Australian enterprises increasing investment in public cloud IaaS: Telsyte

More than half of all Australian CIOs and IT leaders will be increasing their investment in public cloud infrastructure as a service (IaaS) in the upcoming year, according to a new study by analyst firm Telsyte.

The Australian IaaS market is expected to reach AU$621 million by the end of 2016, representing more than 60 percent growth since 2015. Telsyte has also predicted that IaaS expenditure will surpass AU$1 billion by 2020.

The increase in spending is being driven by a shift in IT priorities, according to Telsyte, with IT infrastructure management becoming a top concern for Australian CIOs in the past 12 months, matching security for the first time.

The Telsyte Australian Infrastructure & Cloud Computing Market Study 2017 also showed that big data analytics, storage, Internet of Things (IoT), artificial intelligence, and process digitisation are all driving the demand for cloud services.

More than a third of Australian enterprises now have a "cloud first" policy, Telsyte's latest study found.

"As more global providers have extended their infrastructure to Australia, the data residency arguments for not using cloud have waned," said Rodney Gedda, senior analyst at Telsyte. "However, we still have some way to go before most organisations are using cloud to its full potential."

In addition to public cloud services, more than three quarters, or 78 percent, of Australian enterprises are investing in private cloud technology to enable more rapid service delivery.

"There are many applications where it still makes business sense to deploy on private infrastructure, but having the agility to pick and choose the right cloud service for any application is the big promise of hybrid cloud," Gedda said.

In addition, 70 percent of Australian enterprises are using or investigating the use of containers to allow applications to be more portable across on-premises, managed service providers, and pure cloud infrastructure, the latest Telsyte study found.

The adoption of cloud networking, or networking as a service (NaaS), is also growing, according to Telsyte, alongside its server and storage counterparts, with nearly 30 percent of enterprises using some form of NaaS -- from VPNs to firewalls and application acceleration.

Earlier this month, a different study by Telsyte showed that Australian enterprises are spending more of their IT budgets on the development of new products compared to two years ago when their focus was on reducing operational costs.

The Telsyte Australian Digital Workplace Study 2017 indicated a greater uptake of new technologies such as 3D printing, robotics, augmented and mixed reality, and IoT among Australian enterprises.

A recent Microsoft study also found that almost half of Australian IT leaders will drive their organisation's transition to hybrid cloud infrastructure over the next 12 to 18 months, with approximately 40 percent already transitioning to hybrid cloud with either integrated or non-integrated public and private cloud infrastructure.

Earlier this year, Zorawar Biri Singh, CTO of Cisco, which acquired container startup ContainerX in August, estimated that more than 30 percent of the public cloud workload will be pulled back into private or hybrid cloud infrastructure due to the rise of containers.

Meanwhile, VMware CEO Pat Gelsinger believes half of all enterprise workloads, about 300 million, will exist on the public cloud by 2030.