Forrester: Hybrid now dominant cloud model in ANZ

Research firm Forrester has found that while public cloud remains central to digital transformation and AI adoption, 93% of Australian enterprises now describe their cloud strategy as hybrid, reflecting a growing shift toward distributing workloads across public cloud, private cloud, colocation, and sovereign environments.

The company's latest report, The State of Cloud in Australia and New Zealand 2026, stated that 88% of respondents are already leveraging cloud-native technologies outside public cloud environments.

Organisations are increasingly adopting a "right workload, right place" approach, placing applications and data where they can best balance performance, security, sovereignty, cost, and business requirements rather than pursuing a one-way migration strategy to public cloud, the report found.

Forrester also said that Australian organisations continue to use public cloud primarily to rapidly procure new services (44%), access specialised infrastructure and services (40%), and modernise applications (35%). 

Digital sovereignty is now a major consideration for cloud strategy, with 66% of Australian enterprise cloud decision-makers saying it completely influences their cloud vendor selection. Enhanced privacy regulations, stronger governance expectations, and mandatory sustainability reporting requirements are increasing demand for auditable, in-country, and sovereign cloud capabilities across both public and private sector organisations, the report found.

Organisations are also moving beyond cloud migration and focusing on operational excellence, with nearly 4 in 5 Australian enterprises (78%) report having an established FinOps practice, while many are investing in platform teams, cloud centres of excellence, automation, observability, resilience improvements, and stronger data governance capabilities to improve operational outcomes and manage cloud spending more effectively.

Among organisations that actively address cloud resilience, 49% use disaster recovery failover between public cloud and private data centres, while 47% use multicloud failover across providers - statistics thst Forrester say reflects growing attention to operational continuity, vendor lock-in risks, and long-term cloud flexibility.

"AI is increasingly becoming a default enterprise workload, but organisations cannot treat cloud strategy as a one-way journey toward hyperscale environments,” said Sam Higgins, VP and principal analyst at Forrester, said.

“The most successful firms are adopting hybrid-first architectures that allow workloads to be deployed where they deliver the greatest business value while maintaining flexibility, compliance, resilience, and operational control.

“As regulatory expectations rise and vendor dynamics continue to evolve, enterprises should focus on building AI-ready platforms, strengthening FinOps capabilities, improving resilience, and ensuring workload portability to maximise innovation while limiting risk and cost."

Looking ahead, Forrester said it expects AI-native operating models, sovereign cloud requirements, and hybrid-by-design architectures to define the next phase of cloud evolution across Australia and New Zealand.