New Zealand organisations steadily embracing cloud computing
Frost & Sullivan: New Zealand organisations steadily
embracing cloud
computing for IT
solutions
Awareness of multiple cloud benefits
beyond reducing IT costs include
agility,
flexibility and collaboration with stakeholders
Auckland,
5 December, 2013 – Organisations in New Zealand are
becoming
increasingly aware of the numerous benefits
cloud computing offers and are
progressively adopting
cloud solutions to reduce IT costs, improve
business
agility, increase flexibility and enhance
collaboration with stakeholders
through community cloud
environments.
Frost & Sullivan’s new research, State of
Cloud Computing New Zealand 2013
reports that of
organisations in New Zealand currently using
cloud
computing services, 47% spend more than 10% of
their total IT budget and
32% spend more than 20% of
their total IT budget on cloud solutions
or
services.
Phil Harpur, Senior Research Manager,
Australia & New Zealand ICT Practice,
Frost & Sullivan
says, “There is a marked increase from 2012’s
figures,
indicating a growing shift to the cloud. Though
larger organisations
generally spend more on cloud
computing services, smaller and medium sized
enterprises
investing significant amounts of their IT budget have
also
increased.”
63% of organisations in New Zealand
currently using cloud solutions plan to
increase their
cloud-based solutions budget over the next year, an
increase
from 57% in 2012. 33% of organisations indicated
flat spending on cloud
services, a decrease from 40% who
indicated no change in spending
previously. “All these
reflect a market very much in a growth phase,”
states
Harpur.
E-mail and storage & office productivity solutions
are most accessed via
the cloud. “88% of New Zealand
organisations access e-mail via the cloud -
33% via
public cloud, 38% via private cloud and 17% via a hybrid
model. In
a private cloud environment organisations
favour server computing
solutions, e-mail security,
office productivity solutions and storage,
while in a
hybrid cloud environment CRM is the most widely
deployed
application,” Harpur elaborated.
Andre
Clarke, Country Manager, New Zealand, Frost & Sullivan says,
“Overall
IT cost reduction, reduced risk of IT
disruption from external factors such
as natural
disasters, greater overall business agility and
flexibility,
enhanced IT infrastructure efficiency and
faster deployment time are all
factors driving adoption
of cloud computing.”
Organisational understanding of
cloud computing is maturing, and interest
is observed
across all sectors in the New Zealand market, with no
one
vertical dominating demand. Software-as-a-Service
(SaaS) still accounts for
the largest portion of
cloud revenues, although the adoption
of
Infrastructure-as-a-Service (IaaS) and
Platform-as-a-Service (PaaS) has
been very strong over
the past two to three years.
SaaS offers several benefits
over on-premise software such as lower upfront
costs,
standardisation and ease of upgrade, ubiquitous access and
seamless
integration with in-house infrastructure.
Other driving factors for SaaS
adoption include the
Ultra-Fast Broadband (UFB) rollout, falling
broadband
prices, rising data cap limits on broadband
plans and increasing enterprise
mobility. However, data
sovereignty remains a prominent issue in New
Zealand,
particularly in the public sector where the government
cloud
strategy mandates that all data remains in New
Zealand, thus limiting the
number of potential
suppliers.
SaaS application adoption rates are positively
correlated with the size of
the organisation which are
more likely to use software applications
accessed via the
cloud, especially for Office Productivity
Applications,
CRM, HRM and ERP. “Multinational SaaS
vendors, Salesforce.com, SAP,
Microsoft, and Google have
had good growth in the New Zealand market and a
new area
of “cloud first” applications is growing as demand is
emerging for
custom built SaaS offerings,” mentions
Clarke.
NZ founded SaaS providers continue to emerge,
offering innovative,
competitive services to both local
and international clients. Xero is the
technology
success story of the year and currently the flag bearer for
the
NZ SaaS industry, leading the way and proving that NZ
can create valuable,
global software brands.
With
Infrastructure as a Service (IaaS), the use of compute
instances is
much higher than storage due to low barriers
to entry, attractive pricing
and well publicised
implementation case studies. “IaaS has seen a
huge
spurt in adoption in the last 12 to 24 months due to
an increasing number
of local market participants such as
Datacom, ICONZ, Gen-i/Revera, Maxnet
and Web Drive”
added Clarke.
Over the next 12 months, at least 25% of
organisations not currently
accessing office productivity
applications (e.g. Google Docs) via the cloud
are likely
to do so. CRM, Desktop and Analytics and Business
Intelligence
are the SaaS applications most likely to be
migrated while HRM, e-mail
security and ERP are less
likely to be migrated to the cloud.
Challenges in adopting
cloud-based services include data / security threats
and
risks as well as integrating existing systems and legacy
applications
with cloud data. Private cloud deployments
are more widespread than both
public and hybrid cloud
deployments for all types of software and
applications,
with the exception of conferencing. Companies that
implement
private clouds can face challenges when they
try to gain extra scale in the
future. Network Security
is the most important ICT component when building
a
private cloud followed by application security and access
control and IT
service management tools third. “Also,
the sales processes of cloud service
providers are more
complex, very different and far more solution
oriented
than traditional menu driven transactions. To
overcome this challenge, many
providers are investing in
training and up-skilling their sales
professionals,”
Harpur explained.
Security is the most important
criteria when selecting a cloud vendor,
followed by
reputation, trust, service and reliable support, price and
ROI
success. Vendors must also have sufficient SLAs,
offer sufficient product
scalability and offer a range of
value added services” Harpur added.
59% of organisations
currently outsource their data centre hosting,
largely
due to cost and security factors, and 78% expect
their data centre
requirements to increase over the next
12-18 months. Cloud computing growth
is driving demand
for data centre capacity and providers are
expanding
local presence as well as building new capacity
in multiple locations
nationwide. New data centre space
is in response to the strong growth in
data usage, demand
for local data centres and increasing propensity
of
toward outsourcing data centre operations. Frost &
Sullivan believes that
the growth rate of data centre
outsourcing and the need for greater data
centre space
will continue to stimulate demand, providing
significant
growth opportunities for most service
providers.
Frost & Sullivan's State of Cloud Computing
New Zealand 2013 report forms
part of the Frost &
Sullivan New Zealand Enterprise Communications
program.
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