Greatresponder.com on Nov 26, 2012: The usage of cloud computing has grown over the past couple of years in New Zealand, as companies adopting cloud computing to improve business agility, increase standardization of IT infrastructure and lower cost of delivering IT services.
Phil Harpur, Senior Research Manager, Australia & New Zealand ICT Practice, Frost & Sullivan says that 57% of organisations in New Zealand that are currently using cloud solutions plan to increase their cloud-based solutions budget significantly over the next 12 months, reflecting a market very much in a growth phase.
Compared to Australia, where 70% of organisations plan to increase their spending on cloud services, New Zealand’s tempered growth is largely due to data sovereignty and latency issues. “Local providers guarantee data remains in New Zealand but are more expensive than multinationals hosting data offshore, thus the value proposition is not as strong” Harpur explained.
Potential for share of pie in the cloud
Software as a Service (SaaS) is the most commonly used delivery model in the cloud offering several benefits over on-premise software such as lower upfront costs, standardisation and ease of upgrade, ubiquitous access and seamless integration with in-house infrastructure. Adoption rates of SaaS applications are positively correlated with the size of the organisation. Larger organisations are more likely to be using software applications accessed via the cloud, especially for office productivity applications, CRM, HRM and ERP.
Benefits of moving to the cloud
The ability to lower overall IT costs is the leading driver for the adoption of cloud computing. Andre Clarke, Country Manager, New Zealand, Frost & Sullivan says “Moving to the cloud enables organsiations to reduce CAPEX, and provides a great deal of flexibility and agility allowing organisations to add scalable computing resources very quickly and at relatively low cost. This in turn greatly reduces some of the risk associated with developing new products which in the medium to long term will help stimulate market innovation.”
“Key challenges include integrating “shadow IT” cloud purchases into a corporate framework, ensuring effective SLAs and security measures are in place, and managing the increased level of complexity that comes with combining multiple clouds with on-premise resources” Clarke mentions.