TALKING POINT
GARTNER FORECASTS AUSTRALIAN ORGANISATIONS WILL SPEND MORE THAN AU $ 33 BILLION ON PUBLIC CLOUD IN 2026
Software-as-a-Service( SaaS) remains the largest spending category for Australian organisations in 2026, forecast to reach almost AU $ 16.4 billion. 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.
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, a business and technology insights company. Spending on Infrastructure-as-a-Service( IaaS) will see the largest growth with an increase of 24.1 %, 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.
“ The increasing focus on cloud efficiency this year is also underpinning AI infrastructure strategies,” said Wong.“ There’ s a shift towards inference-optimised approaches as organisations finetune 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.”
As Australian organisations continue to scale their AI ambitions, cloud investment is increasingly being shaped by the need for flexibility, efficiency and measurable business outcomes. The growing adoption of hybrid cloud models, combined with demand for AI-ready infrastructure and specialised platforms, highlights how cloud services are evolving from a supporting technology into a core foundation for enterprise innovation, automation and long-term competitiveness. •
“ 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,” said Wong.
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