NZ companies and cloud solutions
Frost & Sullivan: 40% of New Zealand companies spend 10% of
IT budget on
cloud solutions; 57% intend to
increase cloud based budgets
Ability to lower
overall IT costs is the leading driver for adoption
of
cloud computing; security the top criteria for selecting a
cloud vendor
Auckland, 26 November 2012 – Interest
in cloud computing has grown
substantially over the
past couple of years. Enterprises in New Zealand
are
constantly evaluating adoption of cloud
computing to improve business
agility, increase
standardisation of IT infrastructure and lower cost
of
delivering IT services.
Frost & Sullivan’s
research, State of Cloud Computing New Zealand
2012
reports that of the organisations in New Zealand
that currently use cloud
computing services, 40% spend
more than 10% of their total IT budget on
cloud solutions
or services, while 20% spend more than 20% of their
total
IT budget. Larger organisations generally spend
significantly more on cloud
computing services than
smaller ones.
Phil Harpur, Senior Research Manager,
Australia & New Zealand ICT Practice,
Frost & Sullivan
says that 57% of organisations in New Zealand that
are
currently using cloud solutions plan to increase
their cloud-based
solutions budget significantly over the
next 12 months, reflecting a market
very much in a growth
phase.
Security was cited as the most important
criteria when selecting a cloud
vendor, followed by
trust, reliable services and support,
hosting
capabilities in NZ, company reputation, value
added services, price and
ROI. “Vendors must also have
sufficient SLAs, a good product roadmap, offer
sufficient
product scalability and demonstrate strong channel
partner
capabilities” Harpur added.
Compared to
Australia, where 70% of organisations plan to increase
their
spending on cloud services, New Zealand’s
tempered growth is largely due to
data sovereignty and
latency issues. “Local providers guarantee
data
remains in New Zealand but are more expensive than
multinationals hosting
data offshore, thus the value
proposition is not as strong”
Harpur
explained.
Benefits of moving to the cloud
The
ability to lower overall IT costs is the leading
driver for the
adoption of cloud computing. Andre
Clarke, Country Manager, New Zealand,
Frost & Sullivan
says “Moving to the cloud enables organsiations to
reduce
CAPEX, and provides a great deal of
flexibility and agility allowing
organisations to add
scalable computing resources very quickly and
at
relatively low cost. This in turn greatly
reduces some of the risk
associated with developing
new products which in the medium to long term
will help
stimulate market innovation.”
It also allows
organisations to free up key resources previously
dedicated
to more traditional IT services and focus on
other aspects of operations
while providing flexibility
to meet business demand via
real-time /on-demand
computing.
Cloud deployments of most New Zealand
organisations are fully deployed
rather than in pilot
phase. HRM and Unified Communications are the
slowest
applications to move out of pilot phase, whereas
storage & computing
solutions have the highest rate of
full deployment.
“Key challenges include integrating
“shadow IT” cloud purchases into a
corporate
framework, ensuring effective SLAs and security measures are
in
place, and managing the increased level of complexity
that comes with
combining multiple clouds with on-premise
resources” Clarke mentions.
Potential for share of
pie in the cloud
Software as a Service (SaaS) is the most
commonly used delivery model in
the cloud offering
several benefits over on-premise software such as
lower
upfront costs, standardisation and ease of upgrade,
ubiquitous access and
seamless integration with in-house
infrastructure. Adoption rates of SaaS
applications are
positively correlated with the size of the
organisation.
Larger organisations are more likely to be
using software applications
accessed via the cloud,
especially for office productivity applications,
CRM, HRM
and ERP.
Data sovereignty is a prominent issue in New
Zealand, particularly in the
public sector, where the
government’s cloud strategy mandates that in
certain
scenarios data remain in New Zealand; thus limiting the
number of
potential suppliers. Those with NZ data centres
are advantaged, while
others have and will forge
partnerships to meet this requirement.
E-mail and storage
& computing resources (ie.IaaS) are commonly accessed
via
the cloud with 53% of New Zealand organisations accessing
e-mail via
the cloud, and 44% accessing storage &
computing resources via the cloud.
Office productivity
applications, web security and e-mail security are
also
commonly accessed via the cloud.
Frost &
Sullivan's State of Cloud Computing New Zealand 2012 report
forms
part of the Frost & Sullivan New Zealand Enterprise
Communications program.
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