The total addressable market size for cloud computing in Australia, in terms of enterprise spending opportunity, is poised to reach US$14.1bn in 2025, supported by large-scale digital transformation initiatives taken up by businesses to counter pandemic-related operational issues, forecasts GlobalData, a leading data and analytics company.

Saurabh Daga, Technology Analyst at GlobalData, comments: “Much like the rest of the world, Australian businesses witnessed COVID-19 pandemic-fueled rapid transformations, which included en masse adoption of remote work, automation of key business processes, and dependence on digital channels for customer interactions. Cloud-based platforms and services continue to be a key element of this ongoing transformation, thus driving the enterprise spending on cloud in the country to grow at 12.5% over the forecast period.”

Australia has witnessed cloud adoption in both private sector and public sector, with many of the government agencies including municipal & city councils as well as federal government agencies migrating their legacy applications to cloud.

In August 2021, Atos was awarded a three-year contract by Australia’s Digital Transformation Agency Cloud Marketplace to provide cloud services to Australia’s federal government agencies. Most recently, Australia’s criminal intelligence agency awarded an A$180m (US$129m) contract to upgrade its fingerprint system, which will see it being migrated to protected cloud platform.

Among cloud computing product/service segments, public cloud services, including software-as-a-service (SaaS), platform-as-a-service (PaaS) and Infrastructure-as-a-service (IaaS), account for more than 50% of the total addressable market over the forecast period, with SaaS being the largest category overall.

Daga adds: “PaaS will be the fastest growing product/service segment over the forecast period. A key factor driving rapid growth in this segment is high enterprise preference for cloud-native application development platforms given their inherent cost advantage and better application management capabilities.”

Hypercloud companies like Microsoft, Amazon Web Services (AWS) and Google have already established their cloud regions within Australia and are competing fiercely to dominate the market. While Google launched its second cloud region in Melbourne in 2021, Microsoft is currently planning a new cloud region in Sydney, which will be its fourth in the country. Recently, Microsoft in partnership with IT services provider Infosys had also entered into a multi-year strategic agreement with Ausgrid, an Australian utility provider, to modernize Ausgrid’s legacy applications and IT infrastructure through cloud management platform and managed services.

Daga concludes: “While the large (1,001-4,999 employees) & very large (5,000+ employees) enterprise segment will jointly account for largest share of the total cloud computing spending in Australia through the forecast period, the combined spending from micro (1-50 employees), small (51-250 employees) and medium (251-1,000 employees) enterprises will increase at a marginally faster CAGR of 12.5% over the forecast period.

“Various Australian government digitization initiatives such as Digital Business Plan, and Digital Business-to-Business (B2B) Partnerships Initiative will be the key growth driver for spending on cloud services & platforms by the SMEs in Australia.”