Cloud climbs to new heights in Australia as market growth continues

Core applications quickly moving to the cloud, but skills challenges remain

Tuesday, April 2nd 2019

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SYDNEY, AUSTRALIA – Australia’s cloud Infrastructure-as-a-Service (IaaS) market continues to boom with organisations spending $688 million in 2018, a figure expected to reach around $1.2 billion by 2022, according to new research from emerging technology analyst firm Telsyte.

The Telsyte Australian Cloud Market Study 2019 found maturity is rapidly increasing in Australia, with 84 per cent of organisations having a strategic approach to cloud computing and one in four (24%) having mature practices that are able to move workloads from on-premises to cloud.

The strong spending is in line with Australian organisation’s intentions to increase total IT budgets, with an average increase of 6 per cent expected in 2019, up from 4.8 per cent in 2018. The main driver for IT budget growth is digital transformation, of which cloud computing is a key enabling technology.

Among 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 almost half (49%) using more than four cloud platforms. The average number of cloud platforms used by organisations reached 3.8 in 2018.

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.

Cyber security is both a driver and a challenge for organisations when it comes to cloud, with 40 per cent ranking security as a top reason for adopting cloud-based applications. Conversely, 42 per cent rate security as a concern with cloud computing.

ERP, big data remain big opportunities for cloud applications

With IaaS being adopted rapidly, Australian enterprises are now deploying a range of applications off premises.

Australian companies see cloud as an important enabler for big data applications, with 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 almost two thirds (65%) of organisations claiming their ERP systems are fully or partially cloud-based.  Cloud deployments have been particularly important to address enterprise application challenges of poor integration (30%); lack of infrastructure (29%); and long deployment times (26%).

Skills availability challenges cloud

Australia’s adoption of cloud must be supported by skilled professionals, however there is still a gap in the market for cloud skills.

 Telsyte research found organisations are looking towards partners to manage cloud services, with 37 per cent of large organisations currently outsourcing cloud management to third parties.

 Local data centres remain important for Australian organisations with 62 per cent of IT and business leaders being more willing to try cloud services from multinational organisations if they have local data centres.

 A significant 69 per cent of Australian organisations still have restrictions in adopting off-shore public cloud services, with the majority citing internal company policies as the main limitation. Only around half of organisations interviewed believed their cloud computing practices were fully compliant to GDPR regulations.

 For further information on the study or media enquiries contact:

Foad Fadaghi
Managing Director
Tel: +61 2 9235 5851
Email: ffadaghi@telsyte.com.au

 The Telsyte Australian Cloud Market Study 2019 is a comprehensive study which provides subscribers with:

  • Market sizing, forecasts and market assumptions

  • Cloud trends across enterprise applications, cloud partners & outsourcing, data location and cloud policies

  • Australian organisations IT trends and strategies, including cybersecurity

  • Strategic analysis of market opportunities for cloud infrastructure and applications

In preparing this study, Telsyte used:

  •  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.

  • Reports released by service providers

  • On-going monitoring of local and global market trends

 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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