Australian appetite for cloud services surpasses global growth rate

Australian appetite for cloud services surpasses global growth rate

Gartner predicts Australia will spend $8.1 billion on cloud services in 2020

Credit: 143502696 © Leyn

Australian spending on public cloud services is expected to grow by 18.3 per cent year-on-year in 2020, outpacing the increase in global spending at 17 per cent year-on-year, according to data from Gartner. 

By the end of 2019, Australian organisations are expected to spend $6.6 billion on public cloud services, and the forecast increase of 18.3 per cent would see this figure increase to $8.1 billion in 2020. 

In comparison, the global figures expect an estimated US$227.8 billion by the end of 2019, which has been predicted to grow in 2020 by 17 per cent to US$266.4 billion. 

Out of all of the specific public cloud services in Australia, cloud application services are expected to see the most spending, with a predicted $4.3 billion in 2019 and $5.2 billion in 2020. 

Next comes cloud business process services, which is expected to see $877 million in 2019 and $908 million in 2020, followed by cloud system infrastructure services with $715 million expected in 2019 and $881 million in 2020. 

Cloud application infrastructure services is then predicted to see $584 million by the end of 2019 and $692 million by the end of 2020, with cloud management and security services coming in last for spending with $331 million forecast for 2019 and $380 million in 2020. 

Sig Nag, research vice president at Gartner said that at this point, cloud adoption is mainstream. 

“The expectations of the outcomes associated with cloud investments therefore are also higher. Adoption of next-generation solutions are almost always ‘cloud-enhanced’ solutions, meaning they build on the strengths of a cloud platform to deliver digital business capabilities,” Nag said. 

On the global scale for cloud spending in 2020, cloud application services are also expected to experience the most spending at US$116 billion, with cloud system infrastructure services in second at US$50 billion, cloud business process services at US$46.9 billion, cloud application infrastructures services at US$39.7 billion and then cloud management and security services at US$13.8 billion. 

The dominance of cloud application services, according to the research is due to the scalability of subscription-based software, while cloud system infrastructure services are expected to see the biggest year-on-year growth globally at 24 per cent due to demands of modern application and workloads, as they need infrastructure that traditional data centres cannot provide, according to Gartner. 

Nag added that building, implementing and maturing cloud strategies will “be a top priority for years to come”. 

“The cloud managed service landscape is becoming increasingly sophisticated and competitive. In fact, by 2022, up to 60 per cent of organisations will use an external service provider’s cloud managed service offering, which is double the percentage of organisations from 2018,” he said. 

“Cloud-native capabilities, application services, multicloud and hybrid cloud comprise a diverse cloud ecosystem that will be important differentiators for technology product managers. Demand for strategic cloud service outcomes signals an organisational shift toward digital business outcomes.”

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