They redefined the way the world works during the pandemic, but investment in business collaboration tools is “done now”, an analyst has noted, as cloud operators build new Australian sites to cater for companies moving critical functions to the cloud.
Although the pressures of the COVID pandemic pushed many companies to focus on customers by speeding up their digital transformation – bold operators like Judo even implemented major banking systems in the cloud – most left core business systems untouched.
Instead, they focused on reinventing customer-facing systems like online shopping sites by linking together cloud-based services that provide capabilities like payment processing, identity verification, loyalty programs, shipping, and more.
Many businesses only survived the pandemic because they could quickly transform their operations in this way – and as they pivot away from the pandemic, says IDC Asia Pacific vice president for cloud services and partner and alliances programs Chris Morris, they’re hungrier for the cloud than ever.
“Expansion of cloud models has been slowly evolving over the last five years, but really got a lot of traction in the last two years,” he told a recent Amazon Web Services (AWS) webinar in which he noted that collaborative applications “have dropped down in importance” as an investment priority.
Such tools were “a simple horizontal business solution to support the new operating model that we had to have in the workforce at that time,” he explained, “but they’re done now, and we’re moving up the ladder now into something that really generates value.”
Fully 40 per cent of publicly listed Australia and New Zealand organisations will overhaul the way they choose cloud services this year, IDC recently predicted, focusing on business outcomes rather than technical requirements as they tap the cloud for edge computing – in which data collection and analysis, machine learning, data security and other services run on high-speed cloud platforms.
The closer the applications are to the end user, the faster they can run – but with the average application linking a half-dozen different cloud services today, and this expected to pass 30 by 2025, bottlenecks in any of these links compromise performance.
“Speed and access to data are the critical thing,” Morris said, “and having compute capability and data accessible to users in different areas, just as they would if they were sitting at the core [headquarters office] – is a really, really big step forward in the way businesses can operate.”
“It provides more access to alternative computing technologies for specific workloads, which can now be much closer to users – and enable a whole community of different users to grow” as startups find new ways to innovate in the cloud.
A decade ago, cloud services like AWS, Microsoft Azure, and Google Cloud ran applications on servers that were predominantly located in the United States.
As usage increased, new sites distributed the workload – speeding up performance by, for example, allowing Australian users to run applications on servers in Sydney so data doesn’t have to continuously traverse the Pacific Ocean.
With increasing adoption by big businesses and government customers, Australia has warmed to this multicloud architecture so quickly that a recent Nutanix analysis found Australian companies were leading the world in adopting new architectures.
In response, AWS has invested heavily to build a Melbourne cloud region, will spend $7b ($NZ7.5b) to build local infrastructure in New Zealand, and this month announced over 30 new local zones worldwide in cities including Perth and Brisbane.
AWS local zones “are really meant for ultra low-latency deployments” where the many components of cloud services communicate with each other instantaneously, explained AWS APAC and Japan chief technologist Olivier Klein, who said decisions about where to build new cloud zones were made based on customer feedback and use cases.
“Maybe they want to have more local data processing requirements, or maybe they want to have actual locations to give a better experience to their end users,” he said. “We watch where the demand is, and continuously iterate to give a better [cloud] experience.”