Aussie public cloud services set to hit $4.6B this year

Aussie public cloud services set to hit $4.6B this year

The bulk of the Australian public cloud services spending this year is expected to be on software-as-a-service

Spending on public cloud services in Australia is expected to grow by 18.5 per cent year-on-year in 2018, reaching A$4.6 billion, according to the latest figures by industry analyst firm, Gartner.

The bulk of the Australian public cloud services spending this year is expected to be on software-as-a-service (SaaS), which is also the fastest growing segment at 24.4 per cent in 2018.

The Australian public cloud services spending growth forecasted by Gartner is markedly below the 21.4 per cent global figure forecasted by the analyst firm, with the worldwide public cloud services market spend set to hit US$186.4 billion this year.

Globally, the fastest-growing segment of the market is cloud system infrastructure services -- infrastructure-as-a-service (IaaS) – which is forecast to grow 35.9 per cent in 2018 to reach US$40.8 billion, according to Gartner.

Software-as-a-service (SaaS), meanwhile, remains the largest segment of the cloud market – both globally and in Australia – with worldwide revenue from the segment expected to grow by 22.2 per cent to reach US$73.6 billion in 2018.

Indeed, Gartner expects SaaS to reach 45 per cent of total application software spending by 2021.

"In many areas, SaaS has become the preferred delivery model," Gartner research director, Sid Nag, said. "Now, SaaS users are increasingly demanding more purpose-built offerings engineered to deliver specific business outcomes."

Within the platform-as-a-service (PaaS) category, which is the second largest segment in terms of overall global spend, the fastest-growing sub-sector is database platform-as-a-service (dbPaaS). This subcategory is expected to reach almost US$10 billion by 2021, according to Gartner.

At the same time, the public cloud market leaders look set to continue consolidating their dominance, with Gartner expecting the top 10 providers to account for nearly 70 per cent of the IaaS market by 2021, up from 50 per cent in 2016.

"The increasing dominance of the hyper-scale IaaS providers creates both enormous opportunities and challenges for end users and other market participants," Nag said.

"While it enables efficiencies and cost benefits, organisations need to be cautious about IaaS providers potentially gaining unchecked influence over customers and the market,” he said.

Gartner said in October last year that it expected public cloud services revenue to reach A$5 billion in 2017 -- a figure that included cloud advertising revenue, which has since been removed from Gartner's public cloud services forecasts -- representing a 17.1 per cent increase on 2016’s AU$4.2 billion tally.

At the time, Gartner projected that worldwide public cloud services would grow by 18.5 per cent in 2017 to total US$260.2 billion, up from US$219.6 billion in 2016.

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