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Depending on whose figures you believe, the cloud services market in Australia will be worth somewhere between $14 and $16.7 billion within the next couple of years, as strong growth in this sector continues. This is partly due to a long-term trend that has seen thousands of companies migrate their IT infrastructure and services to the cloud over the last decade and partly due to initiatives aimed at overcoming operational difficulties that arose during the recent pandemic.

But who are the main consumers of cloud services, and which Australian cloud providers are organizations choosing to host their data and applications? Below, we take a look at the current state of the Australian cloud market and consider how it may develop in the future.

Consumers of Cloud Services in Australia

According to research firm Gartner, cloud computing services will account for more than 45% of the corporate global IT spend in 2022. Gartner also predicts that this figure will be exceeded in Australia as companies increase spending on cloud services. It’s not just commercial organizations that are migrating their tech systems to the cloud: the public sector is also showing enthusiasm for adopting cloud services and infrastructure.

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Many city and municipal councils, along with a number of federal agencies, have chosen to migrate legacy applications to the cloud for cost and maintenance/flexibility reasons. Whatever the specific reasons motivating commercial and public sector organizations, it seems clear that this trend will only become stronger in the future.

Australian Cloud Service Providers

The big three hyper-scale cloud providers are all very active in the Australian market. Amazon Web Services, Microsoft Azure, and Google Cloud are among the most prominent and, together with Oracle, IBM, and Alibaba, account for roughly 85% of the current market by revenue.

There are also many smaller service providers offering scalable cloud solutions to SMEs in Australia, and there is a growing market for cloud migration support services: services designed to facilitate the migration process for both private and public sector organizations.

The Future of Cloud Services in Australia

The growing demand for low-maintenance, highly scalable, and flexible IT infrastructure is likely to continue driving the migration to the cloud in the coming years in all areas of the country. Although numerous organizations have already migrated their IT infrastructure, applications, and services to the cloud, many have yet to make a move, so the potential for future growth remains strong. It is estimated that 60-80% of business and public sector organizations in Australia are currently running critical applications in a hybrid environment, i.e., a combination of cloud and on-premises infrastructure.

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With this figure in mind, it is easy to see why cloud service providers remain very optimistic about future growth: the majority of these organizations are highly likely to move more of their critical applications and services to the cloud over the next few years.

For both government bodies and commercial enterprises, cloud service providers are likely to play an even bigger role in future IT systems development strategies.