Australian enterprises don't like DIY clouds like AWS: BlueCentral

Public cloud juggernauts like Amazon Web Services present little threat to Australian managed hosting providers because local enterprises don't like the DIY approach to IT outsourcing, according to BlueCentral's managing director.
Written by Spandas Lui, Contributor

Local managed hosting providers can fend off competition from Amazon Web Services (AWS) because Australian enterprises need more hand holding when it comes to cloud adoption compared to their US counterparts, according to BlueCentral managing director George Kazangi.

AWS has become a dominant force in the public cloud computing space. Microsoft has been trying to play catch-up with its Azure platform, while VMware is wading into the battlefield later this year with its upcoming vCloud Hybrid Cloud Service.

While these big companies are competing for clients with managed hosting providers like BlueCentral, they are ultimately offering commodity-based services, something that is not particularly suited to Australian enterprises, according to Kazangi.

"What we find in Australia is most companies we deal with that need mission-critical hosting require expertise around design, architecture, and assistance in migrating [their existing IT environments] as well as management going forward," he told ZDNet. "A lot of that is left off with the commodity hosters.

"Australian businesses are smaller compared to the US, and they do need more hands-on experience."

The likes of AWS and Azure are well suited to web developers that prefer the do-it-yourself approach or companies that require a huge amount of capacity that mainly exist in the US, such as Netflix, Kazangi said.

Australian businesses usually don't need more than 50 to 100 virtual machines in their IT environment, and that's when they would look to outsourcing to a provider that can meet their specific requirements, he said.

"In other words, they want us to manage their operating systems for them — they want guaranteed uptimes all the way to the operating system level," Kazangi said. "Whereas overseas, they typically buy the infrastructure and they manage it themselves with the service level agreement for the underlying hardware done by the vendor, but everything else is done by the business internally.

"In Australia, companies typically want somebody else responsible for that to make sure applications stay up."

Because vendors such as HP and EMC tend to design and size their enterprise products for the US market, Australian companies value vendor advice around sizing and architecture of their IT infrastructure, according to Kazangi, which is why local IT resellers and service providers are so successful.

"With the AWS model, you can buy your own virtual machines, but if you get the wrong size and you bought it for three years, you have to sell it on the AWS marketplace," he said. "With managed hosting providers like us, we work with the customers in sizing correctly, and give them flexibility to adjust without penalty."

Ultimately, BlueCentral isn't threatened by public cloud providers coming into the Australian market.

"There is still a very large market in Australia for managed hosting that requires technical skill sets, understanding the IT industry in the Australian market, and also a lot of experience," Kazangi said.

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