Australia ahead on GenAI but skills and security threaten value: report

Australia is moving faster than global peers when it comes to implementing GenAI strategies and containerising applications, but skills shortages and security fears could hinder progress, according to the seventh annual Nutanix Enterprise Cloud Index report.

According to the report, more than 80% of Australian organisations have a GenAI strategy in place, and 61% are actively implementing it, six points ahead of the global average (55%). Common use cases include customer support solutions (55%) and code generation tools (48%).

Yet, despite this rapid uptake, only 53% of Australian respondents feel they have the necessary skills to support cloud-native apps/containers, a key ecosystem for GenAI applications. This is 10 points lower than the APJ average of 63%. Further, 83% say their infrastructure needs at least moderate improvement to support these workloads.

Michael Alp, managing director, Nutanix A/NZ, said the findings highlight Australian organisations aren’t short on ambition, but there’s a growing gap between strategic intent and operational execution.

“The smartest move we’re seeing right now is organisations upskilling the engineers and developers already on the ground for the new cloud-native world. These teams then take their new cloud-native skills, along with institutional IT knowledge, to make smarter infrastructure decisions that keep innovation moving, not breaking,” he said. “It’s a faster, more sustainable way to build the future and overcome the pervasive local skills gap.”

Meanwhile, 100% of surveyed organisations in Australia are at least in the process of containerising their applications, with nearly a third (31%) stating all newly developed applications are containerised. This is significantly higher than the APJ average of 22%. AI is driving this containerisation surge with three-quarters (75%) of Australian respondents citing Gen AI applications as the most containerised applications in their organisation.

“There is a quiet revolution underway within Australian organisations and that revolution is the shift to cloud-native,” Alp said. “Containerisation is becoming the default, not the upgrade. That tells us it’s already embedded in how teams are thinking and delivering from day one.

“The flip side of this shift — as is clear in the data — is that some organisations may struggle to drive their GenAI momentum forward, as they lack the skills, structure and scale needed to turn all this progress into long-term performance.”

Other key findings from this year’s Australian results also reveal privacy issues, ROI expectations and the growing use of MLOps platforms

Data privacy action lags behind intent

While 98% of Australian respondents agree security and data privacy is a top priority when implementing GenAI, only 27% identify it as the most important data-related consideration once the work begins. This gap reveals a clear disconnect between stated values and on-the-ground priorities — organisations are talking-the-talk about privacy, but many are struggling to walk it.

With privacy and security risks ranked as the top barrier to GenAI expansion, this misalignment could become a major stumbling block as projects scale.

GenAI ROI expectations grow with time

While 38% of Australian respondents expect GenAI projects to break even or incur losses in the first year, that figure drops to 28% over the next one to three years. This suggests a shift in mindset among decision-makers towards a longer-term view of success: measuring ROI over multiple years rather than chasing short-term wins.

It’s also a sign of maturity in how organisations are approaching GenAI, allowing room for experimentation, setbacks and course correction, rather than abandoning projects that don’t deliver immediate results.

MLOps platforms emerging as innovation enablers

More than half (54%) of respondents say their organisation is using third-party machine learning operations (MLOps) to accelerate building, training and deploying GenAI without having to build complex infrastructure from scratch.

In doing so, organisations are creating faster feedback loops, reducing friction, and pushing GenAI solutions into production more quickly. But, it also suggests organisations are increasingly leveraging managed platforms to offset internal capability gaps.

To learn more about the report and findings, the full seventh Nutanix Enterprise Cloud Index can be downloaded here.

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