Australian enterprises are set to pour nearly $26.6 billion into public cloud services in 2025, marking a robust 18.9% year-on-year jump, according to new projections by Gartner. The surge reflects an escalating demand for cloud-native innovation, especially as companies embrace generative AI and modernise legacy systems.
Infrastructure-as-a-Service (IaaS) is poised for the sharpest growth at 24.2%, followed by Platform-as-a-Service (PaaS) at 21.1%. Meanwhile, Software-as-a-Service (SaaS) remains dominant, with spending projected to reach $13 billion—fueled by deeper application functionality and AI integrations.
Yet, despite this momentum, analysts warn that cost blowouts and operational complexity are growing concerns, particularly as organisations scale AI workloads. Gartner analysts Adrian Wong and Hardeep Singh noted that many CIOs now face a critical need to refine cloud strategies—focusing not just on agility and speed, but on clear ROI and resilience amid global economic uncertainty.
Trade tensions and supply chain disruptions may slightly temper new investments, especially in data center expansion. However, with multi-year contracts anchoring much of today’s cloud spend, underlying market confidence remains strong.
In short, cloud remains central to digital transformation—but in 2025, value-driven strategy will be as important as technical scalability.
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