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SYDNEY, Australia, April 17, 2016

Australian and New Zealand Businesses Too Enthusiastic About Cloud

Ahead of the Gartner IT Infrastructure, Operations and Data Center Summit in Sydney in May, we asked research director and conference chair Michael Warrilow about the latest trends and developments in IT infrastructure and what Australian and New Zealand organizations are focusing on this year.

1.    What are the major infrastructure and data centre trends in Australia and New Zealand in 2016?

Cloud is a hot topic, but many local organizations are getting a little too enthusiastic about it. Some are making dangerous assumptions that it will always save them money, which it’s not necessarily going to do. What they will get is more agility and a different mix of capex and opex, which the business likes. I have this conversation every week with companies in Australia and New Zealand now.

Another notable trend is the continuing movement away from owning a data centre, which is really pronounced here compared with other markets like Europe and the U.S. Concerns about supply and capacity have diminished, with cloud being seen as almost limitless and many commercial providers in the local market. Businesses don’t want to have all their capital tied up in data centre facilities, when they can be spending it in other areas. Instead, they’re using an increasing mix of co-location, hosting and cloud.

Legacy modernization is still an important issue. In Gartner’s 2016 CIO survey, Australian and New Zealand CIOs placed it as an equal priority to infrastructure and data centre. There’s still mainframe systems out there for really big workloads, particularly in government and banks. These businesses want to know how they can keep it in the fold and relevant, so modernization is important. There are few alternatives at this point - it’s a captive market with organizations still spending serious money on it.

2.    What are the top impacts of digital business on infrastructure and operations?

Digital business has created the need for organizations to go faster, which provides an inherent conflict – the faster the business goes, the more risk it introduces. They also won’t risk maintaining high availability, which compels them to go slower. It’s a vicious circle. 

Bimodal IT is so important here. It’s where two separate modes of IT delivery are managed – one focused on stability and the other on agility. In Gartner’s 2016 CIO survey, Australian and New Zealand CIOs are moving faster than global peers into a bimodal working model, with 72 percent either already doing it or planning to within three years. So the positive news is that local organizations are getting their bimodal strategies together, but some assumptions around cost remain an issue.

3.    What’s in store for virtualization in 2016?

Gartner is seeing a decline in new virtualization licenses in Australia for the first time since it became mainstream well over a decade ago, although overall revenue is still growing dur to maintenance. Australia has always been a leader in virtualization, but growth has now reached its peak. Smaller and medium sized business have already started using it less and will continue to reduce their usage. 

One of the main reasons for this is that they are not getting the return they need. There’s a minimum investment in skills that is needed for virtualization and when you can get more of a turnkey solution from hyperconverged integrated systems (which scale out, not up, for a more modular and agile approach to deployments) or cloud, these technologies start becoming more attractive.

The challenge for organizations then becomes choosing the right platforms given all of the changes. For the server environment, what was just a few storage and server vendors is now an increasing mix of storage hardware and software, plus a new breed of hyperconverged players.

4.    What’s the future of private cloud in Australia and New Zealand?

Only a few short years ago, internal private cloud infrastructure would seem the likely evolution of server virtualization in the data centre. However, successful adoption is being restricted by complexity, enterprise immaturity and the effort required, such that providers must plan carefully or risk overinvestment.

In fact, we are now at a point that Gartner survey data shows a decline in enterprises expecting internal private cloud to be their primary cloud deployment model. In contrast, hosted private cloud is expected to almost double as the primary model. Then there’s hybrid cloud, which also appears set for growth.

Mr. Warrilow and other Gartner analysts will explore the latest infrastructure and data centre trends in more detail at the upcoming Gartner IT Infrastructure, Operations & Data Centre Summit in Sydney – 16-17 May 2016.

The topic will also be discussed at the Gartner Infrastructure, Operations & Data Center Summits in Mumbai, India, Mexico City,London and Las Vegas. Follow news and updates from all of these events on Twitter using #GartnerDC.

About Gartner

Gartner, Inc. (NYSE: IT), is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow.

Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and objective resource for more than 15,000 organizations in more than 100 countries — across all major functions, in every industry and enterprise size.

To learn more about how we help decision makers fuel the future of business, visit gartner.com.

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