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Public cloud services spending to hit $18.7B in Australia

Public cloud services spending to hit $18.7B in Australia

PaaS and IaaS are the fastest growing segments behind SaaS.

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End user spending on public cloud services in Australia is set to skyrocket to $18.7 billion in 2022, up 31.8 per cent from last year, according to analyst firm Gartner.

Software as-a-service (SaaS) accounts for almost half of the total cloud market in Australia, but the fastest growing segments are platform as-a-service (PaaS) and infrastructure as-a-service (IaaS).

Sydney-based Gartner research vice president Michael Warrilow said the acceleration in cloud spending seen during the pandemic is expected to continue as organisations respond to a new business dynamic. 

According to Gartner's 2022 CIO survey, 44 per cent of CIOs in Australia and New Zealand earmarked cloud platforms for new or additional funding this year, ranked fourth behind cybersecurity, data and analytics and integration technologies such as APIs.

In the past year, hyperscale providers have increased their presence in the region such as Amazon Web Services (AWS), with its new local zones in Perth, Brisbane and Auckland, and Microsoft’s Azure data centre development in New Zealand, adding to the three that are currently operating in Australia. 

Globally, end-user spending on public cloud services is forecast to grow 20.4 per cent in 2022 to total US$494.7 billion, up from US$410.9 billion in 2021.

In 2023, Gartner anticipates end-user spending is expected to reach nearly US$600 billion.

“Cloud native capabilities such as containerisation, database platform-as-a-service (dbPaaS) and artificial intelligence/machine learning contain richer features than commoditised compute such as IaaS or network-as-a-service,” Gartner research vice president Sid Nag said.

“As a result, they are generally more expensive which is fuelling spending growth.”

Globally, infrastructure-as-a-service (IaaS) is forecast to experience the highest end user spending growth in 2022 at 30.6 per cent, followed by desktop-as-a-service (DaaS) at 26.6 per cent and platform-as-a-service (PaaS) at 26.1 per cent. 

The new reality of hybrid work is prompting organisations to move away from powering their workforce with traditional client computing solutions, such as desktops towards DaaS, which is driving spending to reach US$2.6 billion in 2022. 

Demand for cloud-native capabilities by end-users is expected to account for PaaS growing to US$109.6 billion in spending.

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