The Australian infrastructure-as-a-service (IaaS) market is predicted to reach AU$439 million by 2018, according to a Frost & Sullivan report.
In the Australian Infrastructure as a Service Market Report 2014, Frost & Sullivan found that the IaaS market grew 43 percent during the 12 months to December 2014, and will continue to grow strongly over the next five years.
According to Phil Harpur, Frost & Sullivan Australia and New Zealand ICT Practice senior research manager, the demand for IaaS is being driven by high growth of internet traffic, which has significantly increased the need for data storage and computing in both the consumer and corporate markets.
Harpur noted that in turn, a high proportion of Australian companies are opting to move to full cloud solutions rather than having a mix of on-premises and cloud solutions.
"In the consumer market, there is strong demand from use of data-intensive services, such as videos, social networks, and online gaming, especially through mobile networks. Demand in the corporate market is being driven by access to information through a growing range of data-intensive business applications, such as data mining and data analytics," he said.
"An increasing number of business transactions and new sources of information such as social networks require dedicated big data solutions. Easier access to these applications via cloud computing is witnessing demand growth, which in turn is driving demand for cloud computing."
Harpur continued, saying that there are still some IT departments reluctant to move their workloads and infrastructure to the cloud, due to a perceived loss of control over key business processes and data.
"Some IT managers remain concerned about the integration costs and complexities that exist when integrating on-premise legacy applications with cloud applications. Also, some companies still resist moving to the cloud due to security concerns and risks in areas such as disaster recovery," he said.
Harpur added that when the National Broadband Network (NBN) is rolled out, it is expected to drive greater demand for cloud computing services.
As a result of this shift to the cloud, Frost & Sullivan pointed out that telcos including Telstra, Optus, Macquarie Telecom, and TPG have made significant investments within their own datacentres to cater for cloud services demand.
Audrey William, Frost & Sullivan Australia and New Zealand head of ICT research, said telcos are leveraging their network capabilities and linking them to datacentres to be able to offer cloud services seamlessly on top of their existing network platform.
"Managed IT service providers such as Dimension Data and CSC have been very active in the local market, and are evolving to provide an end-to-end service offering of cloud services, including software as a service, IaaS, unified communications as a service, and datacentre services, security, and backup and redundancy measures.
"The increasingly complex cloud ecosystem requires integration of cloud systems with back-end legacy systems, along with cloud brokerage and cloud orchestration services. Telcos such as TPG/AAPT and Optus are also moving down this path," she said.
In the report, Frost & Sullivan also predicted that the cloud services market will likely see a lot of consolidation over the next few years, where smaller cloud specialist players will become partners or cloud brokers of global providers, such as Amazon Web Services, Google, or Microsoft, because they lack scale.
In a separate study, IDC has revealed that Australia's total public IT cloud services spending is forecast to grow from AU$909.2 million in 2014 to over AU$1.7 billion in 2018, at a compound annual growth rate (CAGR) of 17.2 percent. The IT cloud services consists of software as a service (SaaS), IaaS, and platform as a service (PaaS).
SaaS accounted for 60 percent of 2014 public IT cloud services spend, and IDC said it will continue to dominate public IT cloud services spend in the future.
IDC believes that PaaS and cloud storage services will be the two fastest-growing categories, driven by developer community adoption and big data-driven solutions. PaaS is expected to grow at 40.3 percent CAGR, while cloud storage services will grow at 31.7 percent, for the five-year period from 2014 to 2018.
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