Home Cloud Services Cloud uptake rising rapidly, with IaaS spending to hit $1 billion by 2020

Cloud uptake rising rapidly, with IaaS spending to hit $1 billion by 2020

The uptake and spending on public cloud Infrastructure-as-a-Service (IaaS) is increasing among Australia’s businesses and organisations, with market predictions that the Australian IaaS market is on track to grow by more than 60%, reaching $621 million this year and forecast to hit $1.049 billion by 2020.

The latest market report from tech analyst firm Telsyte reveals local cloud uptake and spending has been driven by changing ICT priorities, with IT infrastructure management becoming a top ICT priority for Australian chief information officers in the past 12 months, matching IT security for the first time.

According to Telsyte, big data analytics, storage, IoT, artificial intelligence and process digitisation are all driving the demand for cloud services as enterprises work towards modernising legacy systems and deploying new workloads.

And, the research shows that fewer than 10% of organisations with greater than 20 staff are not using any form of IaaS, which Telsyte says indicates cloud services have “quickly become a mainstream way of delivering IT infrastructure in Australia”.

The study debuts the Telsyte cloud computing maturity model for the Australian enterprise market which segments companies by six levels of maturity, and findings show that despite cloud uptake growing strongly, only 30% of organisations are in the top two most mature levels.

“The use of cloud aligns well with Australian enterprise ICT and business priorities; however, we still have some way to go before most organisations are using cloud to its full potential,” Telsyte senior analyst, Rodney Gedda says.

Telsyte’s Australian Infrastructure and Cloud Computing Market Study 2017 also found reliability and support factors far exceed cost for organisations when choosing a Managed Service Provider (MSP) or pure cloud provider.

According to the study, more than a third (34%) of Australian enterprises now have a “cloud first” policy which is outweighing restrictions on cloud use, further driving uptake.

“As more global providers have extended their infrastructure to Australia, the data residency arguments for not using cloud have waned,” Gedda notes.

According to Telsyte, selective cloud use is favoured by Australian CIOs over blanket off-premises adoption as applications like content management, backups, DR and software development are moved to pure clouds and managed service providers and, in addition to the growing appetite for public cloud services, Australian CIOs are investing in private cloud technology to enable more rapid service delivery.

With 78% of enterprises building or planning to build a private cloud, Gedda says “it is looking like the preferred on-premises architecture for future deployments and infrastructure refresh programs”.

Gedda says with more virtualisation and acceptance of cloud automation and self-service the platform is set for a hybrid cloud future where workloads are provisioned in response to business and application demands.

“There are many applications where it still makes business sense to deploy on private infrastructure, but having the agility to pick and choose the right cloud service for any application is the big promise of hybrid cloud.”

And, Telsyte’s study shows CIOs are developing private clouds to respond to “business unit self-service”, which has risen to be second only to “more flexibility”.

Also revealed is that operating system-level virtualisation, or “containers”, is finding favour among enterprises with 70% using or investigating their use. Containers allow applications to be more portable across on-premises, MSP or pure cloud infrastructure.

The adoption of cloud networking, or Networking-as-a-Service (NaaS), is also growing alongside its server and storage counterparts with nearly 30% of enterprises using some form for NaaS – from VPNs to firewalls and application acceleration.

“There are big opportunities for NaaS to improve operations and drive innovation as much of the complexity burden of network services is taken away from the customer,” Gedda concludes.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).