“Cloud services are fuelling innovation in emerging areas such as generative AI (GenAI), which is finally starting to have an impact in Australia,” said Michael Warrilow, VP Analyst at Gartner. “Local CIOs were somewhat slow to invest but that’s changing as organisations now understand how the technology can benefit their operations. Cloud will continue to be best suited for the delivery of GenAI-enabled applications at scale.”
Gartner analysts are exploring how infrastructure and operations leaders can advance their cloud strategies at the Gartner Gartner IT Infrastructure, Operations & Cloud Strategies Conference in Sydney this week.
In Gartner’s annual global survey of over 2,400 CIOs and technology executives, including 87 from Australia and New Zealand (ANZ), cloud platforms continue to be a top focus for ANZ CIOs in 2024 - with 79% expected to invest the second largest amount of new or additional technology funding on cloud platforms this year, behind cybersecurity.
“Despite the local cloud market showing no signs of slowing down, there’s increasing scrutiny from the business,” said Warrilow. “In many cases Australian organisations don’t yet have the discipline to deal with consumption-based cloud pricing. CIOs need to invest in cloud financial management to ensure they don't blow the budget.”
SaaS Remains Largest Spending Segment
Garter reports that software-as-a-service (SaaS) remains the largest end user spending category in Australia, forecast to reach almost A$11 billion in 2024 (see Table 1) - an an increase of 18.3% from 2023, driven by ongoing application modernisation as Australian organisations shift from software-based to cloud-based business applications.
“Although it can provide many benefits, SaaS adoption isn’t always a choice,” said Warrilow. “Many vendors have moved to cloud-only delivery models regardless of their customer’s preferences.”
Increasing Investment in GenAI
According to Gartner, GenAI is rapidly emerging as a key driver and differentiator of future cloud demands, with new technologies and methodologies to develop and operate infrastructure and platforms for it, such as AI chips, GenAI-enabled virtual assistants, prompt engineering and responsible AI.
“We’ll see similar patterns in Australia as GenAI capabilities continue to evolve,” said Warrilow. “Australian CIOs must determine the best adoption model for their needs, whether to build a model from scratch, or focus on AI capabilities being integrated into the applications they buy. If they don’t identify the potential value to their organisation, they risk over-investing.”
Gartner analysts said spending on GenAI will primarily be incorporated into enterprises through existing IT spending in the long-term, through software, hardware and services they are already using.
Gartner clients can read more in the report “Forecast: Public Cloud Services, Worldwide, 2022-2028, 1Q24 Update.”
Learn how to maximise the benefits of cloud computing in the complimentary Gartner ebook Devising an Effective Cloud Strategy.
Gartner IT Infrastructure, Operations & Cloud Strategies Conference
Gartner analysts are presenting the latest research and advice for I&O leaders at the Gartner IT Infrastructure, Operations & Cloud Strategies Conference in Sydney this week. Upcoming dates and locations for Gartner IT Infrastructure, Operations & Cloud Strategies Conferences are November 19-20 in London, December 3-4 in Tokyo and December 10-12 in Las Vegas. Follow news and updates from these conferences on X using #GartnerIO.
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