SaaS dominates New Zealand cloud spending

Increased spending is planned on cloud-based services but data sovereignty restrictions remain a barrier in the public sector.
Written by Rob O'Neill, Contributor

New Zealand organisations are planning increased spending on cloud services, much of it in the adoption of cloud-based office productivity applications.

63% of New Zealand organisations now using cloud systems plan to increase their cloud budget over the next year, up  from 57% in 2012. Meanwhile, 33% of organisations indicated flat spending on cloud services, a decrease from 40%, according to research from Frost & Sullivan.

While much of the adoption appears to be low-hanging fruit such as office productivity applications and SaaS, Infrastructure as a Service (IaaS) use has also spiked.

Over the next 12 months, at least 25% of organisations not currently accessing office productivity applications (e.g. Google Docs) via the cloud are likely to do so. CRM, Desktop and Analytics and Business Intelligence are the SaaS applications most likely to be migrated while HRM, e-mail security and ERP are less likely to be migrated to the cloud.

The “State of Cloud Computing New Zealand 2013” report finds that 47% of New Zealand organisations using cloud services spend more than 10% of their total IT budget on cloud services and 32% spend more than 20%.

E-mail and storage and office productivity solutions are most accessed via the cloud. 88% of New Zealand organisations access e-mail via the cloud - 33% via public cloud, 38% via private cloud and 17% via a hybrid model.

Andre Clarke, country manager for Frost & Sullivan, said IT cost reduction, reduced risk of IT disruption from external factors such as natural disasters, greater business agility and flexibility, enhanced IT infrastructure efficiency and faster deployment time are all factors driving adoption.

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 also been very strong over the past two to three years.

IaaS has seen a huge spurt in adoption in the last 12 to 24 months due to an increasing number of local market participants, said Clarke.

Data sovereignty remains a prominent issue, particularly in the public sector where the government cloud strategy mandates that all data remains in New Zealand.

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