Focus Turns to Cloud Services in Australia, New Zealand

    June 15, 2016

    By Per Bauer

    A majority of IT buyers plan to increase their spend on cloud infrastructure in 2016, emphasizing a need for hybrid environments in particular. With such rapid cloud scaling, organizations will need to manage their capacity proactively and attentively to find efficiency.

    The cloud is turning IT environments Down Under upside down. Far from exceptions to the massive global demand for cloud services, IT buyers in Australia and New Zealand (ANZ) are moving en masse to increase their cloud spending in 2016. The trend reflects a strong desire to gain greater control over IT environments and scale quickly in order to support new services.

    To match this growing regional demand, cloud suppliers are aggressively ramping up their bandwidth. While the cloud is becoming the de facto infrastructure standard for a majority of ANZ organizations, all parties must proactively manage their capacity to achieve efficiency in the cloud.

    With Growing ANZ Cloud, Hybrid Environments Lead

    According to Computer Weekly research, nearly 60% of IT buyers plan to increase their budgets for cloud services in 2016. Among cloud environments, hybrid infrastructures have emerged as the clear favorite, with 46% of buyers planning some form of hybrid project. This reach for the cloud is hardly surprising — some estimates have put ANZ cloud market growth at 2.5 times the global average — but all the more significant given that only 48% of buyers expect their IT budgets to rise at all.

    The report suggests that ANZ companies prefer hybrid environments because it offers them greater flexibility, a factor that might enable them to purchase capacity up front and provision as needed, for example. Moreover, companies can integrate hybrid cloud with their legacy systems or private virtual environments, enabling them to transition at a comfortable pace.

    On the other end, providers are scrambling to build out the physical infrastructure needed to support cloud services. According to ZDNet, Australian cloud provider TPG recently joined forces with Vodafone to lay out 4,000 kilometers of new fiber optic cable throughout the country, a AU$900 million project. TPG predicts that cloud traffic in the region will surpass that of current datacenters in a few short years.

    In keeping, they also anticipate that companies will begin to gradually decommission physical systems, decreasing their individual data center footprints even as they scale capacity.

    Indeed, the market is booming, and Frost & Sullivan research predicts that the cloud market will grow at a CAGR of 13.7% from 2015 to 2020. Yet, such rapid expansion may not necessarily guarantee cost-savings for individual companies — that will depend on the IT systems that each company has in place. While the cloud can provide considerable efficiency, migration is a process that has to be handled with care.

    Capacity Planning Is Needed for Hybrid Environments

    The fact that ANZ IT buyers prefer hybrid clouds indicates an awareness that the cloud works better with some infrastructural segments than with others. That’s a healthy degree of caution to maintain, because the cloud doesn’t guarantee lowered costs.

    If companies are certain that they want to migrate services or applications to a cloud environment, they’ll need to rigorously monitor their capacity needs so as not to overprovision resources. The cloud can hide the poor performance of services or apps that use up more resources to meet SLAs, which can create the illusion of normal or high performance. With a proactive and attentive capacity management plan in place, organizations can right-fit cloud services and provide better value to customers.

    The race to the cloud is an exciting trend for ANZ IT organizations, and one that could considerably elevate service levels in a short period of time. Like all IT projects, however, the cloud must be approached with a vigilant eye on both costs and performance.

    (Image credit: NASA/Wikimedia)