Hyperscale cloud investment in NZ a game-changer, says Internal Affairs

Hyperscale cloud investment in NZ a game-changer, says Internal Affairs

Government aims to couple hyperscale cloud with advanced tech for projects with national impact

Credit: Photo 1804908 © Chrishowey -

Investments by Microsoft and AWS in New Zealand hyperscale cloud services represent a "game changer" for NZ's digital maturity, the Department of Internal Affairs says.

That market shift and positive government response could pose challenges for local IaaS providers, most prominently Datacom and Spark, which have fared well in their fight for cloud market share to date.

Microsoft's recent announcement that it would build two local Azure cloud datacentres in Auckland and AWS' response, with new edge locations and earlier Outposts capabilities, are seen as potential accelerators for the use of cloud in government.

Now, the Digital Public Service (DPS) branch at the Department of Internal Affairs (DIA) is rewriting its policy and system settings for cloud technology with the help of the chief digital officer, chief privacy officer, chief data steward and chief information security officer.

This work will include producing new guidance for the use of cloud by government agencies.

The government’s cloud programme supports the public service to accelerate the use and benefits of cloud in line with government’s cloud-first policy.

"A focus for the next 24 months will be to establish an all-of-government cloud centre of excellence, supporting agencies to successfully execute well-designed and governed cloud migrations," the announcement said. 

The DPS branch is working actively with agencies to support their cloud adoption planning, and to foster collaboration on common cloud-related challenges.

"The programme also has a focus on engaging with cloud providers to refresh and continually improve New Zealand’s access to cloud services, while adjusting public service policies where needed and progressing a number of agreed ‘lighthouse’ innovation partnerships."

These early partnerships are in the areas of education, environment, business and land and will look to couple hyperscale cloud with advanced technologies to deliver solutions that have national impact.

The DPS branch will be recruiting key positions for the programme to build further capability and capacity. 

IDC senior analyst Prabhitha Dcruz told Computerworld last week that global hyperscale cloud providers often account for 70 per cent to 80 per cent of IaaS market share across Asia-Pacific excluding China and Japan. 

However, New Zealand is a different story.

“Local vendors such as Spark and Datacom together account for 43 per cent of the overall NZ IaaS market share," Dcruz said. 

"From a public cloud IaaS perspective, Amazon Web Services has the largest market share of 23 per cent, followed by Microsoft at 19 per cent. 

Late entrant Google had just 1 per cent market share in 2019, Dcruz said.

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