​Are trans-Tasman businesses “too enthusiastic” about Cloud?

​Are trans-Tasman businesses “too enthusiastic” about Cloud?

“Cloud is a hot topic, but many local organisations are getting a little too enthusiastic about it.”

“Cloud is a hot topic, but many local organisations are getting a little too enthusiastic about it.”

That’s the stark view of Michael Warrilow, Research Director, Gartner, when assessing the major infrastructure and data centre trends in Australia and New Zealand in 2016.

Speaking ahead of the Gartner IT Infrastructure, Operations and Data Centre Summit in Sydney in May, Warrilow believes trans-Tasman businesses are “making dangerous assumptions” that it will always save them money, which it’s not necessarily going to do.

“What they will get is more agility and a different mix of capex and opex, which the business likes,” Warrilow says. “I have this conversation every week with companies in Australia and New Zealand now.”

For Warrilow, another notable trend is the continuing movement away from owning a datacentre, which is “really pronounced here” compared with other markets such as Europe and the US.

“Concerns about supply and capacity have diminished, with Cloud being seen as almost limitless and many commercial providers in the local market,” Warrilow said.

“Businesses don’t want to have all their capital tied up in datacentre facilities, when they can be spending it in other areas. Instead, they’re using an increasing mix of co-location, hosting and Cloud.”

Locally speaking, Warrilow says legacy modernisation is still an important issue - in Gartner’s 2016 CIO survey, Australian and New Zealand CIOs placed it as an equal priority to infrastructure and datacentre.

“There’s still mainframe systems out there for really big workloads, particularly in government and banks,” Warrilow adds.

“These businesses want to know how they can keep it in the fold and relevant, so modernisation is important. There are few alternatives at this point - it’s a captive market with organisations still spending serious money on it.”

Digital business

Digital business has created the need for organisations to go faster, which for Warrilow, provides an “inherent conflict” - “the faster the business goes, the more risk it introduces”.

From Warrilow’s perspective, local organisations also won’t risk maintaining high availability, which compels them to go slower.

“It’s a vicious circle,” Warrilow adds. “Bimodal IT is so important here. It’s where two separate modes of IT delivery are managed - one focused on stability and the other on agility.”

In Gartner’s 2016 CIO survey, Australian and New Zealand CIOs are moving faster than global peers into a bimodal working model, with 72 per cent either already doing it or planning to within three years.

“So the positive news is that local organisations are getting their bimodal strategies together, but some assumptions around cost remain an issue,” Warrilow said.


Gartner is seeing a decline in new virtualisation licenses in Australia for the first time since it became mainstream well over a decade ago, although overall revenue is still growing due to maintenance.

“Australia has always been a leader in virtualisation, but growth has now reached its peak,” Warrilow said.

“Smaller and medium sized business have already started using it less and will continue to reduce their usage.”

Warrilow believes one of the main reasons for this is that businesses are not getting the return they need.

“There’s a minimum investment in skills that is needed for virtualisation and when you can get more of a turnkey solution from hyperconverged integrated systems (which scale out, not up, for a more modular and agile approach to deployments) or Cloud, these technologies start becoming more attractive,” he said.

As such, Warrilow said the challenge for organisations then becomes choosing the right platforms given all of the changes.

For the server environment, what was just a few storage and server vendors is now an increasing mix of storage hardware and software, plus a new breed of hyperconverged players.

Private Cloud

When assessing the future of private Cloud in Australia and New Zealand, Warrilow recalls that only a few short years ago, internal private cloud infrastructure would seem the likely evolution of server virtualisation in the datacentre.

However, successful adoption is being restricted by complexity, enterprise immaturity and the effort required, such that providers must plan carefully or risk over investment.

“In fact, we are now at a point that Gartner survey data shows a decline in enterprises expecting internal private cloud to be their primary Cloud deployment model,” Warrilow adds.

“In contrast, hosted private Cloud is expected to almost double as the primary model. Then there’s hybrid Cloud, which also appears set for growth.”

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