Australia's public cloud market – forecast to hit $5 billion in 2017 – is dominated by advertising, which represents more revenue than the core categories of SaaS, IaaS and PaaS combined.
The Australian public cloud market is tipped to grow 17.1 percent, according to a report by research firm Gartner.
By far the largest segment is cloud advertising, which is expected to grow 25.1 percent to reach $2.9 billion for 2017.
The second-largest segment is cloud application services, which includes major SaaS brands such as Salesforce and Office 365 and will reach $1.9 billion in 2017, a rise of 35.1 percent.
Gartner expects the cloud application segment to continue to close the market share gap with cloud advertising. By 2020, SaaS will generate revenues of $3.7 billion compared with nearly $4 billion for advertising.
Cloud system infrastructure services, which would include IaaS leaders such as Amazon Web Services and Microsoft Azure, will reach $475 million, a rise of 14.5 percent but still less than a tenth of the overall public cloud market.
Even by 2020, Gartner expects infrastructure-as-a-service to be just 8.4 percent of overall public cloud revenue.
The biggest growth in percentage terms is expected to come from platform-as-a-service revenue, shooting up 28.4 percent in 2017, though PaaS revenue will remains only a fraction of the market at $262 million.
"Strategic adoption of platform-as-a-service (PaaS) offerings is also outperforming previous expectations, as enterprise-scale organisations are increasingly confident that PaaS will be their primary form of application development platform in the future," said Gartner research director Sid Nag.
"This accounts for the remainder of the increase in this iteration of Gartner's public cloud services revenue forecast."
As for the entire worldwide public market cloud market, revenue is projected to increase 18.5 percent this year to US$260.2 billion. Public cloud growth is expected to even out from 2018 as mainstream adoption increases and cloud services mature.
"As of 2016, approximately 17 percent of the total market revenue for infrastructure, middleware, application and business process services had shifted to cloud. Through 2021, this will increase to approximately 28 percent," Nag said.
Gartner said 70 percent of public cloud to come from the top 10 providers by 2021, singling out the three global infrastructure-as-a-service market share leaders Amazon, Microsoft and Alibaba.
"In the SaaS and PaaS segments, we are seeing cloud's impact driving major software vendors such as Oracle, SAP and Microsoft from on-premises, license-based software to cloud subscription models," Nag said.
Public cloud services revenue forecast, Australia 2016-17