‘Haywire’ Australian IT Skills Market Prompts Logicalis to Add Talent as a Service

Hexbyte Glen Cove

Image: kerkezz/Adobe Stock

The IT skills shortage is no secret to Australia’s technology managers. Whether they’ve been hiring new talent into their teams or looking to keep their existing talent engaged and in place, the short supply of skills in recent years has made it quite a challenging time.

Scott Brown, who heads the new Talent Services offering at IT solutions and managed services provider Logicalis Australia, said it has been a unique period to be watching IT recruitment.

“I’ve never seen anything like the last two to three years. It’s been haywire,” Brown said.

The skills shortage is causing IT leaders to spend more on talent, with skill sets like cyber security and AI in demand in 2023. Logicalis has also launched a Talent Services business to help IT leaders meet skills needs and get projects done without hiring staff directly.

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CIOs are spending more on IT talent attraction and retention

Australian organisations continue to face a hyper competitive market for local IT talent.

While tech sector employees did suffer through a round of layoffs in early 2023, led by U.S.-headquartered companies brutally shedding their local workforces, demand from local employers, the skills shortage and fast-paced change have seen these staff absorbed back into the workforce.

“We’ve run into a perfect storm of a low unemployment rate and immigration still recovering from pre-pandemic levels,” Brown said. “Many organisations are finding that getting their hands on the right employees and capabilities at the right time is a core challenge they are facing.”

IMAGE: Scott Brown, head of employee experience at Logicalis Australia

Logicalis’ Australia CIO Report 2023, for example, found that talent was one of the top three areas where CIOs were planning to increase spending this year. Just over three quarters (77%) of CIOs surveyed said they were planning to boost spending on hiring and retaining talent.

SEE: Many organisations are worried about employee retention.

“Organisations can either develop people and capabilities at the right speed, or if I can’t, they can go out and buy or borrow that talent for the right situation,” Brown said. “And if you look at the core technologies, the pace of change is about as fast as any other industry out there.

“CIOs are increasing spending to attract and retain talent and bridge the skills gap. At the same time, they are asking if they have the capacity to do what they want to do.”

Cyber security, artificial intelligence leading IT skills demand

Logicalis Australia sponsors Grad Girls, a career support program for female STEM students run by the Victorian Information Communication Technology for Women Network. At an event in 2023, it was clear where graduates saw the opportunities of the future.

“Ninety per cent of attendees were doing either AI, cyber security or data science,” Brown said. “That’s an indication for us of where the market is going. These are technologies where the market has not kept up with demand and is expected to grow exponentially.”

Cyber security and data science roles feature heavily on in-demand tech job lists for 2023. So do IT project managers, software developers, business analysts and network engineers. A Randstad Australia survey found cyber security roles were the most in-demand skill set and highest-growing job by headcount. The highest specific skills areas in demand were DevOps and continuous integration and deployment skills, cloud, development languages, cyber security skills and test automation.

Figure A

Australia’s most in-demand IT skills according to Randstad. Image: TechRepublic

But the big growth area for this year is AI. A survey conducted by Robert Half found that generative AI was having a huge impact on hiring plans, with 30% of employers surveyed having shifted their focus to different IT skills that are more in demand due to AI advancements. The survey found 34% had hired contractors or consultants to bring in specialised skills, 33% had increased hiring to keep up with innovation and 23% had outsourced certain projects.

Randstad’s survey also found AI, automation and robotics skills were in the shortest supply in the market, while expecting the second largest growth in headcount (behind cyber security).

Robert Half’s senior managing director for APAC, David Jones, said generative AI may change how work is done, but that does not mean it will eliminate jobs in the process.

“It is in the environment of automation by and with AI that new job profiles are emerging that need people more than ever,” said Jones. “While there is a growing demand for workers who hold these skills, employers know it’s an emerging field and are willing to facilitate the upskilling of staff.”

Logicalis meets market demand with Talent Services launch

Logicalis Australia launched its Talent Services business to help customers get their hands on the IT skills and capabilities they need at the right time to be able to get IT projects done.

A fully managed solution, it offers remote, hybrid or on-site tech professionals while taking care of payroll, onboarding, performance management and renewal or disengagement.

Despite the market-wide talent shortage, Logicalis Australia says its access to a wide talent network means it can provide a shortlist of candidates within 48 hours of receiving a brief.

“Going out and hiring full-time is the traditional model, but that’s evolving,” said Brown. “We find there are core roles, and our service sits around that team, offering agility, capacity and capability.

“It reflects the needs in the market. They may not have the opex budget to hire five roles and deal with that commitment. This can be a low-risk option for organisations.”

The biggest change in the market now is the speed at which enterprise IT teams are moving.

“People are asking, ‘Can we do this now?’” Brown said. “They have projects banking up. As one thing rolls over, it banks up the next project. If they can bring someone in for three months, we find they are not having to delay those projects.”

Brown adds that because players in the tech sector are not sure what the future holds for the economy, augmenting teams in this way could increase flexibility during uncertainty.

IT leaders should expect skills shortages in the future

Logicalis Australia is not expecting a significant shift in the skills available in the market over the next 24 months. Brown says there’s “not enough talent in those emerging tech areas.”

He says the skills gap is even driving different types of candidates to seize opportunities.

“People are seeing opportunities because of where things are going in the market, and it is clearly going to take a long time to catch up to the trend of supply and demand,” Brown said.

Brown adds that current economic pressures will push organisations to evolve faster and pursue further automation, driving even further demand for technology skills to support change.

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Australia Is Adapting Fast to a Generative AI World

Hexbyte Glen Cove

Generative AI has been the talk of the business and technology world since the explosion of ChatGPT onto the market in late 2022. In Australia, there’s been a frantic whole-of-nation effort to understand the implications for business, government, workforces and communities.

IT professionals are at the centre of the storm. We find Australia balancing a combined potential AU $115 billion (US $74 billion) opportunity with significant risks, including data privacy and security. IT leaders are advised to educate stakeholders and be guided by business goals as they create processes for exploring and realising AI use cases.

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What are the potential benefits of AI for the Australian economy?

The Australian economy is well positioned to gain from generative AI technology. The Tech Council of Australia has predicted generative AI could deliver between AU $45 billion (US $28.9 billion) and AU $115 billion (US $74 billion) in value to the Australian economy by 2030.

In its Australia’s Generative AI Opportunity report in collaboration with Microsoft, it predicted:

  • Up to AU $80 billion (US $51.5 billion) in value could come from increased productivity as workers use AI for some existing tasks to complete more work in less time.
  • Additional value would come from the increased quality of work outputs as well as from creating new jobs and businesses — such as software exports — across the economy.

Healthcare, manufacturing, retail and financial services have been nominated as industries that could significantly benefit. Australia’s large existing tech talent pool, relatively high levels of cloud adoption and investments in digital infrastructure are expected to support AI’s growth (Figure A).

Figure A

The Australian economy could benefit from generative AI. Image: Tech Council of Australia

What risks does generative AI bring for the Australian economy?

One of generative AI’s better-understood risks is workforce disruption, as it may require large numbers of employees to either learn new skills or retrain. In Generation AI: Ready or not, here we come! Deloitte claimed 26% of jobs already faced “significant and imminent” disruption:

  • Administration and operations roles have been identified as most vulnerable to the new technology, while sales, IT, human resources and talent roles will be impacted in select industries.
  • The industries facing higher levels of disruption in the shorter term include financial services, information and communication technologies and media, professional services, education and wholesale trade.

Putting existential risks aside, Australian Government research also named a number of “contextual and social risks” and “systemic social and economic risks,” ranging from the use of AI in high stakes contexts like health to the erosion of public discourse or more inequality.

What are the risks and challenges facing Australian business AI users?

Australian business and IT leaders, as well as employees, agree the deployment of generative AI tools comes with significant risks. According to Deloitte’s survey, three quarters of respondents (75%) were concerned about leaks of personal, confidential or sensitive information, and a similar number (73%) were concerned about factual errors or hallucinations (Figure B). Other concerns included regulatory uncertainty, copyright infringement and racial or gender bias.

Figure B

Businesses and employees are concerned about some AI risks. Image: Deloitte

The consensus seems to be that business approaches to the use of generative AI have been lagging behind adoption, leaving a “gap” that is introducing risks and that could hold businesses back from capitalising on opportunities. For example, Deloitte’s report found 70% of employers had yet to take action to prepare themselves and their employees for generative AI, while GetApp’s survey found only about half (52%) of employers had policies in place to govern their use.

Senior IT leaders have their own technical and ethical concerns with generative AI. A Salesforce survey of IT leaders found 79% had concerns about the creation of security risks and 73% with bias. Other concerns raised included:

  • Generative AI would not integrate into the current tech stack (60%).
  • Employees did not have the skills to leverage it successfully (66%).
  • IT leaders had no unified data strategy (59%).
  • Generative AI would increase the company’s carbon footprint (71%).

Australian businesses are already embracing generative AI in some form

Despite some of the concerns surrounding generative AI, businesses of all sizes have been enthusiastic experimenters with generative AI tools.

A recent Datacom survey of 318 business leaders in Australian companies with 200 or more employees found 72% of businesses are already utilising AI in some form. The survey also found the vast majority expected AI to bring significant changes to their organisation, with 86% of leaders believing AI integration will impact operations and workplace structures.

However, the formal adoption of generative AI has been more tentative in some larger businesses, as they experiment with the potential while weighing up or guarding against the risks. Of the businesses with over 200 employees Deloitte surveyed for Generation AI: Ready or not, here we come! only 9.5% had officially adopted AI in their businesses.

SEE: Boost your AI knowledge with our artificial intelligence cheat sheet.

Whether or not it is official, businesses are using AI organically through their employees. One survey found that two-thirds (67%) of Australian employees frequently use generative AI tools at work at least a few times a week. Another survey from software firm Salesforce found that 90% of employees were using AI tools, including 68% who were using generative AI tools.

Generative AI is expected to become a standard resource for businesses the more it is embedded into the products they use. In the marketing domain, for example, design software firm Adobe recently made its productised generative AI tool, Firefly, generally available, while competitor Canva has introduced image and text generation as well as translation within its products (Figure C).

Figure C

Users of Adobe will benefit from the new generative AI tool Firefly. Image: Adobe

What are Australian businesses using generative AI for?

There have been an abundance of use cases identified for generative AI. Global research from McKinsey early this year explored 63 use cases across 16 business functions where the application of the tools can produce one or more measurable outcomes. However, much of the initial interest in generative AI in larger organisations is focused on the areas of marketing and sales, product and service development, service operations and software engineering.

In marketing and sales, top use cases include generating the first drafts of documents or presentations, personalising marketing and summarising documents. In product development, generative AI is used in identifying trends in customer needs, drafting technical documents and even generating new product designs. The potential to utilise it in customer service for chatbots is a popular use case, while its ability to write code is being explored in software development.

One of Australia’s largest banks, Commonwealth Bank, is a pioneering big business user of new generative AI technologies. In May, it was reported that the bank was already using it in call centres to answer complex questions by finding answers from 4,500 documents’ worth of bank policies in real time. Generative AI was also helping the bank’s 7,000 software engineers write code, improve its apps and create more tailored offerings for its customers.

Generative AI guidance has been provided to public sector agencies in Australia

Public sector agencies have been provided with high-level guidance. Prepared by the Digital Transformation Agency and the Department of Industry, Science and Resources, it suggests agencies only deploy AI responsibly in low-risk situations while keeping in mind known problems like inaccuracy, the nature and potential bias of training data, data privacy and security, and the importance of transparency and explainability in decision making.

Practically, the guidance suggested implementing an enrolment mechanism to register and approve staff user accounts to access AI — with appropriate approval processes through CISOs and CIOs — as well as establishing avenues for staff to report exceptions. It warned agencies off high-risk use cases, like coding outputs being used in government systems. It also suggested agencies move to commercial arrangements for AI solutions as soon as possible.

Australian Government is taking steps to ensure ethical use of generative AI

The Australian Government commissioned the production of a Generative AI Rapid Research Information Report in early 2023 to assess the opportunities and risks of generative AI models. This was followed by the release of a public discussion paper, Safe and Responsible AI In Australia, which invited submissions and feedback from businesses and the community.

The Government also committed AU $41.2 million (US $26.53 million) to support the responsible deployment of AI in the national economy as part of its 2023-24 Federal Budget. This included funding for the National Artificial Intelligence Centre to support the Responsible AI Network, a significant collaboration aimed at uplifting the practice of responsible AI across the commercial sector.

Aside from urgent recent action to ban AI-generated child abuse material in search engine results, the government has been working with stakeholders, including tech firms, to evaluate how to approach any AI regulation. Australia’s set of existing laws is expected to cover many possible AI scenarios, though gaps may exist that new regulation will need to fill.

What should IT leaders do to capitalise on generative AI?

Analysis from Gartner suggests the ongoing shift to digital in Australia will drive increasing investment in generative AI technologies in 2024, with a particular focus on tools for software development and code generation. However, Gartner also notes that generative AI and foundation models have reached the Peak of Inflated Expectations in Gartner’s 2023 Hype Cycle, which foreshadows a potential Trough of Disillusionment coming in the future.

At Gartner’s recent Symposium/Xpo on Australia’s Gold Coast, Distinguished VP Analyst Arun Chandrasekaran told IT leaders they were likely to encounter “…a host of trust, risk, security, privacy and ethical questions” with generative AI, and they would need to “…balance business value with risks.”

Chandrasekaran said leaders should consider creating a position paper outlining the benefits, risks, opportunities and deployment roadmap, as well as ensure strategy and use cases align with business goals, with clear assigned ownership and business metrics for measurement.

Chandrasekaran suggested IT create “tiger teams” that could work with business units on ideation, prototyping and demonstration of the value of generative AI. These teams could also be tasked with monitoring industry developments and sharing valuable lessons learned from pilots across the company.

However, Chandrasekaran warned IT would also need to foster responsible AI practices throughout to promote the ethical and safe use of generative AI. Employees should be prepared for this period of upheaval through skills retraining, career mapping and emotional support resources.

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Australia’s Financial Technology Startups Are Changing How Banks and Financial Institutions Procure New Tech

Hexbyte Glen Cove

The fintech sector has been a leading source of tech startup success in the Australian market. The sector is also a clear example of how technology buyers are changing the way they interact with startups. While local fintechs originally emerged in competition to banks and financial institutions, enterprise IT leaders are now often working with fintechs to deploy products and services more quickly and cheaply, says FinTech Australia General Manager Rehan D’Almeida.

Image: Rehan D’Almeida, General Manager, FinTech Australia

“I think banks in the last few years have changed their tone and are seeing much more opportunities to collaborate with fintechs,” D’Almeida told TechRepublic. “They are open to participation and seeing opportunities with fintechs, whether that’s investing in them, integrating them with their own systems, doing a full buy-out or other types of opportunities.”

An explosion in fintech-generated innovation over the last decade — combined with the possibilities created by cloud computing and software as a service — is helping to shift the mindset of tech teams at larger institutions. This is resulting in enterprise technology buyers using more fintech products and services together with in-house technologies to win over the end consumer.

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Fintech startups in Australia change from banking competitors to collaborators

Venture capital investment in local Australian fintechs experienced a significant decline in 2022 to AU $1.26 billion (US $810 million), mirroring a correction seen in the U.S. and Europe. However, the sector still attracted higher investment than any other startup sector — just ahead of enterprise and business software startups in Cut Through Venture’s The State of Australian Startup Funding report (Figure A).

Figure A

Fintechs still gained the most venture capital investment in 2022. Image: Cut Through Venture

The recent turbulence also didn’t stop FinTech Australia, the sector’s peak industry body, from holding its annual Intersekt conference in 2023. Covering a range of pressing industry issues, from utilizing consumer data in an open banking era, to the future of payments and the potential of AI, it drew over 1,100 attendees — and not just from the thriving startup ecosystem.

“There’s a much more diverse and broader audience now,” D’Almeida said. “We’re not just seeing fintechs attend, but more banks and financial institutions are also now participating.”

This represents a shift in the market. The early years of the fintech ecosystem were all about disruption. Instead of working together with large banks and financial institutions, ambitious startup tech players were instead seeking openings where they could use rapid changes in technology to disrupt the existing dominance of slower to move incumbents such as banks.

“They wanted to reach consumers directly. As the industry evolved, the opportunities have changed,” D’Almeida said. “Some fintechs have pivoted, some have seen more opportunities to partner rather than go direct, and are now reaching customers through the banks and larger institutions.”

Onboarding and fraud prevention platform FrankieOne is one example. Launched in 2017 with the aim of becoming the “next great neobank,” the team’s encounter with disjointed bank customer onboarding processes led to a business pivot. Now, it helps banks including Westpac, fintechs and regulated entities deliver better customer onboarding processes and experiences, including monitoring identity and fraud.

SEE: Here are the 5 top fintech trends you can expect to see in 2023.

“There has been an evolutionary change,” D’Almeida says. “There are several fintechs working with banks now. There is a sense fintechs no longer see banks as their biggest competition; they see them as potential customers and partners, and other fintechs as the competition.”

The growth of cloud computing and SaaS is changing what is possible for Australia’s fintechs

AWS Head of Strategy for Financial Services in Australia and New Zealand David Fodor has seen this evolution in how banks work with fintechs firsthand.

Formerly general manager of enterprise systems, services and operations at major bank National Australia Bank, he told the audience at FinTech Australia’s Intersekt23 conference that ” … in my experience working in that [bank] paradigm, we were of the buying posture where we would traditionally go with one of the big tech providers and ask them to provide an end-to-end solution.”

He said a lot had changed since then in what amounted to a “new world” for tech buyers.

“There has been a rapid evolution of much better microservices architecture, a much better ecosystem of APIs,” said Fodor. “Those two coming together on top of platforms like ours that provide a marketplace of many different SaaS vendors means that you can stitch together what we describe as a SaaS mesh extremely quickly and extremely efficiently.”

Fast access to SaaS technology can help banks stay agile

AWS is seeing bigger financial services players progressively move in that direction.

“We still work with a lot of organizations that have that build-orientated, proprietary solution type of mindset going in,” Fodor said. “Having said that, across a lot of Tier 2 and Tier 3 players in the market, and into the fintech ecosystem, it’s all about partnership. It’s about how to bring together best-of-breed solutions across the value chain, and we are enabling that to happen.”

Manu Iyer, director of BFSI and fintech at tech consultancy Thoughtworks, described one case study where a large financial services organization had wanted to create a personal lending product for the electric vehicle market.

Fodor said what would have taken three years and cost $45 million was pulled together in eight weeks, by bringing together AWS, real-time payment platform Zepto, consumer data firm Adatree and SaaS cloud banking platform Mambu. He added that the most important thing AWS does is help organizations be more agile.

“The most important thing is helping them access new technologies like artificial intelligence,” Fodor said. “That’s where it’s all happening — without a platform that allows you to access a marketplace of lots and lots of services, lots of third-party services, lots of partnerships, it’s hard to find a pathway to adoption of new technology as it comes on to the market.”

Australia’s fintechs are challenging how financial institutions procure new technology

Fintechs are challenging financial institutions to change the way they source and use tech. Mambu Global Solution Engineering Lead Perminder Grewal said the SaaS cloud banking provider’s experience with the procurement processes of larger institutions is that they often have an existing definition and criteria around what “core banking” is. She said this might not reflect what the institution requires to deliver better in today’s fast-changing market.

A traditional request for proposal process can also struggle to keep up with consumer change, the availability of ecosystem providers, or market developments and regulation, similar to the Consumer Data Right regime, under which consumers can now share data with providers they choose.

“We need to work with the business and tech areas of the banks to challenge what they are trying to do and get down to the nuts and bolts of what they need versus what they could have from a core: We work with a lot of banks to really understand what is their MVP,” Grewal said. “The time to revenue, to getting to that MVP is critical. Because you can analyze things to the nth degree and not have done anything two or three years later, or you can deliver something in nine months and iterate on that to get to the full functionality you need.”

Jill Berry, CEO and co-founder of Adatree, which has done a number of bank deals, said she appreciated when bank buyers know ” … what they want to own and what they don’t want to own.”

“When you talk to a tech team, a tech team often wants to build, Berry said. “They are like, ‘why can’t I build this?’ And you say, ‘Well you can, you can build anything, but it will probably just cost you a lot more money, time and effort. And it’s a question of opportunity cost.”

Fintechs are proving they can be strategic partners for the future

Key accreditations or deal history are helping fintechs be seen as the serious potential partners they are. For example, Zepto’s status as the first non-ADI, accredited CDR data recipient approved to connect directly to the New Payments Platform as a Connected Institution, has carried weight for enterprise customers looking for trusted SaaS providers. In 2023, Zepto also struck a deal with Wpay, the paytech development arm of retailer Woolworths Group, to deliver one of the first retail use cases for payments initiation services PayTo.

Fintechs are increasingly seeing their offerings resonate in financial services. Zepto CTO Rich Miller said the trend

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Cloud Strategies Are Facing a New Era of Strain in Australia, New Zealand

Hexbyte Glen Cove

Enterprises across Australia and New Zealand have been enthusiastic adopters of the cloud.

A 2023 IDC whitepaper sponsored by Microsoft said Australia and New Zealand are among the few countries in the Asia Pacific region where public cloud adoption has moved beyond discrete software-as-a-service-based solutions for the replacement of infrastructure, like disaster recovery, to advanced use cases driving digital transformation and innovation.

But this is not coming without strain. Forrester’s State of Cloud in Australia and New Zealand 2023 report found continued growth in cloud utilization across organizations is driving Australian and New Zealand IT leaders to focus on efficiency and cost. IT leaders should expect further challenges as demands grow for new use cases like artificial intelligence in the future.

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Explosion in cloud demand putting pressure on cloud strategies

Senior Australian enterprise cloud decision-makers have reported their organizations spending an average of nearly US $14 million (AU $21.85 million) on public cloud in the past 12 months. Forrester said this scale, combined with the pressure of a technology sector and an economic slowdown, has revived interest in ballooning cloud waste and efficiency.

SEE: Compare public versus private versus hybrid cloud infrastructure.

“As companies look to address economic uncertainty, optimization is top of mind,” the Forrester report said. “We’ve reached new levels of spend that have far surpassed expectations.”

Some IT leaders are renegotiating cloud contracts with higher amounts of committed spend or larger committed growth rates in exchange for discounts. Many are also using cloud cost management and optimization solutions to reduce waste, while work with database and network architects could further optimize performance, security and cost concerns, Forrester said.

Organizations are even expanding the adoption of financial operations practices. Rather than just using new tools, Forrester suggests that IT teams are making an effort to build in collaboration, hold users accountable for spending decisions and provide more transparency on spending initiatives.

“This initiative is gaining traction among tech executives, not just cloud leaders,” said Forrester. “While the tech downturn isn’t hitting local firms as much as onshore multinationals, Australian firms still want the most out of FinOps — even as layoffs by big tech firms cool the labor market.”

The strain on cloud strategies is expected to continue, Forrester said.

“In the coming years, many enterprises will start to explore new cloud use cases, whether that involves the edge or AI-enabled services,” said Forrester. “Each fresh opportunity will put a new strain on current strategies.”

Australia and New Zealand proving they are cloud-forward

IDC’s report predicted Australian spending on public cloud would increase by 83% between 2022 and 2026, from AU $12.2 billion (US $7.81 billion) in 2022 to AU $22.4 billion (US $14.34 billion). Gartner, meanwhile, predicted Australian organizations would shell out AU $19.9 billion (US $12.74 billion) on public cloud just this year and expected NZ $3 billion (US $1.77 billion) in spending from New Zealand organizations, up 22.9% year-on-year.

The spending predictions reflect the new scale of Australia and New Zealand’s cloud growth.

Ever since the arrival of the major public clouds, Forrester’s research shows local enterprises have been increasingly migrating their existing workloads rather than just using the cloud for new apps. On average, Australian enterprise cloud decision-makers in organizations migrating to a cloud computing infrastructure as part of public cloud adoption anticipate having migrated 46% of their workloads within two years, which would be an increase from 36% today.

SEE: Explore the advantages of cloud computing.

Retailer Woolworths, for example, completed its migration of 20 SAP applications, 75 terabytes of data, 135 database servers and 435 application servers to Azure in 2022, which included one of the biggest SAP environments in the region. Meanwhile, ANZ Bank is in the midst of an enterprise-wide migration to AWS and Google Cloud Platform.

ANZ Bank is far from alone in its pursuit of a multi-cloud strategy. Forrester’s Infrastructure Cloud Survey, conducted in 2022, found a huge slice (95%) of Australian enterprise cloud decision-makers at organizations using the public cloud who say they use multiple public cloud vendors, demonstrating that multicloud is the predominant strategy for most organizations.

The shift is not limited to the private sector. Though slower to move, Australian public sector agencies have also been encouraged to embrace cloud-first or cloud inclusive approaches over a number of years, including in the Federal Government’s 2017 Secure Cloud Strategy, which was updated again in 2021. Reasons given include increasing speed, enabling continuous improvement, providing easier access to public services and reducing maintenance costs.

While Australia may not have become the second-largest cloud hub in the world as Forrester forecast in 2014, the future looks bright.

“The cultural and business factors that drove that prediction, including the country’s fast-follower mentality, a vibrant startup scene, tech-forward citizens and cultural ties to U.K. and U.S. business communities, continue to drive investment,” Forrester said.

Data center expansions will support public cloud growth

Australia and New Zealand’s cloud uptake will be accelerated by new hyperscaler data center investments across Australasia. AWS has committed a further AU $13.2 billion (US $8.44 billion) to Australia’s East Coast regions from 2023 to 2027, as well as NZ $7.5 billion (US $4.43 billion) to establish a data center in Auckland, consisting of three availability zones. Both Microsoft and Google have also announced plans for New Zealand regions.

The arrival of hyperscaler data centers in New Zealand, in addition to the existing presence of New Zealand’s Catalyst Cloud, is expected to propel strong growth in the market.

SEE: Here’s what you need to know to choose the right cloud approach for your business.

“Growth in cloud adoption continues globally, but it is in 2024 that we’ll see it explode in New Zealand,” said Gartner Research Vice President Michael Warrilow earlier this year. “The arrival of the hyperscale cloud vendors into the local market will drive this accelerated growth.”

For Forrester, changing data center footprints is only another reason organizations will be optimizing their strategies.

“ANZ firms need to strategically evolve their cloud strategies based on their own business context, including prior investments, new pre

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