Worldwide IaaS public cloud services market share, 2022-2023 (Millions of US dollars)

Source: Gartner (July 2024)

“Cloud technologies continue to be a major business disruptor, due in part to the focus on hyperscalers looking to support offerings related to sovereignty, ethics, privacy and sustainability,” said Sid Nag, VP analyst at Gartner.

“This should continue to drive exponential growth into the future with these offerings being spurred by generative AI (GenAI) investments for 2024 and beyond.”

“As the top hyperscalers continue to grow their IaaS offerings in the shadow of GenAI, we should also see other areas, such as software-as-a-service (SaaS) and platform-as-a-service (PaaS), grow as well. IaaS is the tide that lifts all boats." 

Gartner said GenAI is beginning to have an impact on the growth of cloud markets, although AI-driven growth in 2023 was small.

“Cloud is the foundational and scalable substrate required to make GenAI a reality. The segments that are beginning to see the impacts of GenAI include IaaS, where AI model training is consuming IaaS resources, and SaaS where GenAI capabilities are beginning to be included in SaaS applications,” said Nag.

“Capacity demand in public cloud markets has already increased sharply as a result and will continue to do so through 2028. In the near term, AI-driven revenue growth will be small relative to the overall public cloud market.”