Australia’s Cloud Computing Growth to Reach $81 Billion by 2029

According to a new report, cloud computing was worth between $9 billion and $10 billion to the Australian economy from 2022 to 2023. However, continued enterprise cloud migrations and a boom in AI computing could push its annual contribution to GDP up to $81 billion by 2029.

The report, endorsed by the Australian Information Industry Association and compiled by DT Economics for Amazon Web Services, indicated that Australia has seen a 300% growth in the cloud sector’s GDP contribution in Australia since 2007. Cloud computing also supports between 47,000 and 56,000 jobs across the Australian economy, boosting productivity by 0.2%-1.0% of GDP annually.

AIIA CEO Simon Bush called the cloud “a driver of national productivity and prosperity.”

Cloud computing’s economic contributions are rising

ADAPT Research, an Australian technology research firm, suggested that 55% of Australian organisations’ workloads will be hosted on public clouds by 2025. Meanwhile, Gartner has predicted the proportion of Australian and global workloads in the cloud will rise to 70% by 2028.

The AIIA said this uptake in cloud services propelled a compound annual growth in contribution to GDP of 10% between 2007 and 2023, now representing 0.4% of GDP. The report projected the cloud industry will contribute between $68 billion and $81 billion to the nation’s GDP by 2029, accounting for over 0.5% of GDP.

Many Australian jobs are connected to cloud computing

The cloud computing sector supported up to 56,000 jobs in 2022-23, according to the report. This marks a significant growth from an estimated 20,000 to 23,000 jobs in 2007-08. Projections indicated that cloud-related jobs will grow to between 71,000 and 84,000 by 2028-29.

SEE: Australia Could Have 200,000 AI Tech Workers by 2030

The report noted that these jobs include those employed directly by cloud service providers and many others across supply chains. The cloud will also facilitate regional job creation more broadly as more cloud storage facilities are built in urban and regional areas across Australia.

Additional benefits flowing to the economy from the cloud

According to the report, the GDP figures or job numbers do not capture several other productivity benefits flowing from the cloud. The report said that benefits relate to more efficient use of labour and capital resources in producing goods and services because the cloud is intertwined with business.

The report noted how the cloud’s ability to conserve energy leads to enhanced market access opportunities locally and globally, enhanced capabilities, cost savings, improved operational resilience, reduced cyber security risks, and reduced energy and carbon emissions.

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AI supports cloud growth

Artificial intelligence computing is another key and emerging benefit of the cloud for Australia. The AIIA said that cloud computing service providers support integrating emerging technologies, such as AI and machine learning, across Australia’s public and private sectors, as evidenced by the recent growth in AI.

AIIA urges caution in future cloud computing regulation

The Securing Australia’s Cloud Potential report was produced, in part, to caution regulators about imposing strict rules on cloud services providers. This follows regulatory recommendations made by the Australian Competition and Consumer Commission as part of its ongoing Digital Platform Services Inquiry.

The ACCC recommended implementing legally binding, service-specific codes of conduct for certain designated digital platforms. These codes aim to address issues such as anti-competitive self-preferencing, tying the sale of one product to another, and exclusive pre-installation agreements.

Bush explained that “Australia has at times focused on regulating technology rather than supporting innovation,” and that “we must strike a balance to safeguard citizens and customers while fostering creativity, investment, and growth.”

He added that poorly designed regulations risk dampening the sector’s potential and undermining Australia’s position as a leader in the digital economy. “We need forward-thinking regulation that empowers, not encumbers, the sector to remain at the forefront of global innovation.”