2014 in review Part II: New Zealand Cloud adoption at a tipping point

nzcloud 1We were once the bleeding edge test bed of technology. The halcyon days of Telecom in the late 80’s seeing a slew of innovative, leading (bleeding) edge services. These days we are a little more mature, a little older and grayer, and a little more confused about things (speaking for myself at least). We’ve started to wholesale adopt Cloud though and we’re running into a raft of issues as a result along with the benefits.

A year ago I was seeing a huge amount of research and watching going on in the market. Some companies had made the leap to Cloud, and it was a leap, while most were casting their skeptical eye at it and playing penguin. Penguins all shuffle on mass to the edge of the iceberg waiting until the first poor fool falls in. They then watch with great interest to see if said fallen in penguin gets eaten. If not, then it is declared safe for fishing.

This year sees some interesting developments. Cloud is being taken up by shadow ICT faster than the CIO can keep up with it, DIA is assisting government to make good decisions, the brave pioneers are generally being rewarded, global Cloud companies are now onshore or deeply embedded, the security risk is being seen for what it is, and home grown Cloud is really starting to hit it’s stride as a good alternative to the mega corps.

Everywhere I look Cloud is now adopted by organisations, companies, and government agencies. The horse started bolting two years ago, but has now reached a stampede. New Zealand CIO’s are in the same place as their overseas counterparts. Those that haven’t moved to a pragmatic adoption of Cloud services are finding themselves divorced from the business.

In private companies the pragmatism is far more advanced. Companies are shrugging their shoulders, seeing the value in Cloud, and getting on with it. SMB’s are rubbing their hands together because the cost, flexibility, and mobility that Cloud brings them is allowing them to compete with the older, slower, harder to turn businesses.

Government as a rule is struggling with Cloud. There has been a good move to DIA’s Utility Computing this year and continued migration from risky datacentres into government approved ones. But, the sector is still confused about what Cloud is, how they can utilise it, how they navigate the varying different central government edicts, in a climate that is politically difficult and about as easy to navigate as the great barrier reef at 3am in the morning in a storm.

Still. Some government agencies have made the leap, and again, Software as a Service (SaaS) is very popular, with more agencies looking at Platform as a Service (PaaS). Many agencies are now utilising a mix of DIA services, local services, and international services with the most mature having figure out that there is no one solution for Cloud, that it is a hybrid situation, and moving workloads into various providers depending on their various strengths.

Which is as it should be. Because that’s what the rest of the world is doing, and it works. I hear the argument often that DIA services are too costly, however having spent a lot of time this year working on various pricing models I have found the following to be more accurate; DIA services are more costly for certain workloads and they are on par or cheaper than public Cloud for others. Yep. You have to price by workload, you can’t price the entire infrastructure stack with all it’s components, it won’t fly.

It’s been great to see DIA reinvigorate themselves. Yes yes, there is still some frustration in certain areas as you all keep telling me, but some parts are starting to hum along and the hiring of actual service based professionals is restoring some confidence. The force feeding mandated “do as you are told” edict is dropping and the “we are here to help” attitude is coming through. Did I tell you how much I loved their Cloud Assurance process? Did I? Oh yes, I did. Point being, they are starting to change, albeit slowly still.

Global Cloud companies have started to extend into New Zealand with Dimension Data landing in the North Island and aside from IBM (as far as I know) they are now the second global Cloud provider to have physical presence. Other major Cloud providers are continuing to land in Australia with their footprint growing, putting them well within acceptable latency for New Zealand and continuing to drive a very competitive pricing war.

The security red flag wavers aren’t being paid much attention too and I have found no one who has moved their workloads off U.S. soil to Europe because of NSA fears. Where necessary, large private (financial services) companies are utilising encryption, tokenisation, and if you believe it to be true, homomorphic encryption tools. All of which effectively provide an “NSA proof” system. In addition, a lot of people are moving to Cloud because of the security it provides, which is well and above what most organisations can afford themselves.

Mark my words, Security as a Service has quite fired yet, but when it does, their will be a glut of security professionals looking for new careers.

New Zealand Cloud providers are seeing steady growth and in this market, the fact they are still in business tells you everything you need to know about their pricing, service, and latency. I.e. It’s all good. Revera (Spark), Datacom, Catalyst, The Cloud, and The Kloud are all ticking along happily with each servicing core Cloud needs and extending their revenue by owning certain verticals in the market or providing niche services.

Smaller App Dev and other companies are seeing products born in the Cloud and retired from the Cloud, making them highly competitive not only on a local, but international scale. Our ICT exports have increased substantially as the year goes by and it seems that we are more of a hot seller overseas than at home, with large government in particular, still holding onto it’s parochial stance of buying from global ICT companies.

I have found only one entity in New Zealand that refuses to have a bar of Cloud. I would happily bet money that they have an epic Shadow ICT issue and you have to wonder what they will do when the servers stop being made and the providers enforce service via Cloud. The point being is that with one exception everyone I talk to is using Cloud now in some way.

That trend is set to continue, and I’ll look next at what we can expect next year in terms of Cloud as it matures further and continues to disrupt organisations, in a painful, but positive way.


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