Hyperscalers continue to dominate
SYDNEY, AUSTRALIA – Australia’s Infrastructure as a Service (IaaS) market continues to grow strongly with cloud driving digital transformation and new product development, according to new research from Australian emerging technology analyst firm, Telsyte.
Australian organisations spent $1.36 billion on IaaS in 2020, up 38 per cent from the $988 million* spent in 2019 and is on track to exceed $3 billion by 2025.
The IaaS market benefited from the pandemic-driven digital transformation rush and 1 in 3 (33%) Australian business leaders said COVID-19 is a driver for digital transformation strategies, and almost half now have a ‘cloud first’ policy.
Telsyte forecasts the total market to reach $1.74 billion in 2021, a year-on-year increase of 28 per cent as half (51%) of businesses that have adopted cloud are planning to increase their cloud spending in 2021.
The Telsyte Australian Hyperscale Cloud Market Study 2021 found the big six global hyperscale clouds – AWS, Azure, Google, IBM, Oracle and Alibaba Cloud – continued to dominate the Australian cloud market with a combined $1.16 billion in IaaS revenue in 2020, or 85 per cent of the market, up from 82 per cent.
Telsyte forecasts hyperscale IaaS will capture nearly 90 per cent of revenue in Australia by 2025.
“The hyperscaler public clouds are consolidating their dominance in market by offering more complex services, such as machine learning, automation as well as a growing list of other services,” Telsyte Managing Director, Foad Fadaghi, says.
Multi-cloud usage the norm, cloud sprawl still a challenge
Public clouds are now mainstream amongst Australian businesses. According to Telsyte’s public cloud maturity measures, 39 per cent of organisations are in the development phase, including investigating and developing cloud services as cloud and hosted models replace on-premises applications.
With pure cloud and MSP delivery models making up 55 per cent of application workloads, the majority of those using cloud have opted for hyperscalers’ cloud solutions, which are the most visible starting point.
Amid so many options, Telsyte’s research found businesses on average have 3.3 public cloud services and 3.8 private cloud services in use, with multi-cloud use rising with the size of organisation.
This is slightly down from four in 2020, but cloud “sprawl” is still an issue and hybrid platforms need to have consistent management across infrastructure.
Telsyte found hybrid cloud use is high (65%) as organisations shuffle a mix of workloads, and going forward, hybrid cloud use and intentions are very high (85%) as CIOs select the most appropriate hosting architecture.
Disruptions creating opportunities for managed services
Despite the strong cloud uptake, the study found utilisation remains a challenge. The average utilisation rate is only 31 per cent, creating opportunities for cloud providers and managed services to assist organisations to better-utilise resources.
The top three cloud priorities for businesses include developing new cloud products, migrating more workload to cloud and implementing more security measures on cloud.
The latest research also found the top three challenges businesses are facing when it comes to cloud adoption are security of data, cost of management and the lack of in-house expertise. Telsyte believes cloud managed service providers are in the box seat to help businesses navigate in adoption decisions with growing appetite for cloud.
In fact, over 1 in 4 (29%) of organisations already engage with third parties to manage their cloud services, up 5 per cent from 2019. The same research also found that 82 per cent of businesses see benefits to engage cloud brokers or 3rd parties, especially to up their cloud skills (31%) and manage services (30%).
With 37 per cent of organisations reporting they lack cloud security skills, AI and machine learning is now highly sought after by corporates (30%).
For further information on the study or media enquiries contact:
Alvin Lee
Senior Analyst
Tel: 1800 313 142
Email: alee@telsyte.com.au
Foad Fadaghi
Managing Director
Tel: 1800 313 142
Email: ffadaghi@telsyte.com.au
The Telsyte Australian Hyperscale Cloud Market Study 2021 is a comprehensive study which provides subscribers with:
Market sizing and forecasts of the Australian cloud infrastructure services market
Analysis of market share and hyperscale performance
End-user trends in cloud computing
Strategic analysis of market opportunities for cloud infrastructure and MSPs
In preparing this study, Telsyte used:
An online survey of 467 IT decision makers across Australian organisations with 20 or more employees. More than half of respondents were from large organisations (>200 employees)
Annual reports released by market participants
Interviews and discussions with cloud providers, third party service providers and carriers
On-going monitoring of local and global market trends
*Due to the expanded IaaS coverage and a definitional change, Telsyte has revised the 2019 estimates to be comparable with the latest 2020 estimates and forecasts up to 2025 in this release.
About Telsyte
Telsyte is Australia’s leading emerging technology analyst firm. Telsyte analysts deliver market research, insights and advisory into enterprise and consumer technologies. Telsyte is an independent business unit of DXC.technology. For more information visit www.telsyte.com.au
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