Gartner Forecasts Australian Organisations Will Spend More Than A$33 Billion on Public Cloud in 2026

Sydney, 11 May 2026 - Australian organisations are expected to spend more than A$33.6 billion on public cloud services in 2026, an increase of 17.9% from 2025, according to the latest forecast from Gartner, Inc., a business and technology insights company. followed by platform-as-a-service (PaaS) at 20.9%.

"AI‑driven demand for high‑performance cloud infrastructure is changing how Australian organisations are prioritising cloud spending this year," said Adrian Wong, Director Analyst at Gartner.

"While AI compute demands are driving rapid IaaS growth, the ultimate goal for Australian organisations is business value. As the market shifts from early AI experimentation to real-time inference and agentic AI, organisations are relying heavily on robust PaaS environments to manage autonomous workflows and integrate them into core applications."

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

Software-as-a-service (SaaS) remains the largest spending category for Australian organisations in 2026, forecast to reach almost A$16.4 billion (see Table 1). This 13.8% increase marks slower growth over 2025 as the market matures, with organisations prioritising license optimisation, slower seat growth and tighter application portfolio scrutiny.

"The increasing focus on cloud efficiency this year is also underpinning AI infrastructure strategies," said Wong. "There's a shift toward inference-optimised approaches as organisations fine-tune smaller domain-specific models instead of relying on larger general purpose LLMs. Many are turning to hybrid cloud architectures to push this processing to the edge, which lowers cloud costs while still supporting automation at scale."

Gartner clients can read more in the report Forecast: Public Cloud Services, Worldwide, 2024-2030, 1Q26 Update.

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

Gartner IT Infrastructure, Operations & Cloud Strategies Conference

Gartner analysts are presenting the latest insights on cloud strategies, infrastructure and operations trends at the Gartner IT Infrastructure, Operations & Cloud Strategies Conference in Sydney this week. Upcoming dates and locations are June 1-2 in Mumbai, November 16-17 in London, December 1-3 in Tokyo and December 8-10 in Las Vegas. Follow news and updates from these conferences on X and LinkedIn using #GartnerIO.

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