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Growing Demand Heats Up Australian Cloud Market

Growing Demand Heats Up Australian Cloud Market

More companies are adopting private/hybrid clouds as they accelerate digitalization, automation and sustainability drives, ISG Provider Lens report says

Australian enterprises are adopting private and hybrid cloud models faster than ever before as they accelerate their digital transformations, according to a new research report published by Information Services Group , a leading global technology research and advisory firm.

“Demand is growing, and all types of providers are stepping up to meet it.”

The 2022 ISG Provider Lens Next-Gen Private/Hybrid Cloud — Services & Solutions report for Australia finds demand for hybrid IT, colocation and managed hosting services is increasing due to a range of factors, including ongoing digitalization, sustainability efforts, demand for automation and the effects of the COVID-19 pandemic. A vast, growing array of providers is meeting this demand.

“Australia is arguably the most competitive cloud services market in the world,” said Scott Bertsch, partner and regional head, ISG Asia Pacific. “Demand is growing, and all types of providers are stepping up to meet it.”

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The Australian data center landscape has grown beyond its traditional hubs in Sydney and Melbourne as global, national and regional providers open facilities in many state capitals. To be leading players, providers now have to cover at least four of the country’s major markets, ISG says. Investment in localized solutions is expected to keep increasing as demographic shifts make smaller regions more important.

The effects of the pandemic on customer behavior, supply chains and other aspects of business have sharpened Australian companies’ need for data center solutions to make them truly digital. This trend will continue because the road to digitalization is a “one-way street,” the report says.

Data centers are also at the center of Australia’s increasing trend toward sustainability, which is fueling a move to greener data center locations, energy systems and management, ISG says. Sustainability is a major objective for both enterprises and state governments, and the recently elected national government is likely to increase sustainability requirements. Enterprises are seeking cloud providers that share their green goals.

Like many countries, Australia faces a severe shortage of professionals with essential IT and cloud skills, the report says. Unemployment is at or near record lows, and migration into Australia has slowed because of the pandemic. Both enterprises and providers will need to develop and attract new talent while also using technology to reduce the need for workers, ISG says.

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“Australian companies need to invest more in automation to have even a remote chance of meeting the skills gap,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research.

The report covers a wide range of cloud-related trends in Australia, which also include the emergence of enterprise edge computing and the growing availability of industry-specific cloud solutions.

The 2022 ISG Provider Lens™ Next-Gen Private/Hybrid Cloud — Services & Solutions report for Australia evaluates the capabilities of 43 providers across three quadrants: Managed Services, Managed Hosting and Colocation Services.

The report names Telstra as a Leader in all three quadrants. It names Fujitsu and Kyndryl as Leaders in two quadrants each. Accenture, Datacom, Digital Realty, Equinox, HCL, Infosys, Macquarie Telecom, NEXTDC, NTT DATA, Optus, TCS, Vocus and Wipro are named as Leaders in one quadrant each.

In addition, CDC Data Centres, Datacom and Rackspace Technology are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.

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