Gartner Forecasts Australian Organizations Will Spend More Than A$33 Billion on Public Cloud in 2026

Australian organizations 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, Inc., 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 organizations are prioritizing cloud spending this year,” said Adrian Wong, Director Analyst at Gartner. 

“While AI compute demands are driving rapid IaaS growth, the ultimate goal for Australian organizations is business value. As the market shifts from early AI experimentation to real-time inference and agentic AI, organizations are relying heavily on robust PaaS environments to manage autonomous workflows and integrate them into core applications.”

Gartner analysts are exploring how infrastructure and operations leaders can advance cloud strategies in the AI era at the Gartner IT Infrastructure, Operations & Cloud Strategies Conference in Sydney this week.

Software-as-a-service (SaaS) remains the largest spending category for Australian organizations in 2026, forecast to reach almost A$16.4 billion (see Table 1). This 13.8% increase marks slower growth over 2025 as the market matures, with organizations prioritizing license optimization, slower seat growth and tighter application portfolio scrutiny.

Table 1. Australian Public Cloud Services End-User Spending, 2025-2026 (Millions of AUD)

^{Source: Gartner (May 2026)}

“The increasing focus on cloud efficiency this year is also underpinning AI infrastructure strategies,” said Wong. “There’s a shift toward inference-optimized approaches as organizations fine-tune 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.”

Gartner clients can read more in the report Forecast: Public Cloud Services, Worldwide, 2024-2030, 1Q26 Update.

Learn how to maximize the benefits of cloud computing in the complimentary Gartner ebook Devising an Effective Cloud Strategy.