Australian enterprises prefer Australian cloud

Beverley Head
Monday, 07 December 2009 07:26

IT Industry - Market

Enterprise appetite for cloud based computing services is significant and growing – but some opportunities are going begging because too many cloud computing services are either based overseas or have only immature offerings, leaving Australian cloud adoption lagging the US by as much as 18 months.

A survey conducted by professional services firm KPMG found that there are already Australian enterprises pursuing a “zero software strategy” and some organisations now rent up to 90 per cent of their software needs. But author Dr Bruce McCabe believes even more companies would make the move to the cloud if locally based cloud services were available, or if the local offerings were more robust and mature.

“One of the big findings was that larger Australian companies have a very strong desire for companies to provide hosting within their national boundaries,” said McCabe who is director of technology innovation in KPMG’s IT Advisory group.

“One reason that we are behind is that there is a lot of perceived risk in offshoring the procession of software and IT services – a lot of new dependencies.”

When the subject of data sovereignty is raised with cloud computing vendors who operate their data centres overseas – and mainly in the US - most claim that few Australian customers are overly concerned at where their data is stored. McCabe however says the issue is not a furphy – and while Australian businesses may be happy to use long established US based services such as those offered by Salesforce.com, there are real concerns with some of the newer, less well established overseas clouds.

McCabe said that while this was less of a concern for smaller companies which were prepared to move to cloud based computing and “crash through”, enterprise class customers which had to navigate a series of regulatory hurdles including privacy issues, in order to be able to use offshore hosted computing clouds were less enthusiastic about sending data overseas. Many were also uncomfortable at having their data housed in US centres where their information could theoretically be scrutinised under the US Patriot Act.

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