​Is Australia losing its Cloud edge?

Is Australia becoming less prepared to develop and make use of global Cloud services?

Australia has lost its edge as a low risk location for datacentres, with tax rates and labour efficiency to blame as the local market's position as a leading Cloud services industry comes under threat.

In sliding down the datacentre risk parameter in the Cloud Readiness Index (CRI) 2016 report, Australia now places behind Hong Kong, Singapore and New Zealand as the region’s most attractive cloud computing market, yet still leads the US, UK and Germany in terms of cloud implementation and growth strategies.

The fourth iteration of the ACCA's CRI shows that while economic stability, world-leading freedom of information and cybersecurity continue to make Australia an efficient and low-risk market for data centres and cloud services, the market has struggled to keep pace with its peers in Asia Pacific.

Broadband quality is below the average for the region, and the business environment and changes to data retention laws and data localisation requirements contribute to a more risky outlook for Australian Cloud services.

The CRI measures 14 economies across Asia Pacific on ten parameters to indicate how prepared they are in adopting Cloud computing, with Hong Kong claiming four spots to topple two-time leading country Japan, which drops four places to behind Australia in #5.

"Cloud has mainstreamed as a technology," says Lim May-Ann, Executive Director of the ACCA. "Public sector adoption of cloud is underway, and we see that multiple gCloud accreditation schemes is the next challenge which businesses will face with governments."

"The next phase for markets is to put in place strong forward-looking policies which enable international data transfers, and address cybersecurity and privacy concerns from consumers and business."

Cloud mainstreamed; attention on driving innovation and science

In dropping one place into fourth for CRI 2016, having climbed from seventh place in 2012 into third place in 2014, overall there are no big changes to Australia’s cloud readiness from CRI 2014 to CRI 2016.

“Economic stability and reliable physical infrastructure continue to make Australia a low-risk and efficient country to run data centres,” May-Ann says.

“Only Hong Kong, Singapore and New Zealand have better international connectivity.

“Soft infrastructure is also robust; privacy controls are world class, behind only Philippines, and IP protections are seen as reliable among business leaders.”

May-Ann says high corporate tax rates, labour costs, and less environmentally sustainable energy supply than its peers, means Australia has been overtaken by Hong Kong, Singapore, Taiwan and New Zealand in terms of data centre risk.

Australia’s government regulatory environment and use has also dropped three places into sixth, behind Singapore and New Zealand - who have been at the forefront since 2014 - as well as fast-improving South Korea, Japan, and Malaysia.

At a local level, of particular concern are new data retention laws and changes in the regulation of data localisation and website blocking.

“These may have the effect of forcing growth in local data centres while on the other hand making Australia less prepared to develop and make use of global cloud services,” May-Ann adds.

“The Malcolm Turnbull administration, having prior experience with digital convergence issues through Turnbull’s previous appointment as Communications Minister, has made positive changes through a more holistic government focus on technology and innovation, specifically with the new National Science and Innovation Agenda policy launched in December 2015.”

The effects of the new government and policy changes have yet to manifest themselves however, and not have been captured by the CRI 2016.

Recent Government Legislation and gCloud/gICT Developments include the National Innovation and Science Agenda, Mandatory Data Retention Law, Internet Blocking Legislation as well as a new whole-of-government cloud services panel, allowing government agencies to procure cloud services on the new services panel, bypassing the complications of a full market approach.

“In the same way that access to the Internet moved from initially being a novelty to an essential service today, cloud computing is on its way to firmly ensconcing itself as a mainstream technology,” May-Ann adds.

“Governments around the world have taken note of this change, and have put in place various government cloud initiatives to ensure their public sector does not lag behind this change.”

Cloud uptake

Despite the report, the uptake of cloud computing within Australian organisations continues to grow strongly with Infrastructure-as-a-Service (IaaS) attracting the highest spending increase in 2015.

More than half of all organisations greater than 20 employees are now using public cloud IaaS for at least some part of their IT infrastructure, according to research from Telsyte.

The Telsyte Australian Infrastructure & Cloud Computing Market Study 2015 forecasts the total market value for public cloud infrastructure services to reach $775 million by 2019, up from $366 million in 2015.

Telsyte’s research also identified a growing trend in the hybrid cloud model which will be in use by some 40 percent of enterprises by 2019.

A hybrid cloud architecture involves some level of integration between private and public infrastructure and allows organisations more flexibility over where workloads are hosted.

Telsyte Senior Analyst Rodney Gedda says with cloud services presenting a low barrier to entry for IT infrastructure the organisation penetration is growing strongly but this will result in a large gap in how on-demand and on-premises services are managed.

“Both the uptake and spending value of cloud is increasing as more testing and production workloads, including virtual machine backups and disaster recovery, are being deployed off-premises,” he adds.

“The hybrid cloud architecture, and dealing with multiple cloud service providers, both present opportunities for more automation and process improvement.”

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags CloudData Centre

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.
James Henderson
Show Comments


James Cook University - Master of Data Science Online Course

Learn more >


Victorinox Werks Professional Executive 17 Laptop Case

Learn more >



Back To Business Guide

Click for more ›

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?