Australian public cloud market to grow, despite legal concerns: Gartner

Australian enterprises are still spending more on public cloud services, despite concerns that Australian laws don't provide adequate protection for cloud providers and users.

Australia's legislative shortcomings will not stymie the growth of public cloud adoption in the enterprise, according to Gartner analyst Rolf Jester.

Australia's public cloud market is tipped to reach AU$2.4 billion this year, up 18.8 percent from 2011, based on research by Gartner. Enterprise spending in cloud services is on the up, with an expected growth rate of 16.9 percent from 2011 to 2016.

Worldwide, public cloud will rake in US$109 billion in revenue in 2012, at a rate of around 17 percent from the previous year.

There are fears Australia's legislative landscape may provide hurdles for the general cloud-computing market. Analysts have pointed out that the recent court case concerning Optus TV Now may scare off potential cloud providers that are looking to expand into the Australian market.

Optus TV Now was a service that allowed customers to store free-to-air TV content in the cloud for later viewing. When Optus lost the copyright infringement court case against the NFL and AFL, the service was subsequently pulled. The Australian government is looking to review the current Copyright Law to determine whether it is an inhibitor to the growth of cloud computing.

Last week, Microsoft technical evangelist Rocky Heckamn said that the US has better data protection laws compared to Australia , and pointed out that cloud service providers operating in the country are able to voluntarily surrender customer data to government organizations if they suspect anything nefarious is going on.

While infringement of copyright is less of a concern for businesses using the cloud, Jester conceded that the enterprise and consumer markets are on a convergence course, and it may become an issue for businesses in the future.

But judging by the healthy growth figures, inadequate legislation isn't really stifling the adoption of public cloud services, according to Jester.

"Obviously, these are issues both provider and users need to think through," he told ZDNet Australia. "When providers are entering a market, regulatory environments is one thing they have to consider.

"But providers are still entering new markets, such as India and China, where there are sometimes quite stringent restrictions."

Australia is one of the fastest growing markets when it comes to public cloud-services spending.

"We are beginning to see now the take-up of infrastructure-as-a-service (IaaS) by enterprises in Australia," Jester said. "It might have been slow to start, but in the past year, it has really kicked in."

By 2016, IaaS is set to account for just under AU$900 million of public cloud spending, which is still not as big as traditional outsourcing, though is certainly making headway.

There is still lingering weariness of using public cloud services by businesses. But as services mature and more credible providers come into play, cautiousness over the public cloud will reduce, Jester said.