Moving beyond “cloud first”


A workload-by-workload approach is yielding improved cloud performance for many Australian organisations, but security strategy and budgets are falling short.

The latest Annual Cloud Report also looks at AI uptake and use cases, and the role IT teams are playing in environmental sustainability governance (ESG) planning and activity.

The results of Datacom’s fourth annual cloud report show Australian organisations have moved well beyond the ‘cloud-first’ mantra of recent years and are taking a workload-by-workload approach to decisions about where to place their applications and data.

While this approach is driving cost efficiencies and performance gains, the complexities of working in hybrid and multi-cloud environments mean that careful planning ahead of migrations or critical cloud infrastructure decisions has become more important than ever.

This year’s research also reveals a critical gap: cloud security. While security was identified as the top tech priority, only 20% of organisations believe they have sufficient budget for security and only 37% have an immutable or offline back-up strategy.

Research for the annual cloud report is commissioned by Datacom and undertaken by Tech Research Asia. Primary research was undertaken with business and IT leaders in 500 organisations across Australia.

We’ve selected some of the report highlights to share below but for more detailed insights and analysis of the research we encourage you to download the full report.

The workload-by-workload era

While “cloud-first” and other all-in approaches are the stated goal for 50% of organisations, the reality is that hybrid cloud arrangements predominate and will continue to do so for the foreseeable future.

Most organisations have largely made their decisions on their preferred platforms whether they be hyperscale cloud, SaaS, private cloud, colocation, edge computing, traditional on-premises, or a hybrid mix of any of these. Public cloud — especially hyper scale providers — continue to achieve solid growth, but so too does private cloud.

workload platform usage stats

Security: top priority but underfunded

Security was once again identified as the top technology priority as companies and public sector agencies attempt to combat a growing wave of ransomware, phishing and software supply chain exploits. But – tellingly – security was also identified as the number one challenge making it hard for organisations to put their cloud strategy into effect, followed by budget constraints.

Security graph

Chasing the data-driven dream

Despite the growing interest in data-driven decision-making and big data, just two in three survey respondents say they are “mature” across a broad array of data-related capabilities, and just 25% consider themselves “highly mature”. It is clear there remains a significant amount of work ahead for many Australian organisations before they can realise the data-driven dream.

Some of the obstacles to successful data-driven approaches include a lack of data literacy inhouse, data silos with organisations storing it across different departments and systems, data quality with dirty or inaccurate data resulting in poor insights. The other area that needs more focus is the policies for data management and control – and issue that will become even more critical with the rise of AI technology.

Maturity levels graph

Policies a critical foundation to harness GenAI boom

We are witnessing a boom in generative AI. While only 29% of the 500 AU respondents said their organisation is currently using AI, a further 57% indicated unofficial AI use and the survey responses identified 200 AI use cases. What we know now as GenAI will evolve rapidly and look considerably different in 12 months' time: capabilities will improve, regulation will emerge, disillusionment will rise and fall, and use cases will diversify even further.

The research uncovered a low adoption of AI oversight and governance processes, which will mean a significant number of businesses are poorly equipped to manage the risks and opportunities associated with AI. We encourage organisations to get critical AI policies and governance in place now.

Ai oversights

IT: roadblock or accelerator for sustainability?

For the first time in our annual research, we looked more deeply into environmental sustainability governance (ESG) and what it means to IT and business leadership across Australia. The research shows that in just 39% of the organisations surveyed, the IT department is proactively involved in sustainability decisions and activities although 43% of organisations have a comprehensive ESG plan that includes the IT environment.

Another notable result was that just 16% of Australian organisations identified as having widespread measurement of ESG efforts in place – something that will be increasingly critical to win major contracts and for compliance with regulation and reporting requirements.

Sustainability approach graph

Future focus: predictions for 2024 and beyond

We are seeing a growing understanding of the complexities of cloud but the rewards and value streams are there for organisations that plan – or partner – wisely. These are our predictions for three critical areas that will need increased focus over the next year.

Digital experience

There will be a resurgence in ANZ organisations revisiting their customer experience strategies in order to boost acquisition and retention. Top line growth will replace profitability as the new driving force in 2024/25.

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computer and tickboxes

AI value streams

What is considered innovation in the Australian market will shift from cloud-native apps and digital services (aka subscription services and digital features) to AI-based capabilities, both for internal and external consumption.

Security challenges

Security will continue to be a challenge that many IT and business leaders are not resourced to meet. We will continue to witness high profile breaches in 2024, with an increasing number of small to medium size businesses being impacted.

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