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Public cloud services spending to reach half of Aussie market in 2024

Public cloud services spending to reach half of Aussie market in 2024

Australian organisations expected to spend $23.2 billion on public cloud services next year.

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Australia is set to hit 50 per cent of its total public cloud services market for the first time in 2024. 

According to new figures from Gartner, Australian organisations are expected to spend $23.2 billion on public cloud services in 2024, up 19.3 per cent from 2023. 

All segments of the cloud market are expected to see growth in 2024, the global analyst claimed. Infrastructure-as-a-service (IaaS) is forecast to experience the highest growth at 24.6 per cent, followed by platform-as-a-service (PaaS) at 22.7 per cent. 

According to Michael Warrilow, research vice president at Gartner, this growth is due to the continued growth in adoption of IaaS and PaaS, and the infrastructure required to support the rapid uptake of artificial intelligence. 

Indeed, AI is set to maintain its hold on the technology industry next year and into the short-term future, according to research firm Gartner’s top 10 trends for 2024.  

Among the firm’s list, four of the spots went to AI-related areas. The first is democratised generative AI (genAI), which Gartner said has come about due to the confluence of massively pre-trained models, cloud computing and open source. 

“However,” Warrilow said, “most Australian organisations remain immature in how they manage the cost of cloud. In 2024, CFOs are going to put much greater scrutiny on continuing rapid growth in cloud spend.” 

Meanwhile, globally, end-user spending on public cloud services is expected to grow 20.4 per cent to a total US$678.8 billion in 2024, up from US$563.6 billion in 2023. 

“Cloud has become essentially indispensable,” said Sid Nag, vice president analyst at Gartner. “However, that doesn’t mean cloud innovation can stop or even slow. The tables are turning for cloud providers as cloud models no longer drive business outcomes, but rather, business outcomes shape cloud models.” 

“For example, organisations deploying generative AI (GenAI) services will look to the public cloud, given the scale of the infrastructure required,” said Nag. “However, to deploy GenAI effectively, these organisations will require cloud providers to address nontechnical issues related to cost, economics, sovereignty, privacy and sustainability. Hyperscalers that support these needs will be able to capture a brand-new revenue opportunity as GenAI adoption grows.”  

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