Can Australia lead global cloud market?


news The Australian Government’s IT industry advisory body has stated in a report that the nation has the scope to become a global leader in cloud computing technology and drive innovation and productivity.

Releasing the report by the Information Technology Industry Innovation Council (ITIIC) this week, Innovation Minister Senator Kim Carr said that it emphasised Australia’s strengths in the IT arena. “Australia has an opportunity here, to develop a strong local capability in cloud computing. We are a safe, secure destination for hosting cloud data applications, and offer political stability, and a stable and transparent regulatory environment,” said Carr.

Cloud computing has been expanding in Australia and currently, according to the report, more than 71 percent of companies use a cloud-based service – an almost one-third increase over the past two years. “Innovative Australian IT firms with leading-edge cloud technologies can cash in on the projected rapid growth in the global market for cloud products and services, with an estimated global value of over US$55 billion in 2014,” Carr said.

The report further suggested that not all firms are geared to handle the cloud revolution and need to adapt to the new technology. “Those providing software solutions and services will need to adapt to cloud-based infrastructure and those providing on-premise services and infrastructure will need to enhance their offerings to become part of a cloud provider marketplace,” suggested Carr.

Adopting cloud computing as an IT strategy has multiple benefits such as improved operational efficiencies, increased market penetration, reduced costs, better hedging in IT investments, and quicker adaptability to fluctuating market conditions.

The report said that Australian-based cloud services might also have an edge vis-à-vis critical issues like data security, risk management, privacy, sovereignty and service quality. Carr said that the newly formed Global Access Partners (GAP) National Standing Committee on Cloud Computing – which comprises Federal and State government agencies, the research community, industry leaders and advocacy groups – would further discuss the issues raised by the ITIIC.

In January this year, a worldwide survey by Gartner of more than 2,000 CIOs identified cloud computing as a top priority for many organizations. In this survey, cloud computing and virtualisation were recognized as the top two technologies most desired by CIOs for cost effective and efficient operations.
CIOs expect to adopt cloud services much faster than originally anticipated, with 43% projected to have the major part of their IT running in the cloud over the next four years. This dovetails well with Australia’s plans in this arena.

A number of small firms promoting cloud computing have sprung up in Australia over the past several years, with Sydney-based companies OrionVM and Ninefold being examples. In addition, a number of larger companies with strong Australian presences — such as as Telstra, Optus, Fujitsu, CSC and more — have invested heavily in building Australian cloud computing infrastructure.

I’m surprised by this report. If there was any area which I thought Australia would be relatively poorly positioned to play globally in, I would have thought it to be cloud computing. The reason for this is that the cost of building and operating datacentres in Australia, as well as data transit costs to the rest of the world, is simply quite a bit higher than it is in other countries. With a limited local market to boot, these are the reasons why Australia’s cloud computing market has been relatively slow to take off.

On the other hand, Australia does have a number of data links to Asia, and our solid regulatory structure and stable government and commercial sector might lead to us being seen as a strong regional hub for cloud computing solutions which could be provided to the wider Asia-Pacific region. I could certainly see that happening. And we have one of the highest rates of corporate virtualisation in the world, so there is clearly strong potential for that to be leveraged into wider expertise in advanced datacentre modernisation and Infrastructure as a Service.

So is this report just jumping on the cloud computing bandwagon, flagging a hyped area to the Government as being worthy of investment? It’s hard to tell at this point. At this stage I would see it as a mix of optimism and pragmatism. Just what the Government does with it is another matter ;)

Image credit: Mackenzie and John, Creative Commons. Opinion/analysis by Renai LeMay.


  1. Yes – we’re pretty poorly placed for cloud computing. Expensive labour, expensive real estate, expensive power, no real economy to speak of globally.

  2. My opinion hinges on the “…to develop a strong local capability in cloud computing”.

    If he means make locally to provide globally, then I want some of what he is smoking.

    If he means providing for local industry, then yeah, I can see this working simply to dodge the cost of paying law types on the implications of exporting sensitive data to all ends of the earth (and to be able to court government departments.) Also the ability to go and metaphorically knock some heads together in person is an advantage if service issues arise.

  3. I would also agree with your assessment. It seems the operational costs as compared to other locations for hosting or supporting would be prohibitive.

Comments are closed.