While the Australian public Cloud infrastructure services market is tipped to reach $650 million by 2018, it will not mark the end for on-premises IT as more organisations consider or implement private Clouds.

That is according to analyst firm, Telsyte, which currently values the local infrastructure-as-a-service (IaaS) market at $305m for 2014, claiming it is "skyrocketing"; it said the number of enterprises using IaaS in 2013 was double that of 2012.

Based on its Australian Infrastructure and Cloud Computing Market Study 2014, Telsyte said chief information officers (CIOs) are moving workloads to public providers depending on the type and strategic importance to the organisation.

But as Cloud services offer a low barrier to entry for IT infrastructure and organisation penetration grows quickly, it will trigger a large gap in how on-demand and on-premises services are managed.

Simultaneously, Telsyte's research indicates a growing trend in the hybrid Cloud model which it claims will be used by about 30 per cent of enterprises in 2018.

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"Many cloud investments are being done in parallel with existing on-premise infrastructure spending and as the market matures the hybrid approach will be more strategic for CIOs," Telsyte senior analyst, Rodney Gedda, said.

"The hybrid Cloud architecture, and dealing with multiple cloud service providers, both present opportunities for more automation and process improvement."

Nonetheless, Telsyte claims on-premises IT is still going strong as many organisations are using virtualisation technology to implement a Cloud architecture under their own control.

"There is now a healthy range of private Cloud management options available to organisations looking to replicate the scalability and manageability of public Clouds with their own servers," Gedda said.

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