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Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstallAustralian organisations are forecast to spend A$33.6 billion on public-cloud services in 2026, up 17.9% from 2025, according to Gartner’s 11 May 2026 forecast. That is a spending projection, not evidence that 17.9% more organisations—or 17.9% more workloads—will move to cloud.
The broader direction is clear: artificial-intelligence workloads, government policy, data-centre investment and replacement of ageing systems are pushing cloud higher up Australian investment agendas. But the available evidence does not establish a single, current national cloud-adoption rate.
What the 2026 forecast actually measures
Gartner’s forecast is for Australian end-user spending on public-cloud services. It does not measure the proportion of businesses using cloud, the percentage of workloads hosted in cloud environments, or the number of organisations that migrated during the year.
| Cloud category | 2026 Australian outlook |
|---|---|
| Total public-cloud services | A$33.6 billion, 17.9% higher than 2025 |
| Infrastructure as a service (IaaS) | 24.1% growth forecast |
| Platform as a service (PaaS) | 20.9% growth forecast |
| Software as a service (SaaS) | A$16.377 billion; still the largest category |
Gartner analyst Adrian Wong attributed the infrastructure demand to AI-driven requirements for high-performance computing. Gartner also described organisations moving from early AI experiments towards real-time inference and agentic AI. Those are Gartner’s explanations for the forecast, rather than an independently measured causal model.
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Gartner said SaaS growth was slowing as organisations reviewed licences, seat counts and application portfolios. That distinction matters: cloud spending can rise because existing customers buy more capacity or higher-value services, even if the number of cloud customers changes little.
Why Australian government policy matters
Australia’s Whole-of-government Cloud Computing Policy took effect on 1 July 2026. It applies to non-corporate Commonwealth entities; corporate Commonwealth entities are encouraged to use it where appropriate. It is not a blanket requirement for every Australian business or every government workload to run on public cloud.
The policy is an implementation framework, not a declaration that migration is complete. It directs agencies to consider cloud for new digital investment and to manage responsible transitions from legacy systems. Its scope includes:
- security and privacy requirements;
- service resilience and continuity;
- transparent cost management;
- interoperability and portability;
- workforce capability and skills; and
- readiness for technologies such as artificial intelligence.
The policy covers public, private and hybrid cloud models. Agencies are expected to assess a solution against the relevant requirements and use case rather than apply a one-size-fits-all public-cloud rule.
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Lucy Poole, Deputy CEO of the Digital Transformation Agency, said: “With clear requirements in place, agencies can make more consistent and confident cloud decisions. This will lift the security, performance and long-term sustainability of the systems that underpin essential services accessed daily by Australians.” She also described cloud as “a critical enabler of a modern public service that effectively delivers for the community.”
Investment and use show momentum, not an adoption rate
AWS data-centre investment
In June 2025, the Australian Government announced that AWS planned to invest A$20 billion over five years in Australian data-centre infrastructure, including expansion in Melbourne and Sydney. The announcement said the capacity would support AI and other technology applications. It was a planned investment commitment; it did not establish how much had been deployed by September 2026.
Government agencies using AWS
In January 2025, the Digital Transformation Agency said more than 140 Commonwealth, state and territory agencies were using AWS. That is a dated agency count, not a measure of workloads, spending, migration completion or the share of all Australian public-sector systems in cloud.
Which providers are biggest?
The most clearly dated market-share figures available are Gartner’s 2023 Australian IaaS estimates, reproduced in an ACCC report. They should not be presented as current 2026 shares or as shares of the entire cloud-services market.
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| Provider | Australian IaaS share (2023 estimate) |
|---|---|
| Microsoft | 30.9% |
| Amazon | 30.1% |
| 20.6% |
The figures show a market led by three large providers at that time, but they do not settle which provider is best for a particular organisation. A meaningful choice depends on workload requirements, existing licences, data-location rules, resilience targets, specialist services, available skills and the cost of moving out later.
How organisations should evaluate a public-cloud move
1. Match the service to the workload
Separate ordinary application hosting, databases, analytics, AI training and real-time inference. Requirements for latency, compute accelerators, storage performance and managed services can produce very different provider choices.
2. Check security, privacy and regulation
Define who controls encryption keys, how identity and access are administered, where data is stored and processed, and what audit evidence is available. Public cloud is a delivery model; it does not transfer an organisation’s legal or governance duties to the provider.
3. Model resilience and recovery
Set recovery-time and recovery-point objectives, then test whether the proposed architecture meets them. A single-region or single-provider design may be cheaper but can create a larger outage or exit risk.
4. Calculate total cost, not just the headline rate
Include migration work, data transfer, support, licences, observability, security tooling, backup, staff training and the cost of idle or over-provisioned resources. Establish ownership for budgets and ongoing cost reviews before deployment.
5. Plan portability and exit
Document data-export formats, contract termination terms, replacement services and the time required to rebuild dependencies. Prefer open interfaces where practical, and identify proprietary services whose replacement would be expensive.
6. Assess skills and support
Cloud capability must cover architecture, security, finance, operations and incident response. An organisation can use a consulting, managed-service or official training partner, but should verify Australian availability, scope and suitability before signing.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Concentration and lock-in risks
The Reserve Bank of Australia has discussed provider concentration, transparency, resilience and vendor lock-in in its analysis of clearing and settlement facilities. Those concerns are especially relevant in critical financial infrastructure, but the paper’s sector-specific findings should not be generalised into a claim that every cloud deployment is unsafe.
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For any organisation, concentration risk becomes more material when a provider hosts several interdependent systems, when switching costs are unclear, or when the customer cannot obtain timely operational and pricing information. Multi-cloud can reduce some dependencies, but it also increases complexity, duplicated skills and integration costs; it is not automatically safer or cheaper.
What this means for Australian businesses and households
For businesses, the forecast signals continued investment in cloud capacity and services, particularly infrastructure, platforms and AI-related computing. It does not guarantee lower prices, immediate productivity gains or a successful migration. A staged business case—with measurable service, resilience and cost outcomes—is more useful than treating “cloud” as an end in itself.
For households and investors, cloud growth is an industry-spending trend rather than a direct prediction about personal finances. Public-sector policy may improve the reliability of digital services over time, but implementation, procurement and legacy-system constraints mean benefits will arrive unevenly.
How to read earlier forecasts
An IDC outlook published in 2022, in a Microsoft-commissioned whitepaper, projected Australian cloud spending rising from A$12.2 billion in 2022 to A$22.4 billion in 2026—an 83% increase. That is historical context, not the current outlook. Gartner’s A$33.6 billion 2026 forecast is the newer figure and uses its own market definition and methodology.
The Bottom Line
Australia is on track for a major increase in public-cloud spending, with Gartner forecasting A$33.6 billion in 2026. The strongest evidence supports a surge in investment and capacity—not a precisely measured 17.9% rise in organisational adoption. Government policy, AI demand and infrastructure commitments are accelerating consideration of cloud, while security, resilience, cost control and exit planning remain essential.
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