Cloud services in Australia have already made a significant mark in the country. It has emerged as one of the major players in cloud infrastructure.

Australia’s cloud computing sector is experiencing unprecedented growth, with multiple industry forecasts pointing to explosive expansion across all service categories in 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 Gartner’s latest market analysis. The infrastructure-as-a-service (IaaS) segment is leading the charge with projected growth of 24.2%.

Australian organisations are forecast to spend more than A$33.6 billion on public cloud services in 2026, marking a 17.9 percent increase from 2025.

Market valuations vary across research firms, but the trajectory remains consistently bullish.

Australia’s cloud computing market is tipped to grow by 12.5% to reach $14.1bn in 2025, according to GlobalData, while other analysts project even higher figures.

The market was valued at AUD 18.07 billion in 2024 and is expected to maintain double-digit growth rates through the decade.

The public cloud segment dominates the landscape, with Software as a Service expected to dominate the market in Australia with a projected market volume of US$5.24bn in 2024.

Looking ahead, revenue in Australia is anticipated to show an annual growth rate (CAGR 2024-2029) of 18.53%, which will result in a market volume of US$29.67bn by 2029.

The growth surge comes amid major infrastructure investments from global tech giants. Microsoft announced a AUS$ 5 billion investment to expand cloud computing and AI infrastructure in Australia by 2025, positioning the country as a strategic Asia-Pacific hub for cloud services.

Industry analysts attribute the rapid expansion to accelerated digital transformation initiatives following pandemic-driven operational challenges, with businesses across sectors migrating critical workloads to cloud platforms for enhanced scalability and resilience.

Use cases for Australian cloud computing services

Across industries, the variety of cloud services and their particular uses are of interest. The information, media, and telecommunications sector is currently the greatest consumer of cloud services, with 64% of firms in this sector adopting them in 2017-18 (ABS, 2019).

Among the biggest consumers of cloud services are the professional, scientific, and technical services, financial and insurance businesses, and mining companies.

Around a third of companies in the agriculture, forestry, and fishing, and transportation, shipping, and warehousing industries are currently using cloud services. Even if current applications aren’t as important for their work, they may begin to be in the future.

The demand for cloud services in Australia

The demand for cloud services in Australia has risen steadily over the past few years. The main reason behind this is the increasing need for e-commerce in the country.

Many business operators now rely on the internet in order to boost their sales. With the use of cloud technology, these businesses will not have to spend more on internet connection bills because they will be able to purchase the products they need from online vendors.

Businesses operating in Australia can benefit from managed cloud services because it allows them to eliminate several costs. Cloud computing involves using virtualisation technologies to divide server tasks among different servers. For instance, a single server may be used to serve requests from various departments.

In this case, the costs incurred for managing the resources will be divided among the several companies involved. Managing infrastructure in this manner allows users to control costs related to hardware, software, and other necessities.

Infrastructure management is one of the most important benefits provided by managed cloud computing. This method allows businesses to control their own IT infrastructure because they will only pay for the resources that their business needs.

Cloud technology provides the capability of improving IT infrastructure and automating processes because it is inherently scalable and elastic. This characteristic enables it to coordinate and integrate with other internet applications and services.

Total addressable market size for cloud services in Australia

By 2025, the enterprise spending opportunity for cloud services in Australia, in terms of addressable market size, is expected to reach US$14.1bn, driven by large-scale digital transformation initiatives taken up by businesses to counter pandemic-related operational issues.

Public Cloud

In a nutshell, Public Cloud is an IT model in which a third-party service provider manages on-demand web infrastructure and computing resources and is then shared with various other companies using the public Internet.

Public cloud services providers can also provide hosted services like infrastructure as service (IaaS) or platform as service (PaaS) to customers for a pay-per use or monthly fee.

Public Cloud is gaining more popularity in the enterprise world, as it provides a cost effective and convenient option to large companies and businesses as it reduces operational costs, which in turn leads to increased revenues.

The public cloud concept was initially adopted in Australia as it has a very limited set of regulations that are less demanding compared to other clouds. This made it a very attractive option for enterprises in Australia as compared to other cloud providers.

A typical public cloud provider offers a wide array of software development and server management solutions as well as virtualisation, infrastructure management, software applications, application development, business intelligence, and business process integration.

As a matter of fact, Australia’s cloud market is now being considered as an alternative to the traditional private cloud, due to the lower costs and improved efficiency.

Benefits

There are several benefits of a public cloud deployment. The first one is that it eliminates the need for costly on-premises software and it also reduces the overall expenditure, maintenance, and deployment costs of an organisation.

Another benefit is that it is scalable; therefore, it can be used by organisations with minimal IT expertise, thus reducing capital expenditure involved. It can help enterprises make the most of their computing resources and reduces overall expenditure.

Moreover, it can be leveraged by organisations across different verticals and can deliver greater return on investment. It also provides flexible infrastructure options, easy access to application development tools, easy collaboration with other companies and greater control over the information.

• 1. Eliminates costs
• 2. Eliminates on premises software
• 3. Reduces maintenance
• 4. Leveraged across verticals
• 5. Greater return on investment
• 6. Flexible infrastructure options
• 7. Easy application access
• 8. Easy collaboration
• 9. Greater information control

Hybrid Cloud

Hybrid cloud is a cloud computing environment which utilises a combination of public, off-site and on-demand, third-party and hybrid clouds with dedicated orchestration between all three platforms.

The aim of hybrid cloud is to quickly and reliably move workloads from one platform to another with the advantages of each. Hybrid cloud offers the benefits of on-demand and on-site solutions as well as the flexibility of private clouds.

With hybrid cloud services, users have access to a platform which is based on their requirements. This reduces the time to market for new application applications and maximises the time spent on application development while reducing IT costs.

Hybrid Cloud also allows businesses to test new software in real environments and to make changes to the infrastructure without affecting the business’s current availability and helps businesses to rapidly implement software improvements.

Businesses

Businesses may utilise either on-site or off-site computing resources. In on-site computing, resources like servers, network equipment and computer racks are located on-site. These are used to support client applications and web based services.

Off-site computing is storage, data handling, telephony, internet access and other hardware that are located off the premises of the client. This can include things like printed materials, fax machines and mobile devices. Hybrid solutions in Australia can reduce costs in these circumstances.

Hybrid Cloud helps businesses achieve greater flexibility by allowing them to deploy, manage and monitor their applications and infrastructure more efficiently.

With Hybrid Cloud there is greater consistency between applications and infrastructure. The use of virtualisation also reduces the cost of deployment. Virtual server execution in a virtual environment reduces capital expenditure required for setting up a consistent high quality solution.

Businesses which have a large need for on-site storage will find that they can save a lot of money using hybrid cloud solutions.

With on-site storage, a business can avoid the high costs of expensive on-site storage solutions and the additional maintenance, cleaning and repairs that this involves.

By using hybrid cloud services, companies can eliminate this cost and the associated costs of maintaining a physical infrastructure. Using virtualisation, all the data centres can be redundant, reducing capital expenditure and further reducing the risk associated with system downtime.

Enterprises

Enterprises can also make savings by deploying their applications and infrastructure in a data centre of their own.

If a business buys a complete private cloud solution, they will be able to manage their own resources and do away with the need for third party application vendors and service providers. This helps them cut down on the high cost of maintaining a data centre.

Hybrid cloud technology makes it easier for businesses to achieve scalability and flexibility while maintaining low costs. This kind of cloud solution is highly flexible, making it easy to tailor the use of the resources to the needs of individual businesses.

Private Cloud

Private Cloud is one of the newest buzzwords around the tech world. In an effort to stay ahead of the regulatory agencies that are constantly making changes to regulations that allow for new types of Cloud, some businesses are moving away from public clouds in favour of a private cloud.

Private Cloud in Australia is the most cost effective way to enhance the current infrastructure. It is also one of the most reliable ways to bring down your overall infrastructure investments.

Whether you are looking for a complete data centre solution or just want to take advantage of the flexibility of a self hosted appliance, choosing a private network is the best way to go.

Many businesses that are planning to use IT infrastructure and software solutions in Australia do not have the budget to purchase their own premises and equipment.

The likes of Facebook and Google have cloud services that they offer to the public. However, these services are not available in all the countries where there is a lack of infrastructure.

Businesses in Australia have no choice but to resort to using external solutions to help them implement their business plans. Private cloud adoption in Australia has brought about major changes in the telecommunications sector.

Private Cloud has brought about major transformation in the way telecommunication infrastructures are implemented in Australia.

Through private cloud computing services, companies in Australia are able to access the same powerful infrastructure as multinational corporations around the world.

Companies that make use of cloud services for managing their telecommunication infrastructures also enjoy increased employee productivity, better data security, better mobility options, and better response from their customers

Advantages of cloud computing

The main advantage of using a private cloud solution is that it allows access to sensitive data by restricted users or companies.

Companies with massive data centres can also reduce operational costs since they don’t need to pay for expensive computing infrastructure such as servers or network devices. On-site hardware installation is less expensive, which translates to better capital expenditure.

Private Cloud can provide a scalable platform for both small and large enterprises. With on-site setup of hardware and software, a private cloud computing system can provide superior scalability. This means that a business enterprise can effectively increase its capability by the addition of additional virtual servers.

Benefits

• Ensuring business continuity
• Geographic availability
• Security & privacy
• Customisation
• Compliance

If you are not familiar with these Cloud services than it might be helpful to learn more about them so you can evaluate your business’ options for going completely off-site with Microsoft technologies.

When you go completely on-site with a Cloud platform your business will benefit in several ways including a reduced need for man-power, reduced need for expensive infrastructure, a simplified maintenance process, higher operational efficiency and more.

Cloud services will enable you to utilise the capabilities and features of the Microsoft technologies while being able to retain some of the on-site conveniences including desktop computers and printers.

By utilising the on-site and remote capabilities of the platform, you will not only save a significant amount of money but you will increase productivity and enhance the overall experience of your staff.

Top Managed Services Providers in Australia 2026

Cloud Services for MSPs

With the introduction of Cloud services for MSPs, companies across Australia have begun exploring options to manage their business infrastructure more effectively.

The Cloud was a paradigm shift towards the distributed systems model. It provided an approach that was more flexible, elastic and manageable than the traditional software models. Managing infrastructure became easier with Cloud services for MSPs.

With a Cloud data management strategy, you can be sure that your business is well protected against external threats, increasing productivity, reducing costs and enhancing customer relations.

Cloud data services providers in Australia offer the following Cloud services for MSPs:

• Web based application and design
• Advanced database and data warehouse management
• Integrated ERP and CMS solution
• Scalable and high-performance user interface development
• Custom web development and management solution
• Advanced security solutions including application security, authorization, monitoring, and control
• Flexibility with easy scalability
• Enterprise resource planning (ERP) support and management
• Technical cloud services for MSPs

There are other benefits as well. For example, you get a professional workforce with highly skilled professionals who are trained in deploying and managing Cloud applications. This reduces costs and the time required for deploying applications and it also increases employee productivity. This reduces the overall operational cost.

Companies that offer Cloud services for MSPs are aware of the challenges that are faced by them in deploying Cloud applications.

A Cloud provider always designs their offerings in a way that is easy to deploy and use. Thus, they face fewer issues and their customers can gain maximum advantage from the deployment of their Cloud applications.

It also allows them to make the most of the benefits offered by Cloud technology. In addition to all these advantages, the users are also provided with significant time savings and cost saving.

Cloud Services Providers

With so many cloud services providers in Australia it has become difficult to choose a vendor that is both suitable to your business needs and affordable.

While there are many vendors in the market, only some of them have the expertise, resources and vision to match the growing demand of today’s business market.

A highly experienced company such as Kaspersky Lab with its many years of industry experience is one such cloud services provider that can deliver your business data and applications securely and efficiently.

The company has been in the market for many years and continues to expand its suite of products and services that help businesses manage their cloud infrastructure and keep their business information at safe levels.

Australia’s cloud services journey

Cloud services have become a poweful force for driving Australian businesses in the last five years. Cloud technology is altering business models, enabling more dynamic and innovative working methods, and unlocking future technologies such as artificial intelligence, the Internet of Things, and robotics.

Businesses have been using cloud services in a new way over the past few years, rather than just using them for hosting and storing data (AWS, 2018).

‘On the cloud’ has been a phrase used for over 20 years to describe distributed computing. Businesses are now operating ‘in the cloud’ by using cloud-native applications and on-demand computing power (AWS, 2018).

In addition, there is now a new type of business that is redesigning and fine-tuning its operation around cloud services.

Despite the rapid increase in paid cloud computing among businesses in Australia over the last five years (ABS 2019), it remains in its infancy (ABS 2019).

According to Deloitte Access Economics (2018), 57% of cloud users have been using it for less than three years. Cloud services have been adopted at a slower rate than anticipated, providing a lot of room for businesses to adopt these technologies as well as to enhance their sophistication.

What’s Next: The Future of Cloud Services in Australia

As the market matures beyond its explosive growth phase, several transformative trends are reshaping Australia’s cloud landscape through 2026 and beyond.

AI-Powered Cloud Integration is emerging as the dominant force, with 60% of organisations expected to adopt AI-powered features by 2026.

Cloud providers are rapidly integrating artificial intelligence capabilities into their core services, enabling businesses to deploy intelligent applications without requiring specialized AI expertise.

Edge Computing Expansion represents the next frontier, with AI models increasingly running on edge devices, enabling real-time analytics and insights.

This shift is particularly crucial for healthcare and manufacturing sectors where immediate data processing capabilities provide competitive advantages. The number of edge data centers is expected to grow to 1,200 by 2026, compared to just under 250 centers in 2022.

Sovereign Cloud Capabilities are becoming a strategic imperative for Australia. AWS’s landmark partnership to establish a sovereign TS Cloud in Australia will generate up to 2,000 local jobs, while SAP has expanded Australian Sovereign Cloud capabilities to meet data sovereignty requirements of government and highly regulated industries.

Multi-Cloud and Hybrid Strategies are gaining momentum as companies leverage these models to distribute workloads across various cloud platforms, ensuring flexibility, minimising costs, and enhancing data security.

Australian enterprises are moving beyond single-provider dependencies toward sophisticated orchestration across multiple cloud environments.

ADAPT research indicates that 55% of workloads overall will be in public clouds by end 2025, with larger organisations particularly committed to cloud strategies, setting the stage for Australia to emerge as a regional cloud powerhouse by decade’s end.

The Global Cloud Services Market

The global cloud services market has experienced explosive growth over the past decade, driven by digital transformation initiatives, remote work adoption, and the need for scalable computing resources.

Market research indicates the worldwide public cloud services market is projected to reach $679 billion by 2024, representing a compound annual growth rate exceeding 15%.

Major cloud providers including Amazon Web Services, Microsoft Azure, Google Cloud Platform, and Alibaba Cloud dominate the landscape, controlling approximately 70% of the global market share.

The sector continues to consolidate around these key players while smaller providers focus on specialised services or regional markets.

Enterprise adoption has accelerated dramatically, with over 90% of organizations now utilizing cloud services in some capacity.

The pandemic catalysed this shift as businesses required immediate access to remote collaboration tools, scalable computing power, and flexible infrastructure to support distributed workforces.

2026 Update: Managed Services and MSPs in Australia

Australia’s managed services market continues to expand in 2026 as organisations accelerate cloud adoption, strengthen cyber defences and integrate artificial intelligence into everyday operations.

Businesses are increasingly relying on managed service providers (MSPs) to reduce operational costs, improve resilience and address an ongoing shortage of skilled IT professionals.

Industry analysts estimate Australia’s managed services market is now worth about A$18.7 billion, growing at an annual rate of 7.8%.

The broader Australian IT services market is forecast to reach US$38.3 billion (A$58.8 billion) during 2026, with growth approaching 18.9% annually as government and private-sector digital transformation projects continue to expand.

Cybersecurity remains the strongest growth driver for Australian MSPs. High-profile ransomware attacks, mandatory cyber reporting requirements and stricter governance obligations have pushed organisations to outsource security operations.

Security services, managed detection and response (MDR), endpoint protection and Security Operations Centre (SOC) services are now among the fastest-growing managed offerings.

Artificial intelligence has also become a defining feature of the Australian MSP market during 2026. Rather than replacing IT staff, AI is being deployed to automate routine support, improve ticket resolution, identify infrastructure faults before outages occur and assist with security monitoring.

Predictive analytics and AI-powered automation are allowing MSPs to deliver faster response times while reducing operational costs.

Cloud management continues to dominate customer demand. Australian organisations are increasingly operating hybrid and multi-cloud environments across Microsoft Azure, Amazon Web Services and Google Cloud.

Managing these increasingly complex environments has created sustained demand for MSPs capable of delivering cloud optimisation, governance, cost management and compliance services.

Skills shortages continue to reshape the sector. Australia’s limited supply of experienced cybersecurity specialists, cloud architects and AI engineers has encouraged more businesses to outsource IT operations rather than build internal teams.

Gartner estimates that by 2027, around 65% of mid-market organisations globally will rely on an MSP for at least one critical IT function, a trend already reflected across Australia’s medium-sized business sector.

Pricing has also evolved during 2026. Comprehensive managed IT services for a 100-user Australian business typically range between A$150 and A$250 per user per month, covering help desk support, cybersecurity, infrastructure monitoring, cloud management, backup and disaster recovery

Globally, the managed services industry is projected to grow from approximately US$460.6 billion in 2026 to more than US$705 billion by 2031, representing a compound annual growth rate of 8.9%.

Australia’s market is expected to outpace many developed economies as demand continues to rise across healthcare, financial services, education, manufacturing and government.

The role of MSPs has shifted well beyond traditional help desk support. Customers increasingly expect providers to deliver strategic technology advice, regulatory compliance expertise, cyber resilience, AI integration and measurable business outcomes.

Providers unable to differentiate beyond commodity infrastructure management are facing growing pricing pressure, while those investing in automation, cybersecurity and advisory services are capturing higher-value contracts and stronger long-term customer relationships.

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Extended Summary – The Bottom Line

Australia’s cloud trajectory signals a fundamental shift in how the nation approaches technology infrastructure and digital competitiveness.

With A$26.6 billion in public cloud spending projected for 2025 and double-digit growth rates extending through the decade, the country is positioning itself as a strategic technology hub for the Asia-Pacific region.

The convergence of AI integration, sovereign cloud capabilities, and edge computing expansion creates unprecedented opportunities for Australian businesses to compete globally while maintaining data sovereignty.

As major international providers commit billions in local infrastructure investment and the government prioritizes digital sovereignty, Australia appears poised to transform from a cloud consumer into a regional cloud leader.

For enterprise decision-makers, the message is clear: cloud adoption is no longer a question of if, but how quickly organizations can adapt their strategies to capitalize on this rapidly evolving landscape.

The companies that move decisively now will be best positioned to leverage Australia’s emerging status as a cloud powerhouse in the years ahead.