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 per cent spend more than 10 per cent of their total IT budget and 32 per cent spend more than 20 per cent 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 per cent 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 per cent in 2012. 33 per cent of organisations indicated flat spending on cloud services, a decrease from 40 per cent 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 per cent of New Zealand organisations access e-mail via the cloud – 33 per cent via public cloud, 38 per cent via private cloud and 17 per cent 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, said Gartner.
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.
According to report, 59 per cent of organisations currently outsource their data centre hosting, largely due to cost and security factors, and 78 per cent 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.