Ahead of the Gartner Infrastructure, Operations and Data Center Summit in Sydney next month, we asked research director and conference chair Michael Warrilow about trends in the Australian IT infrastructure and data center market in 2015, particularly in light of fierce competition between global cloud infrastructure-as-a-service providers in the local market over the past 12 months.
1. What are the major infrastructure and data center trends in Australia for 2015?
Cloud and infrastructure/data center are in the top four technology priorities for discretionary spending by CIOs in Australia in 2015 (coming in at second and fourth places), according to Gartner’s annual CIO survey. However, there is a lot of economic pressure occurring in Australia at the moment in IT, with cost optimization a big focus this year. Organizations want to have more flexibility and agility by moving away from fixed costs, which is one reason why cloud rates so highly. Similarly, organizations are finding more pressure to sweat the assets in the infrastructure and data center area.
There is continuing focus on end user computing too, with businesses concentrating on delivering mobility, productivity and innovation. Technology and user expectations are evolving faster than industry standards and what IT has traditionally been able to provide. By embracing mobility and investing in matching requirements to defined user roles, organizations are taking a strategic approach to improve the business, while keeping cost and risk under control.
Another focus for Australian businesses is service delivery to improve the performance of IT operations for digital business. What is relatively new is the drive to embrace new concepts and methods to increase the velocity of change – including bimodal IT and DevOps - separating traditional risk adverse IT from the more agile IT that is needed. There is also expanding demand for improved automation to scale business systems.
Australian organizations are also focusing on modernizing data center strategy and architecture to move towards more fluid infrastructure. They are looking at moving the focus from workload to workflow and on ‘what’ rather than ‘where’ it operates – whether on-premise in a data center, co-location, in the cloud or with an outsourcer. The ability to adjust across all of these areas is a more dynamic approach than traditional data center design.
2. Is there anything uniquely different from other mature countries?
What we are seeing is that Australian organizations have a more strategic approach to cloud infrastructure than counterparts globally, largely because they started a bit later and in a more controlled fashion - they didn’t just fall into it without coordination. Australians organizations really only kicked off with cloud infrastructure-as-a-service (IaaS) in 2013.
With cloud a higher priority in Australia, multi-sourcing is shaping as one of the big questions for how businesses manage multiple cloud providers with traditional environments and across a range of infrastructure technologies. This is where cost optimization and IT financial management is coming back to the fore. With the temperature off the boil for mining and a slowing economy, there’s a greater focus on spending less and driving more value.
3. What impact is digital business having on data centers in Australia?
Digital business is forcing a split between traditional and more agile IT, which Gartner calls bimodal IT. There is a trend towards technology departments adopting two distinct approaches to meet enterprise demand — one focused on being agile and flexible, the other centered on the longer-term, efficiency, security, predictability and a step-by-step approach. While this is a movement towards two different IT departments in effect, it is a good thing as that challenge has been too great to deal with in the past. The only way you can deal with it is by splitting it and taking a bimodal approach.
In addition to the considerable opportunities it brings, another impact the digital world is having is the creation of new, different and higher levels of risk, according to 93 percent of Australian and New Zealand CIOs that took part in our 2015 CIO survey. Disturbingly, 66 percent said that the discipline of risk management is not keeping up.
4. What’s in store for public cloud IaaS in 2015?
Spending on public cloud IaaS is expected to reach US$36.6 billion globally by the end of 2018, according to Gartner’s latest forecast, and we’ll see spending on it grow more than five times faster than overall IT spending. Gartner research shows that agility is the main reason organizations are investing in cloud to respond to changing business needs. It rates above a raft of other reasons such as scalability, cost reduction and innovation.
Despite the market growth, public cloud IaaS in Australia is dominated by only a few key global providers - most notably Amazon Web Services, but increasingly also Microsoft Azure and Google Compute Engine. Between them, these three providers comprise the majority of workloads running in public cloud IaaS in 2015. Faced with fierce competition from these players, we can expect many of the other public cloud IaaS providers to adjust their business and technology plans, either to bolster areas of strength or stem losses, which will inevitably lead to further concentration of workloads.
Mr. Warrilow and other Gartner analysts will discuss the latest data center trends in more detail at the upcoming Gartner Infrastructure, Operations and Data Center Summit in Sydney – 18-19 May 2015.