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Cloud not living up to expectations in New Zealand

By Shannon Williams
Fri 15 Nov 2019
FYI, this story is more than a year old

More than half of cloud migrations in New Zealand have failed to meet expectations, according to a new survey from Unisys, who says organisations have no made cloud part of their core strategy. 

The Unisys Cloud Success Barometer found 58% of New Zealand organisations have failed to realise notable benefits from cloud computing, largely because they have not integrated their migration plan into their broader business transformation strategy.
 
The study explored the impact and importance of cloud by surveying 1,000 senior IT and business leaders in 13 countries around the world, including 88 in New Zealand. 

The survey says New Zealand organisations for which cloud is a core part of their business strategy are twice as likely (55%) to say organisational effectiveness had changed for the better, compared to only 25% of those who said cloud was a minor part of their strategy.

Of the 13 countries surveyed, New Zealand organisations are the least likely to report that organisational effectiveness improved for the better due to cloud computing, while New Zealand organisations report the highest use of legacy systems, estimating 20% of their IT environment resides on legacy systems or mainframes; and almost a third (31%) is in on-premise data centers; and the lowest use of private cloud, estimating 27% of their environment resides in private cloud.

According to the data, more than half of New Zealand organisations (55%) agree that data is more secure in the cloud than in-house; and security is cited as both the top benefit and greatest challenge for moving data, applications or processes to the cloud.

“These results show why cloud transformation is not just an IT issue, it’s a business issue,” says Leon Sayers, regional consulting lead, Unisys Asia Pacific.

“New Zealand organisations recorded the second-lowest level of success for cloud implementations meeting expectations. However, Kiwi organisations that integrated cloud as part of their business strategy saw the greatest positive gains to help boost revenue, gain competitive advantage, improve productivity and manage costs,” he says. 

“Rather than a ‘lift and shift’ approach, successful cloud implementations require the right framework in place at the outset, with continual innovation and updates over time.”
 
The Future is Multi-Cloud – and New Zealand is Poised to Lead the Way
Of the 13 countries surveyed, New Zealand reports the highest use of legacy systems and mainframes, and the fourth-lowest use of public cloud, the report shows. Even so, nearly all New Zealand respondents (94%) say they have migrated to the cloud to some degree. And New Zealand leads in adoption of multi-cloud, used by 61% of Kiwi respondents, compared to just 28% globally.
 
Kiwi organisations using multi-cloud are more likely to see the cloud as being essential to staying competitive and attracting the best people:
    •    Nine in ten New Zealand multi–cloud users say that if they didn’t move to the cloud, they would be somewhat to extremely concerned about employees being frustrated by old technology (92%) and being able to attract and retain top talent (91%) – compared to 46% and 51% of all New Zealand organisations surveyed.
    •    91% of multi-cloud users are concerned about a competitor innovating first and 89% are concerned about being outperformed by a competitor, if they did not move to the cloud - compared to 52% and 53% of all New Zealand organisations surveyed.
 
“A Multi-cloud strategy offers flexibility and choice, and recognises that not all data and applications need to be treated in the same way,” explains Sayers.

“In New Zealand there are no local instances of the major public cloud providers and security is a significant concern – particularly for government. A multi-cloud strategy helps organisations gain greater sovereignty over their data, spread their risk in case of downtime and increase the negotiating leverage to shop rates for different service needs from multiple vendors,” he says.
 
2019 Unisys Cloud Success Barometer: Cloud Has Not Met Expectations in New Zealand
The first Unisys Cloud Success Barometer surveyed more than 1,000 senior business and IT leaders across 13 countries in August and September 2019. Unisys gauged their attitudes on a wide range of cloud performance issues and created a barometer based on their feedback. The barometer score is calculated on a scale from zero to 100, based on how well cloud expectations are being met in six areas across business, competitive and IT benefits.
 
The Unisys Cloud Success Barometer score for New Zealand is 40, the second lowest of the 13 countries surveyed, and well below the global average of 49.

The top drivers for New Zealand organisations moving to the cloud are the desire for better IT and data security (53%), improved customer experience (45%), being agile (35%) and higher productivity (35%). Expectations for their cloud implementations were exceeded for improving the supply chain (76%), faster time to market (71%) and better customer experience (69%).
 
However, the benefits delivered fell short in the areas of reducing costs (54% said expectations were somewhat met/below expectation), driving innovation (46%), being agile (43%) and competitive advantage (40%).
 
Navigating the Path to Success
The survey identified several factors that improved the likelihood of a successful migration. New Zealand organisations that used third-party support to help with their cloud adoption were approximately 50% more likely to realise organisational improvements for the better compared to organisations that handled cloud migration in-house.
 
“While no cloud migration is the same, there are several core building blocks that many successful migrations share. First, organisations must do a thorough planning assessment that looks at anticipated ROI, staff training needs, security risks and identifies where outside expertise is needed,” says Sayers. 

“Next, they need to establish a continuous integration/continuous delivery framework leveraging microservices, containers and DevOps. Lastly, having a cloud management portal is critical to providing end-to-end visibility for better monitoring and performance.”

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