Australian public cloud market to grow 17 percent in 2016: Gartner

The Australian public cloud services market will by the end of this year grow by 14 percent to reach US$4.18 billion and 17.2 percent to US$208.6 billion globally, while the Asian market showed 41.9 percent year-on-year growth.
Written by Jonathan Chadwick, Contributor

Analysis firm Gartner has predicted that the Australian public cloud services market will grow by 14.4 percent during 2016 to total US$24.18 billion, up from US$3.65 billion in 2015.

The public cloud services market for 2015 in Asia-Pacific excluding Japan (APeJ) showed growth of 41.9 percent year on year, with the top 10 adopters making up 43.3 percent of the market, according to IDC.

"There is a slight shake-up in the rankings as the public cloud services market matures, including the notable exit of Verizon and HP from public cloud. All top three vendors now consist of those predominantly playing in the IaaS market," said Daphne Chung, director of Cloud Services and Software Research at IDC Asia-Pacific.

AWS retained its number one position in the APeJ public cloud services market, with Salesforce dropping to fourth place. Microsoft remained in second place, while Alicloud took third.

For its part, Gartner believes those intending to use cloud services outnumber the rate of actual adoption.

"There are still challenges for organisations as they make the move to the cloud. Even with the high rate of predicted growth, a large number of organisations still have no current plans to use cloud services," Sid Nag, research director at Gartner, said.

The company also predicted the use of private cloud and hosted private cloud services to increase at least through 2017, but factors such as security and privacy concerns still inhibit public cloud adoption.

"The real security challenge is using public cloud services in a secure manner," said Ed Anderson, research VP at Gartner. "More education is needed to help organisations overcome the hype associated with security concerns. This should be a key area of focus for providers in working with their clients to unlock the benefits of public cloud services."

According to Gartner's reports Forecast Analysis: Public Cloud Services, Worldwide, 2Q16 Update and Market Trends: Cloud Adoption Trends Favour Public Cloud With a Hybrid Twist, the highest growth globally will come from cloud system infrastructure as a services (IaaS), at 42.8 percent, while software as a service (SaaS) is expected to grow by 21.7 percent in 2016 to reach $38.9 billion.

The analyst firm tips an increased multi-cloud environment in most enterprises and a hybrid cloud scenario to dominate. However, integration challenges, incompatibilities, a lack of vendor support, inadequate management tools, and an absence of common APIs stand in the way of a higher rate of adoption..

Microsoft APAC and CityNet released a joint study last year claiming cloud adoption in Asian cities is stymied by government concerns about high upfront costs, data security, and legal requirements.

Despite this, SAP in May stated that it would reap the rewards from the Asia-Pacific's increased adoption of cloud.

"I truly believe SMEs in Asia today are tomorrow's multinationals, and today some of the SMEs in Asia will be in the Fortune 200 10 years from now," Adaire Fox-Martin, president of SAP APAC, said at the time.

Editorial standards