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27 Jan 2022

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Cloud spending increases in Australia as a result of digital transformation

Gartner forecasts that Australian technology spending will increase by 6.3 percent to $111 billion this year. According to analysts at GlobalData, cloud computing spending in Australia will reach $14.1 billion in 2025, as a result of large-scale digital transformation projects undertaken by businesses to combat pandemic-related operational concerns.

Gartner estimates that IT services will reach $39.2 billion this year, up 6.1 percent year over year. Spending on business and technology consulting is expected to reach $8.5 billion, up 8.3 percent.

Private and public

Both the private and public sectors in Australia are adopting the cloud, with municipal and city councils as well as federal government agencies migrating legacy applications to the cloud. Over the forecast period, public cloud services, including Software as Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS), will account for more than half of the total addressable market, with SaaS ranking highest overall.

Cloud-native application development

Saurabh Daga, Technology Analyst at GlobalData comments: “PaaS will be the fastest growing product and service segment over the forecast period. A key factor driving rapid growth in this segment is high enterprise preference for cloud-native application development platforms given their inherent cost advantage and better application management capabilities.”

Total spending

Daga concludes: “While the large (1,001-4,999 employees) & very large (5,000+ employees) enterprise segment will jointly account for the largest share of the total cloud computing spending in Australia through the forecast period, the combined spending from micro (1-50 employees), small (51-250 employees) and medium (251-1,000 employees) enterprises will increase at a marginally faster CAGR of 12.5% over the forecast period”. Gartner expects the vast majority of large organisations to use external consultants to develop their cloud strategy over the next few years.

Digital Business Plan

According to GlobalData, various Australian government digitalization initiatives, such as the Digital Business Plan and the Digital Business-to-Business Partnerships Initiative, will be key drivers of cloud services and platforms expenditures by SMEs in Australia.

Photo credit: Photoholgic

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