Data sovereignty and security driving hybrid IT adoption in Australia

Data sovereignty, cost and security considerations are steering Australian IT decision-makers towards hybrid IT environments that span public cloud and private cloud datacentres, a survey has found.

According to Nutanix’s fifth global Enterprise cloud index survey, data sovereignty was the top driver of infrastructure decisions in Australia, with 15% of local respondents citing that as the most important criteria when considering infrastructure investments.

Data sovereignty was also one of the top three considerations for over a third (37%) of enterprises in Australia.

“Control and security are the biggest factors Australian organisations are weighing up when transforming their IT infrastructure,” said Jim Steed, managing director of Nutanix Australia and New Zealand.

“While public cloud was seen as a panacea for many years, it’s becoming increasingly clear that cloud is a tool – not a destination. Some workloads and applications are perfectly suited to a public cloud, but Australian organisations are moving their most sensitive and business-critical workloads back home to their on-premises infrastructure.”

According to the study, over half of Australian organisations are planning to repatriate some applications from the public cloud to on-premise datacentres in the next 12 months due to data sovereignty concerns. This was higher than the global figure of 46%.

Cost also weighed on the minds of 8% of Australian respondents when making infrastructure decisions, compared with 5% globally. “Cloud bill shock is real. Hyperscale public cloud providers make it very easy to move apps and data into their environments, but extremely costly to take them out,” Steed said.

Shoring up security postures and meeting regulatory requirements were the top reasons for moving applications across IT environments this year for over half (53%) of Australian respondents, a 15-point increase from last year’s survey.

While operating hybrid cloud and distributed IT environments is inherently complex, the model is here to stay. According to the survey, Australian respondents expect to increase their use of hybrid multicloud infrastructure more than fivefold, from only 8% penetration today to 43% by 2026.

“While public cloud was seen as a panacea for many years, it’s becoming increasingly clear that cloud is a tool – not a destination”

A separate study commissioned by Microsoft also found that two-thirds of Australian organisations were running cloud workloads in production in 2022, with public cloud spending in Australia expected to grow by 83% between 2022 and 2026.

But to realise the benefits of hybrid multicloud, organisations will have to overcome challenges with data analytics and orchestration, as cited by 44% of Australian respondents, along with disaster recovery (43%).

Australian respondents noted that having tools to provision, move, manage, monitor and secure applications and data from a single console would help to overcome such challenges and improve the efficiency of hybrid IT environments.

Meanwhile, they are also concerned about the growing IT skills gap. Recruiting and retaining skilled IT and cloud talent in the next 12 months is a concern for nearly nine in 10 Australian respondents.

The top areas where organisations expect to need additional talent are IT professionals with expertise in storage, compute and networking, cloud engineers and architects, as well as artificial intelligence and machine learning developers.

Jonathan Taylor, managing director for cloud, infrastructure and engineering at Accenture Australia, said that while cloud engineering and cloud architecture talent continues to be difficult to acquire and retain, the fact that companies are now innovating with cloud technologies – not just around customer experience, but also in core business processes – requires a broader set of skills.

“It’s not just about tech and transformation – it’s also about understanding how to innovate and be really close to the business problem,” Taylor said. “It’s an interesting conundrum that’s increasing the skills shortage in some ways, because now we need a broader set of skills.”