Growing demand for cloud services heats up Australian cloud market

Scott Bertsch, Partner and Regional Leader at ISG Asia Pacific

Aussie enterprises are adopting private and hybrid cloud models faster than ever before as they accelerate their digital transformations, according to a research report published by Information Services Group (ISG) (Nasdaq: III), technology research and advisory firm.

What were the findings of the ISG’s report?

The 2022 ISG Provider Lens™ Next-Gen Private/Hybrid Cloud — Services & Solutions report finds demand for hybrid IT, colocation and managed hosting services is increasing due to a range of factors; like ongoing digitalization, sustainability efforts, demand for automation and the effects of the pandemic. A growing array of providers is meeting this demand.

Australia is a competitive cloud services market

“Australia is the most cutthroat cloud services market. Demand is rising and providers are stepping up to meet it,” said Scott Bertsch, partner and regional head, ISG Asia Pacific.

The Australian data center landscape has grown beyond its traditional hubs in Sydney and Melbourne as global, national and regional providers open facilities in many state capitals.

To be leading players, providers now have to cover at least four of the country’s major markets, according to the research by the ISG. Investment in localized solutions is expected to keep increasing as demographic shifts make smaller regions more important.

Sustainability a hot trend

The effects of the pandemic on customer behavior, supply chains and other business aspects have sharpened companies’ need for data center solutions to make them truly digital. This trend will continue because the road to digitalization is a “one-way street,” the report says.

Data centers are also at the center of Australia’s increasing trend toward sustainability, which is fueling a move to greener data center locations, energy systems and management.

Sustainability is a major objective for both enterprises and state governments, and the recently elected national government is likely to increase sustainability requirements. Enterprises are seeking cloud providers that share their green goals. Like many countries, Australia faces a severe shortage of professionals with essential IT and cloud skills, ISG says.

Unemployment has dipped

Unemployment is at or near record lows, and migration into Australia has slowed because of the pandemic. Both enterprises and providers will need to develop and attract new talent while also using technology to reduce the need for workers. “Australian organisations need to invest more in automation to have even a remote chance of meeting the skills gap,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research commenting on the report.

The report covers a wide range of cloud-related trends, which also include the emergence of enterprise edge computing and the growing availability of industry-specific cloud solutions.

What was the methodology of the research?

The 2022 ISG Provider Lens™ Next-Gen Private/Hybrid Cloud — Services & Solutions report for Australia evaluates the capabilities of 43 providers across three quadrants: Managed Services, Managed Hosting and Colocation Services. The report names Telstra as a Leader in all three quadrants. It names Fujitsu and Kyndryl as Leaders in two quadrants each.

Accenture, Datacom, Digital Realty, Equinix, HCL, Infosys, Macquarie Telecom, NEXTDC, NTT DATA, Optus, TCS, Vocus and Wipro are named as Leaders in one quadrant each.

CDC Data Centres, Datacom and Rackspace Technology are named as Rising Stars — firms with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each. The 2022 ISG Provider Lens™ Next-Gen Private/Hybrid Cloud — Services & Solutions report for Australia is available to subscribers or for one-time purchase on this webpage.