Spending on public cloud services in Australia is expected to be $18.7 billion in 2022, according to Gartner’s latest forecast representing a 31.8% growth compared to 2021’s $14.2 billion

Software as a Service (SaaS) accounts for almost half of the entire cloud market in Australia, but the fastest growing segments are Platform as a Service (PaaS) and Infrastructure as a Service (IaaS).

In January 2022, research firm GlobalData predicted that cloud computing spending would only exceed $20 billion by 2025; this includes public cloud services which represent 50% of the cloud computing market according to the GlobalData methodology. Despite their differences in spending pace, the two companies agree that PaaS will be the fastest growing public cloud service.

Sydney-based Gartner research vice president Michael Warrilow said the acceleration in cloud spending seen during the pandemic is expected to continue as organisations respond to a new business dynamic. 

Hyperscale service providers increased their presence in the region last year, such as Amazon Web Services (AWS) with new on-premises zones in Perth, Brisbane and Auckland, and the Microsoft Azure data center in New Zealand, adding to the three previously currently operating in Australia.

Globally, end-user spending on public cloud services is forecast to grow 20.4 per cent in 2022 to total US$494.7 billion, up from US$410.9 billion in 2021.

In 2023, Gartner anticipates end-user spending is expected to reach nearly US$600 billion while end-user demand for cloud capabilities is expected to account for the increase in PaaS spending to $109.6 billion.

Globally, infrastructure-as-a-service (IaaS) is forecast to experience the highest end user spending growth in 2022 at 30.6 per cent, followed by desktop-as-a-service (DaaS) at 26.6 per cent and platform-as-a-service (PaaS) at 26.1 per cent. 

“Cloud native capabilities such as containerisation, database platform-as-a-service (dbPaaS) and artificial intelligence/machine learning contain richer features than commoditised compute such as IaaS or network-as-a-service,” Gartner research vice president Sid Nag said.

“As a result, they are generally more expensive which is fuelling spending growth.”

In New Zealand, total spending on public cloud services is expected to reach NZ$2.58 billion in 2022, up 26.3% year-on-year. The fastest growing segments of the cloud market in 2022 are expected to be PaaS, followed by IaaS.

According to the Gartner 2022 CIO survey, 44% of CIOs in Australia and New Zealand had reserved cloud platforms for new or additional funding this year, ranking fourth behind cybersecurity, data and analytics, and integration technologies such as APIs

The new reality of hybrid work is pushing organisations to move away from feeding their workforce with traditional client computing solutions, such as desktops, to DaaS, which is driving spending to reach $ 2.6 billion in 2022.