Analyst firm Gartner expects the amount Australian organisations will spend on public cloud services to rise 19.3 per cent over last year's figure, reaching $19.9 billion in 2023.
All cloud market segments are expected to grow, with infrastructure-as-a-service showing the highest increase at 30.2 per cent, followed by platform-as-a-service at 24 per cent.
“Cloud first policies continue to drive increased spending on cloud infrastructure in Australia in 2023,” Michael Warrilow, research vice president at Gartner said.
“In fact, IaaS remains a higher priority that most value-adding technologies – including artificial intelligence and machine learning," Warrilow added.
"That’s a trend that CFOs will only put up with for so long because cloud adoption must drive incremental business value," he said.
Worldwide, the public cloud services spending is showing a similar trend.
Gartner sees growth of 21.7 per cent year on year for 2023, reaching US$597.3 billion which is up from $491 billion in 2022.
Sid Nag, Gartner's vice president analyst, said hyperscalers are driving the cloud agenda.
“Organisations today view cloud as a highly strategic platform for digital transformation, which is requiring cloud providers to offer more sophisticated capabilities as the competition for digital services heats up," Nag said.
“For example, generative AI is supported by large language models (LLMs), which require powerful and highly scalable computing capabilities to process data in real-time,” Nag added.
“Cloud offers the perfect solution and platform. It is no coincidence that the key players in the generative AI race are cloud hyperscalers," he said.
The spending increase is forecast to continue in 2024, again with all segments showing an increase.
For 2024, Gartner sees the total cloud market growing to US$724.6 billion, with software as a service being the largest market segment.
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