Here are the top challenges for public cloud users in Australia

Here are the top challenges for public cloud users in Australia

Where is the greatest demand for solutions and integration services among end users of public cloud in Australia likely to emerge?

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Legacy migration costs, gaps in organisational capabilities and complexity in multi-cloud environments are among the top challenges faced by public cloud users in Australia, according to recent research by Boston Consulting Group (BCG)

The findings outlined in Boston Consulting Group’s Ascent to the Cloud: How Six Key APAC Economies Can Lift-off report highlights the position Australia holds in the global public cloud market, with the country being among one of the front-runners in terms of usage and investment. 

According to BCG, Australia is one of the most advanced public cloud markets in the broader Asia Pacific region, and is expected to grow even larger, from a market value of US$4.7 billion in 2018 to US$10.5 billion in 2023. This equates to a compound annual growth rate (CAGR) of 17 per cent over the next five years, the report revealed.

While the software-as-a-service (SaaS) subsector is currently the largest segment by far, making up 70 per cent of the market, according to the report, infrastructure-as-a-service (IaaS) is well on its way to becoming the fastest growing segment between 2019 and 2023, with a projected CAGR of 21 per cent. 

The BCG report suggests that media and gaming companies have been major drivers of public cloud adoption in Australia, as have retailers and financial services institutions, although all industry verticals appear to be aware of the benefits of the public cloud.

But as the public cloud market in Australia continues to heat up and the volume of applications deployed on the public cloud grows, greater complexity is being introduced into the landscape, with businesses increasingly using multiple vendors and hybrid clouds. 

Unsurprisingly, then, there is a strong appetite among end users for solutions that make it easier for enterprises to manage a multi-cloud environment, according to BCG. This is where solutions providers and their integration partners can step in to help fill the gaps. 

To help local partners identify the areas in which the greatest demand among end users of public cloud in Australia is likely to emerge, BCG has helpfully outlined three of the top challenges to public cloud users in the local market. They are:

Legacy migration cost and risk

The report suggests that migrating and integrating existing systems and databases is a particular challenge in Australia. This is largely because a fair proportion of businesses in the local market are large, established multinationals with significant investments in legacy technologies, BCG said.

“They also tend to hold large storehouses of legacy data. Transferring historical data from traditional devices such as tapes or disks is a complex and risky exercise for large enterprises, including many banks, financial firms, insurance companies, and public sector agencies,” the report stated. 

Gaps in organisational capabilities

There are concerns that the gaps in skills and capabilities around public cloud will widen, according to BCG, despite providers and users already investing in employee training for the public cloud, and working with systems integrators to meet current gaps.

“The current supply of cloud-native talent is not large enough to match the rapidly growing demand, and many organisations in Australia say they are struggling to develop their internal team capabilities,” the report said. “In selecting a cloud provider, organisations look for one with services that are easy to use. 

“A provider that offers internal training is also highly valued, particularly if the training is aimed at day-to-day management of public cloud platforms and fostering a deeper understanding of how the public cloud can enable advanced digital capabilities,” it stated.  

Complexity of managing multi-cloud environment

According to BCG, while most companies in Australia are interested in advanced uses for the public cloud, they are also often eager to explore operating in a multi-cloud environment so that they can gain from the expertise of a variety of providers, along with their private cloud and on-premise setups, and avoid being locked in with one vendor.

“An IT leader at a systems integrator told us that when a company wants help with moving to the cloud, one of the requirements is that the integrators build systems for the company that are provider-agnostic, so that the organisation doesn’t have to depend on a single provider,” the report stated. “Working with multiple providers is a complicated proposition, and users need support in managing their multiple environments.”

As far as BCG is concerned, the stage is set for Australia’s public cloud market to continue on a strong path, with enterprises showing continued interest in using cloud technology to help develop advanced digital capabilities, and government agencies actively using the public cloud to enhance services. 

But the availability of cloud skills, or lack thereof, remains a challenge in the local market.

“The main stumbling block to a more rapid growth scenario than the baseline is the supply of cloud-savvy talent that the country will need as demand for public cloud services increases,” BCG said in its report. “Australia would do well to push for more widespread cloud literacy and hands-on training of IT professionals.

“With a joint effort on the part of cloud service providers (CSPs), government and business, use of the public cloud stands to generate a particularly notable effect on the economy and employment,” it said.

If things go well, however, public cloud usage in Australia stands to create close to 26,000 direct jobs over the next five years, to 2023, according to BCG’s figures, with roughly 13,000 of the jobs directly arising from cloud usage set to be in non-digital roles such as sales, marketing, human resources, finance, logistics and operations.

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