Gartner Forecasts Australian Public Cloud End-User Spending to Grow 18.2% in 2021

18 November 2020 — Worldwide end-user spending on public cloud services is forecast to grow 18.4% in 2021 to total $304.9 billion, up from $257.5 billion in 2020, according to Gartner, Inc.

Australian organisations are expected to spend almost A$10.4 billion on public cloud services in 2021, up 18.2% from this year. Growth in 2020 is expected to be 10.3%. 

“The pandemic validated cloud’s value proposition,” said Sid Nag, research vice president at Gartner. “The ability to use on-demand, scalable cloud models to achieve cost efficiency and business continuity is providing the impetus for organisations to rapidly accelerate their digital business transformation plans. The increased use of public cloud services has reinforced cloud adoption to be the ‘new normal,’ now more than ever.”

The proportion of IT spending that is shifting to cloud will accelerate in the aftermath of the COVID-19 crisis, with cloud projected to make up 14.2% of the total global enterprise IT spending market in 2024, up from 9.1% in 2020.

Although software as a service (SaaS) remains the largest market segment and is forecast to grow to $117.7 billion in 2021, application infrastructure services (PaaS) is anticipated to grow by a higher margin at 26.6% (see Table 1). The increased consumption of PaaS is driven by the need for remote workers to have access to high performing, content-rich and scalable infrastructure to perform their duties, which largely comes in the form of modernised and cloud-native applications. 
 

“The COVID-19 pandemic forced organisations to quickly focus on three priorities: preserve cash and optimise IT costs, support and secure a remote workforce, and ensure resiliency,” said Mr. Nag. “Investing in cloud became a convenient means to address all three of these needs.”

In fact, recent Gartner survey data indicates that almost 70% of organisations using cloud services today plan to increase their cloud spending in the wake of the disruption caused by COVID-19.

As enterprises increase investments in mobility, collaboration, and other remote working technologies and infrastructure, Gartner expects growth in public cloud to be sustained through 2024. The rising trend of cloud service providers partnering with telecommunications companies to extend their reach into the edge and support a hybrid workforce may also lead to further market growth. 

“As CIOs think more strategically about how to lay the foundations to support a return to growth, it is clear that the move to digital and associated services will play a big role for organisations in the future,” said Mr Nag. “Cloud adoption therefore becomes a significant means to stay ahead in a post-COVID-19 world focused on agility and digital touchpoints.”

Gartner clients can read more in the report "Forecast: Public Cloud Services, Worldwide, 2018-2024, 3Q20 Update." Learn more about how to Reset your business strategy section on gartner.com. Complimentary research, insights and webinars are offered to help leaders build resilience on their path to business recovery. 

Learn more about how to lead organisations through the disruption of coronavirus in the Gartner coronavirus resource centre, a collection of complimentary Gartner research and webinars to help organisations respond, manage and prepare for the rapid spread and global impact of COVID-19.

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