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Public cloud adoption set to surge in Australia

New and existing workloads are increasingly being migrated to public cloud, with two-thirds of Australian organisations already running cloud workloads in production in 2022

Public cloud spending in Australia is set to grow by 83% from A$12.2bn in 2022 to A$22.4bn in 2026, as organisations seek to increase their capabilities and optimise costs, a study has found.

According to a IDC whitepaper commissioned by Microsoft, new and existing workloads are increasingly being migrated to public cloud platforms in Australia, with two-thirds of organisations already running cloud workloads in production last year. A further 17% are also using public cloud services for test and development environments.

IDC noted that the key drivers of cloud adoption in Australia were improving operational processes, driving business efficiency, and responding to new ways of working arising from the pandemic. In fact, most enterprises will shift to a cloud-centric IT infrastructure and application services twice as quickly as compared to before the pandemic, it added.

“Cloud computing enables organisations to free up IT resources so they can achieve more technology and business innovation to drive revenue growth,” said Linus Lai, research vice-president at IDC Asia-Pacific and co-author of the whitepaper.

“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,” Lai added.

With maturing adoption of cloud computing in Australia, more organisations are also adopting hybrid and multicloud offerings. IDC noted that this will be the “catalyst for an entire set of new technologies, products, and services”.

“In 2022, most organisations already have multicloud environments and public cloud services, with an enormous range of services tailored to vertical solutions – comprising an essential part of an organisation’s cloud strategy,” it said. “It is the increasing use of specialised applications to suit specific industries that is stimulating the growth of the number of cloud service providers used by an organisation,” it added.

Steven Worrall, managing director of Microsoft Australia and New Zealand, noted that the strong demand for public cloud services is showing no signs of slowing, as organisations continue to transform their business operations, speed up innovation and capitalise on technologies such as artificial intelligence and data analytics.

“Cloud technology will also help organisations remain resilient in today’s challenging economic environment by enabling them to simplify their IT systems and processes, reduce costs and minimise risks,” he added.

Public cloud adoption, and adjacent areas such as cyber security, data mining and analytics, is also expected to create nearly 600,000 jobs in Australia, the whitepaper noted. About 20% of these jobs will require specific technical and IT-related digital skills, but the shortage of cloud skills is proving to be a barrier to realising the benefits of cloud.

According to a recent cloud adoption study by Accenture, over a third of companies rated the lack of cloud skills as their top three concerns, which has stayed unchanged since 2020 when the study was last conducted. Security and complexity were also frequently cited barriers, further exacerbating the overall tech talent crunch.

Jonathan Taylor, managing director for cloud, infrastructure and engineering at Accenture Australia, said that while cloud engineering, data engineering and cloud architecture talent continues to be difficult to acquire and retain, the fact that companies are now innovating with cloud technologies – not just around customer experience but also in core business processes – requires a broader set of skills.

“It’s not just about tech and transformation – it’s also about understanding how to innovate and be really close to the business problem,” Taylor told Computer Weekly. “It’s an interesting conundrum that’s increasing the skills shortage in some ways, because now we've got a broader set of skills we need.”

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