Australian Cloud hub gaining momentum

Innovation minister, Kim Carr, touts benefit of Cloud to Australian ICT industry

The case for Australia becoming a Cloud computing hub has received greater support via endorsement from federal innovation minister, Kim Carr.

Commenting following the release of the Cloud Computing – Opportunities and Challenges report (PDF), drafted by the IT Industry Innovation Council, Carr said Australia has the opportunity to develop a strong local capability in Cloud computing.

“We are a safe, secure destination for hosting Cloud data applications, and offer political stability, and a stable and transparent regulatory environment,” Carr said in a statement.

Carr’s comment echoes the sentiments of the report, which argues that Cloud has the potential to benefit a wide section of the local ICT industry given that it touches software, services, hardware, networking, carriage and research.

“We can conclude from the various expert insights that the local Australian Cloud market growth opportunities are real and provide a clearly addressable potential for local ICT providers,” the report reads.

“Furthermore, we believe that there is an additional local industry development growth potential inherent in the proposition that Australia could be considered as a regional hub for the hosted provision and development of Cloud computing services,” the report reads.

However, Carr, and the report, point to issues such as risk management, sovereignty, data security, privacy and service quality which need to be addressed before Australia could become a Cloud hub to the world.

Further, more needs to be done to fuel the level of local demand for Cloud computing services and minimise current barriers to take‐up.

“There needs to be a strong pull from the non‐ICT sector in terms of understanding the fundamental business benefits of Cloud adoption, including operational efficiencies, greater reach into markets, cost reduction, reduced risk of IT investment with pay‐as‐you‐go pricing, and greater flexibility to handle changes in business conditions,” the report reads.

The report also argues that elements of the ICT industry which focus on developing software solutions and software services will need to rapidly transition their go‐to‐market models to take advantage of Cloud‐based infrastructure and to offer Cloud-based models of their software.

“This may open up new markets for them and provide a springboard for growth, but given the increasing global competition dynamics in a Cloud world it is likely that the most innovative and nimble companies will prosper,” the report reads.

Citing IDC figures, the report notes that Cloud-related ICT spending will grow to 7.1 per cent of total ICT spending in Australia in 2015, up from 2.8 per cent in 2011 and equating to an increase in value of around $4.3 billion.

The report follows the November release of the [artnid: 406234|Potential for Cloud computing services in Australia report|new]], written by Lateral Economics and sponsored by Macquarie Telecom, which argues that Australia must move to greater industry self-regulation if the nascent local industry is to capture Cloud’s significant opportunity.

“In the case of Cloud computing, industry self-regulation may be a necessary part of the overall regulatory solution,” the report reads. “A legislative approach to regulation may simply be too slow and unable to continuously adapt to the rapid technological change that characterises the industry.”

Follow Tim Lohman on Twitter: @Tlohman

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