Gartner Forecasts Australian Public Cloud End-User Spending to Reach $26.6 Billion in 2025

SYDNEY, Australia, May 14, 2025 — Australian organisations are expected to spend nearly A$26.6 billion on public cloud services in 2025, an increase of 18.9% from 2024, according to the latest forecast from Gartner, Inc. Spending on infrastructure-as-a-service (IaaS) will see the largest growth with an increase of 24.2%, followed by platform-as-a-service (PaaS) at 21.1%.

"Public cloud services continue to be a critical driver of innovation across Australian organisations this year," said Adrian Wong, Director Analyst at Gartner. "As momentum continues, many organisations are facing higher than expected costs and complex management issues, especially when it comes to scaling AI initiatives. To deliver value, CIOs need a sharper cloud strategy, one that prioritises return on investment but also keeps pace with rapid technology shifts." 

Gartner analysts are exploring how infrastructure and operations leaders can advance their cloud strategies at the Gartner IT Infrastructure, Operations & Cloud Strategies Conference in Sydney this week.

In Gartner's annual global survey of 3,186 of CIOs and technology executives, including 109 from Australia and New Zealand (ANZ), 83% of ANZ CIOs said cloud platforms remain one of the top technology investments in 2025, behind cybersecurity and data analytics. 

All Cloud Segments to Experience Double Digit Growth 

Software-as-a-service (SaaS) remains the largest end-user spending category in Australia, forecast to reach almost A$13 billion in 2025 (see Table 1). This 15.5% increase from 2024 is due to continued investments in cloud-based application software, driven by functional expansion and generative AI (GenAI) integration capabilities.

Table 1. Australian Public Cloud Services End-User Spending, 2024-2025 (Millions of AUD)

Source: Gartner (May 2025)

"Legacy modernisation, cost optimisation, and the adoption of AI-driven workloads continue to drive strong demand for cloud services," said Hardeep Singh, Principal Analyst at Gartner. "These factors are expected to sustain cloud growth, particularly as enterprises seek agility and scalability amid uncertainty this year, as trade restrictions and tariffs dampen business confidence and introduce greater unpredictability into short-term planning.

"While the situation continues to change, a lot of cloud spend is tied to multi-year annuity contracts with providers. Tariffs are more likely to affect input costs and disrupt supply chains for new or incremental cloud spending, rather than existing usage. This may lead to cautious spending by providers and delays in data centre expansions, prompting marginal adjustments to cloud spending projections. Despite this, the cloud market's underlying momentum remains intact."

Gartner clients can read more in the report Forecast: Public Cloud Services, Worldwide, 2023-2029, 1Q25 Update

Learn how to maximise the benefits of cloud computing in the complimentary Gartner ebook Devising an Effective Cloud Strategy. 

About Gartner IT Infrastructure, Operations & Cloud Strategies Conference 

Gartner analysts are presenting the latest research and advice for I&O leaders at the Gartner IT Infrastructure, Operations & Cloud Strategies Conference taking place in Sydney this week. Upcoming dates and locations for Gartner IT Infrastructure, Operations & Cloud Strategies Conferences are November 17-18 in London, December 3-5 in Tokyo and December 9-11 in Las Vegas. Follow news and updates from these conferences on X using #GartnerIO.

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