ANZ public cloud adoption to surge, says Microsoft

A new white paper commissioned by Microsoft predicts that by 2026, public cloud adoption will generate billions of dollars in new revenue for organisations within the cloud technology ecosystem in Australia and New Zealand. That includes organisations implementing public cloud technology — customers — as well as suppliers of the hardware, software and services that enable its delivery.

The paper, titled ‘Public Cloud Services Opportunities and Dividends to the Australian and New Zealand Economies’ and published by International Data Corporation (IDC), finds the adoption of public cloud services has risen steadily since the pandemic started, with organisations seeking to increase their capabilities and optimise costs. IDC says this trend is set to accelerate as organisations embrace public cloud as the go-to platform for digital transformation.

According to the white paper:

• Public cloud spending in Australia is set to increase by 83% from A$12.2 billion in 2022 to A$22.4 billion in 2026.
• Public cloud spending in New Zealand is expected to nearly double in the same period from NZ$2.6 billion to NZ$5.1 billion
• Public cloud adoption in Australia will generate A$123.7 billion in revenue across the nation’s cloud customer and supplier ecosystems in 2022 (equivalent to more than 5% of GDP).
• Public cloud adoption in New Zealand will generate NZ$23.9 billion across the nation’s cloud customer and supplier ecosystems in 2022 (equivalent to almost 6% of GDP).
• Public cloud deployments will generate cumulative new revenue of more than A$114 billion in Australia and NZ$21 billion in New Zealand for cloud customer and supplier ecosystems by 2026.
   

“Cloud computing enables organisations to free up IT resources so they can achieve more technology and business innovation to drive revenue growth,” said Linus Lai, Research Vice President at IDC Asia/Pacific and co-author of the white paper.

“Investment in cloud computing services also drives revenue growth for organisations that make up the supplier ecosystem. These include systems integrators, software providers and professional services providers.”

The white paper also finds that public cloud adoption and adjacent areas such as security, data mining or analytics will create 596,750 jobs in Australia and 134,000 in New Zealand. Approximately 20% of these jobs will require specific technical and IT-related digital skills.

With demand for digital skills already high and getting higher, organisations should be investing in upskilling their existing workforce to build the necessary cloud knowledge and capabilities. The white paper notes that managing cloud environments requires specialised capabilities and that the availability of these skills has not been able to keep up with demand. This is a key hindrance for organisations on their cloud adoption journey. In fact, the white paper finds that a shortage of people with relevant skills is one of the top 10 governance-related roadblocks for Australian and New Zealand businesses seeking to take full advantage of the cloud.

Furthermore, organisations with existing cloud migration strategies will continue to adopt public cloud services pre-emptively to drive business efficiency, while those without strategies in place will be forced to adapt to cloud reactively.

“It’s clear that the strong demand for public cloud services in Australia and New Zealand shows no signs of slowing, as organisations continue to transform their business operations, accelerate the pace of innovation, and capitalise on technologies such as AI and data analytics,” said Steven Worrall, Managing Director of Microsoft ANZ.

“Cloud technology will also help organisations remain resilient in today’s challenging economic environment by enabling them to simplify their IT systems and processes, reduce costs and minimise risks,” he said.

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