Australia’s cloud Infrastructure-as-a-Service (IaaS) is on a growth trajectory with new research predicting market spend to reach $1.2 billion by 2022. It also shows three quarters of medium and large Australian organisations are already taking a multi cloud approach, which is presenting some complexity challenges.
The research, Telsyte Australian Cloud Market Study 2019, is based on an online survey of 447 IT decision makers across Australian organisations having greater than 20 employees, with 60 per cent of respondents coming from organisations with greater than 200 employees. It showed organisations spent $688 million on IaaS last year.
The study found maturity is rapidly increasing in Australia, with 84 per cent of organisations having a strategic approach to cloud computing and 24 per cent having mature practices that are able to move workloads from on-premises to cloud.
Foad Fadaghi, managing director of Telsyte said, “One of the key things we saw overall is that IT spending is increasing. Despite the disruption and despite the challenges in the marketplace we are seeing this acceleration of spend.
“The last time we did this survey, was around about 4.8 per cent increase overall, what we are seeing is six per cent intended increase in 2019 in IT spend.”
The study identifies the main driver for IT budget growth is digital transformation.
Those organisations which have adopted cloud computing, 43 per cent plan to increase spend on cloud infrastructure as more experiment with multiple platforms.
According to Telsyte, a multi-cloud approach is dominating, with 77 per cent of all Australian organisations using more than one platform, and 49 per cent using more than four cloud platforms.
The average number of cloud platforms used by organisations reached 3.8 in 2018.
Concerns for adoption
The report notes the early concerns about cloud adoption have all but disappeared with few organisations having any cloud restrictions.
In 2018, 41 per cent had a ‘cloud first’ policy, and another 36 per cent place no restrictions on cloud use.
Cloud cybersecurity is both a driver and challenge for companies. From the study, 40 per cent of respondents said security is a top reason for adopting cloud-based applications with 42 per cent stating security as a concern with cloud computing.
Fadaghi said, “We see that [cybersecurity] is still the most challenging things that organisations have to deal with.
“I guess on the flip side organisations are using cloud services because of the security features because it’s easy to manage when it comes to security, easier to get data, easier to monitor those services because you’re drawing on the skills of some large multinational organisations.”
Fadaghi said when it comes to third-parties, brokers or partners for the cloud, these organisation are particularly important when it comes to bringing in skills or indeed managing multiple cloud arrangements.
“We are seeing that some 30 per cent of organisations are using partners to manage cloud services. The complexity of multiple clouds is increasing, organisations are depending more on partners,” he said.
Companies have several reasons for using partners according to Fadaghi.
“One of them is cost savings, obviously going through a partner you get the benefit of preferential buying positions. You’re able to bring in skills, which I think is critical as the amount of skills needed across these emerging technologies is a very rapidly growing. Last but not least, management for the service and keeping track of everything,” he explained.
With IaaS adoption in Australia continuing to grow, enterprises are deploying various applications off premises.
Fadaghi explained, “These are the applications that have moved to the cloud according to the survey respondents, everything from supply chain management, partners to the core systems.
“A lot of organisations have partly moved to the cloud and we think there is a huge opportunity to move a lot more organisations across fully over to the cloud in the next couple of years.
“How does that relate to ERP? we are seeing that half of EPR systems have been fully or partially moved over to cloud based services, a little bit more in New Zealand. We certainly think there’s another huge opportunity to move organisations across to the cloud.”
From the study, 84 per cent of large organisations using some form of cloud storage or compute for their main big data analytics program as massive amounts of data out-grows on-premise capabilities.
The uptake is extending to traditional “core” applications with 65 per cent of organisations claiming their ERP systems are now fully or partially cloud-based. Cloud deployments have been particularly important to address enterprise application challenges of poor integration (30 per cent); lack of infrastructure (29 per cent); and long deployment times (26 per cent).