May 24, 2022

Australian IaaS market soars beyond $1.3bn

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.

In 2020 Australian organisations spent $1.36 billion on IaaS, up 38 per cent from the around $988 million in 2019 and we are now on track to exceed the $3 billion mark by 2025.

The move to IaaS is the ongoing shift from organisations hosting their technology systems on their own infrastructure, into the data centres of specialist operators.

Telsyte says the IaaS market benefited from the pandemic-driven digital transformation rush, with one in three Australian business leaders saying that COVID-19 was the driver for digital transformation strategies.

Almost half of these leaders now have a ‘cloud first’ policy in their organisations.

According to Telsyte’s report known as Hyperscale Cloud Market Study 2021,  51 per cent of businesses which have already adopted cloud are planning to increase their cloud spending in 2021.

Their main aims are to develop new products based on the cloud, migrate more systems or “workload” on to the cloud and implement more cyber-security measures.

The report showed that the big six global hyperscale clouds (AWS, Azure, Google, IBM, Oracle and Alibaba Cloud) continue to dominate the cloud market in Australia.

Cloud application remains problematic

Despite the strong cloud uptake, the Telsyte study found that application continues to be problematic.

The average utilisation rate is only 31 per cent, creating opportunities for cloud providers and managed services to assist organisations 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 the cloud.

The research also found that 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 well placed to help businesses navigate their adoption decisions.

In fact, over one in four 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 in engaging cloud brokers or 3rd parties, especially to improve their cloud skills and manage services.

At Neo Technologies we are committed to helping businesses implement the right technology to achieve their IAAS outcomes.

Do reach out if you need more specific information and require our help.

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Julie Dunmore

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