The Australian Government’s new Whole-of-Government Cloud Computing Policy comes into effect on 1 July 2026, reinforcing cloud as a cornerstone of modern public service delivery.
At the same time, investment in cloud technologies continues to accelerate. Australia’s cloud migration services market is forecasted to reach US$3.6 billion by 2030, with a Compound Annual Growth Rate of almost 29 per cent.
For government agencies, the question is no longer whether to adopt cloud, but how to maximise its benefits while maintaining security, controlling costs, meeting sovereignty requirements, and ensuring resilience. This marks a shift from a cloud-first mindset to a more pragmatic cloud-smart approach.
For much of the last decade, cloud migration has been viewed as a key measure of digital transformation success. Agencies were encouraged to migrate applications and data to cloud environments to modernise legacy infrastructure, improve scalability, and accelerate service delivery.
While cloud platforms have improved efficiency and delivered cost-effective digital services, moving to the cloud does not automatically guarantee better outcomes. Government agencies can learn from private-sector organisations that migrated to the cloud without changing their governance, operating models or ways of working, often creating fragmented environments and adding complexity rather than reducing it.
As government cloud environments mature, success should be measured not by how much infrastructure has been migrated, but by whether workloads operate in the most appropriate environments.
Managing cloud costs in taxpayer-funded environments
Cloud expenditure operates on a consumption-based model, unlike traditional infrastructure investments. This presents unique challenges for government agencies. Whilst this flexibility can deliver significant benefits, it can make costs difficult to predict, hide inefficiencies and be challenging to manage without clear oversight.
Unused resources, duplicated environments and poorly managed workloads can quietly drive up cloud costs over time. These issues rarely arise from a single event. Instead, they accumulate gradually, often going unnoticed until spending has become difficult to control.
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For government agencies that operate on constrained budgets and are subject to public accountability requirements, effective cloud cost management is necessary to maintain financial discipline and ensure the responsible use of public funds.
As cloud adoption matures, government leaders are beginning to recognise that financial discipline and workload optimisation are critical to ensuring cloud investments deliver tangible value for taxpayers.
Data sovereignty and cybersecurity are increasingly influencing infrastructure decisions
Cybersecurity obligations and data sovereignty requirements are also reshaping government cloud strategies.
Agencies are responsible for protecting information, critical services and nationally significant data assets. As threat levels increase and regulatory expectations evolve, infrastructure decisions are being assessed through a risk and compliance lens.
Central questions for cloud planning should include where data is stored, who has access to it, how it is monitored, and how it can be recovered in the event of incidents.
This does not mean cloud adoption is slowing. Instead, agencies are more deliberate in matching workloads to environments that best meet security and compliance needs.
Why some workloads remain on-premises
One of the most significant lessons from large-scale cloud programs is that not every workload needs to move.
Certain systems continue to deliver better outcomes when retained on-premises or within private infrastructure environments. This may be due to integration dependencies, latency requirements, regulatory considerations or operational constraints.
A cloud-smart strategy recognises that infrastructure decisions should be guided by workload characteristics rather than broad migration targets.
Identifying these workloads early allows agencies to avoid unnecessary complexity and focus migration efforts where they will deliver the greatest benefit.
The rise of hybrid and sovereign cloud architectures
As a result, hybrid and sovereign cloud models are playing a more prominent role across government.
Rather than relying on a single cloud environment, many agencies are adopting a mix of public cloud services, private infrastructure, and sovereign cloud capabilities. This approach allows workloads to be placed according to their security, compliance, performance and operational requirements, giving agencies greater flexibility while maintaining appropriate levels of control and oversight.
For many agencies, the future is unlikely to be entirely public cloud or entirely on-premises. It will be a carefully governed combination of both.
Governance and resilience matter more than migration targets
Successful cloud programs are rarely the result of technology decisions alone. They are built on careful planning, clear ownership, and a realistic understanding of how systems will operate once deployed.
Planning must begin before migration, with agencies selecting appropriate environments for each workload and establishing networking, identity, and security controls across them.
Data management also requires early consideration, with access, retention, sovereignty, and compliance requirements addressed upfront to avoid complexity and costly redesigns later.
The most effective agencies recognise migration is not the finish line. Cost management, performance optimisation, and security oversight must remain ongoing to ensure cloud investments deliver lasting value.
The next phase of public sector cloud adoption will be defined by how agencies create secure, resilient, and cost-effective environments that sustain value over time.
George Harb
George Harb is responsible for driving growth of OpenText in the ANZ region. As an experienced B2B integration and software business leader, he works with customers and partners to help them derive value from OpenText’s offerings and solve business challenges.
Having joined in 2016, George has held a number of senior sales leadership roles at OpenText. As an internationally experienced business executive, he has spent significant time residing overseas and working with customers across Asia and Southern Africa, his appointment at OpenText bringing him back home to Australia.
With over 20 years of experience in Technology, B2B integration and Software (On and Off Cloud) sales leadership, he has a proven track record in accelerating growth, delivering improvements in operational efficiency and raising customer satisfaction. George’s expertise lies in helping companies transform in a digital first world.
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