Public Cloud To Add $21 Billion To NZ Economy By 2026

A new study commissioned by Microsoft reveals public cloud adoption generated revenues worth six per cent of GDP in 2022, with billions more expected to be added to the economy over the next five years.

The IDC InfoSnapshot, sponsored by Microsoft, Public Cloud Services Opportunities and Dividends to the Australian and New Zealand Economies, calculates public cloud adoption generated NZ$23.9 billion in new revenues for New Zealand businesses in 2022 – around six per cent of GDP. By 2026, cloud delivery is expected to add NZ$21 billion to the economy above this level and generate 134,000 new jobs as a result of new capabilities and growth.

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.

Microsoft New Zealand National Technology Officer, Russell Craig, says the forthcoming arrival of Microsoft’s first New Zealand hyperscale datacenter region, part of a datacenter investment boom in this country, has also spurred organisations to explore public cloud more than ever.

“The beauty of public cloud computing is its deflationary effect. It enables organisations to free up IT resources so they can spend more time innovating on new services and technologies that benefit their business and customers, and create greater efficiencies for the wider business,” Craig said.

“Major enterprises like ASB and Fonterra and public sector organisations like Auckland Transport are migrating to our new datacenter region for this very reason. Meanwhile, SMBs are excited because they’ll be able to access the same technologies as those major enterprises without having to invest in their own infrastructure, benefiting from Microsoft’s global investments in things like security and AI, and the vast pool of shared data in the public cloud that’s driving constant upgrades and improvements. The pandemic has helped create the realisation that businesses who are tapped into public cloud systems are more resilient and more competitive.”

Customer 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 IDC study shows spending on public cloud is expected to double in the next five years, from NZ$2.6 billion in 2022 to NZ$5.1 billion in 2026.

The one caveat is the ongoing digital skills shortage. While just 20 per cent of the new roles created would be technical roles in IT, digital literacy would be crucial for almost every worker as the use of cloud expanded.

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 whitepaper notes that managing cloud environments requires specialised capabilities and that the availability of these skills has not been able to keep up with demand.

Vanessa Sorenson, Managing Director of Microsoft New Zealand, said Microsoft had been investing significantly in initiatives to skill students, workers and career-changers for the public cloud era, particularly targeting greater diversity, and wanted to encourage other organisations to do the same.

“The greater innovation cloud brings can’t be fully realised unless we bring in as many people from as many backgrounds as possible with different ways of thinking and seeing the world. That’s why we’ve been working hard to address the underrepresentation of women, Māori and Pacific Island peoples in tech, through programmes such as #10KWāhine and our partnership with leadership organisation TupuToa and working alongside customers like Auckland Transport to upskill their workforce. But we know we can’t do it alone. The more people with digital skills we have, the more we all benefit, so we encourage every organisation to think about how they’re preparing for hyperscale cloud,” she said.

For more information or to download the report, visit the Microsoft New Zealand News Centre https://news.microsoft.com/en-nz/

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