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Aussie spending on public cloud services to hit $5.6B by 2019

Aussie spending on public cloud services to hit $5.6B by 2019

Spending on SaaS accounts for more than half of investments

Credit: Dreamstime

Australian businesses are expected to spend $5.6 billion on public cloud services in 2019, with the market set to experience 20.3 per cent year-on-year growth.

Coming in higher that the global average of 17.3 per cent, Gartner findings indicate a local market growing at pace, driven by increased investments on software-as-a-service (SaaS).

Specifically, spending on SaaS - spanning cloud application services - will reach $3.2 billion across the industry, while cloud business process services (BPaaS) will total just over $1 billion within the next 12 months.

Delving deeper, cloud infrastructure services (IaaS), cloud management and security services and cloud application infrastructure services (PaaS) are forecast to amount to $650 million, $330 million and $300 million respectively.

Compared globally, the worldwide public cloud services market is projected to total US$206.2 billion within the next year, up from US$175.8 billion in 2018.

The fastest-growing segment of the wider market is IaaS, which is forecast to grow 27.6 per cent in 2019 to reach US$39.5 billion, up from $31 billion in 2018.

By 2022, Gartner expects that 90 per cent of organisations purchasing public cloud IaaS will do so from an integrated IaaS and PaaS provider, and will use both the IaaS and PaaS capabilities from that provider.

“Demand for integrated IaaS and PaaS offerings is driving the next wave of cloud infrastructure adoption," said Sid Nag, research director at Gartner.

“We expect that IaaS-only cloud providers will continue to exist in the future, but only as niche players, as organisations will demand offerings with more breadth and depth for their hybrid environments.

“Already, strategic initiatives such as digital transformation projects resulting in the adoption of multi-cloud and hybrid cloud fuel the growth of the IaaS market.”

From a global standpoint, and in line with Australian dynamics, SaaS remains the largest segment of the cloud market, with revenue expected to grow 17.8 per cent to reach US$85.1 billion in 2019.

“The increasing adoption of SaaS applications and other cloud services impacts the management, dissemination and exploitation of enterprise content,” added Craig Roth, research vice president at Gartner. “Organisations are steadily - but not exclusively - shifting their content environments to SaaS.

“Gartner expects that by 2019, the current enterprise content management (ECM) market will devolve into purpose-built, cloud-based content solutions and solution services applications.”

In the BPaaS category, Gartner forecasts a revenue growth of 7.9 per cent, to reach US$50.3 billion in 2019.

“Especially in this category, buyers increasingly expect deep domain expertise, technology and global deployment capabilities from their providers as well as service portfolios that bridge legacy offerings and support new automated, digital and cloud service delivery paradigms,” Roth added.


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