Australian IaaS market to hit $3bn by 2025

The Australian infrastructure-as-a-service (IaaS) market is on track to exceed $3 billion by 2025 as companies continue to pursue digital transformation and cloud-first policies, according to Telsyte.

The research firm estimates that Australian organisations spent $1.36 billion on IaaS in 2020, up 38% from 2019.

The total market is on track to grow a further 28% this year to $1.74 billion. Research found that more than half (51%) of businesses that have adopted cloud computing are planning to increase their cloud spending this year.

Meanwhile the COVID-19 pandemic has been accelerating the pace of digital transformation, with 33% of Australian businesses agreeing that the pandemic has been a key driver for their digital transformation strategies. Nearly half of businesses now have a cloud first policy.

The major hyperscale providers — AWS, Azure, Google, IBM, Oracle and Alibaba Cloud — continue to dominate the market, with a combined 85% share.

“The hyperscaler public clouds are consolidating their dominance in market by offering more complex services, such as machine learning, automation as well as a growing list of other services,” Telsyte Managing Director Foad Fadaghi said.

As a result, pure cloud and managed service provider delivery models now account for 55% of application workloads. Businesses have on average 3.3 public cloud services and 3.8 private cloud services in use, down from four in 2020.

Businesses are also increasingly embracing hybrid cloud models, with 65% having already done so and 85% intending to adopt or increase the use of such models.

Image credit: ©stock.adobe.com/au/AndSus