Australian organisations are rapidly embracing public cloud services, with spending expected to soar to A$23.3 billion in 2024, up 19.7 percent from last year, according to Gartner.
This cloud investment boom is fuelling innovation across the country, particularly in emerging areas such as generative AI (GenAI).
“Cloud services are fuelling innovation in emerging areas such as GenAI, which is finally starting to have an impact in Australia, Local CIOs were somewhat slow to invest but that’s changing as organisations now understand how the technology can benefit their operations,” said Michael Warrilow, VP Analyst of Gartner.
Infrastructure-as-a-service will see the largest growth at 24.5 percent, followed by platform-as-a-service at 22.4 percent, as businesses tap into the scalability and flexibility of the cloud to develop and deploy GenAI applications.
In Gartner’s annual CIO survey, 79 percent of Australian and New Zealand technology leaders expect to invest their second largest funding increase this year in cloud platforms, behind only cybersecurity.
“Despite the local cloud market showing no signs of slowing down, there’s increasing scrutiny from the business. CIOs need to invest in cloud financial management to ensure they don’t blow the budget,” said Warrilow.
SaaS dominates spending
Software-as-a-service (SaaS) will remain the largest cloud spending category in Australia at nearly A$11 billion in 2024, up 18.3 percent year-over-year. This is driven by the ongoing shift from traditional software to cloud-based business applications.
“Although it can provide many benefits, SaaS adoption isn’t always a choice. Many vendors have moved to cloud-only delivery models regardless of their customer’s preferences,” said Warrilow.
GenAI key driver
As GenAI capabilities continue evolving, Gartner expects it to become a key driver of future cloud demands in Australia, requiring new technologies, methodologies and skills.
“Australian CIOs must determine the best adoption model for their needs. If they don’t identify the potential value to their organisation, they risk over-investing,” said Warrilow.
While spending on GenAI will primarily be incorporated into existing IT budgets long-term, the surge in cloud investment is empowering Australian businesses to innovate with cutting-edge technologies like never before.
Entelechy Asia 