Exclusive: Elastic warns Australia is falling behind in Gen AI adoption

Australia is lagging in the adoption of generative AI, according to Gavin Jones, Country Manager for Elastic in Australia and New Zealand.

Jones believes it's a shortfall that could have "severe implications" for its competitive edge in the global market.

Speaking to TechDay, Jones emphasised the transformative potential of generative AI while expressing concern over Australia’s relatively slow uptake compared to its regional and global counterparts.

He highlighted the pressing need for Australian businesses to accelerate their adoption of generative AI technologies. "Generative AI is not just a trend; it’s a fundamental shift in how businesses operate and compete," he said.

Elastic, known as the search AI company, powers numerous daily digital experiences, from booking accommodation to managing finances.

The company's technology has been downloaded over 4.6 billion times, and it now supports 50% of the Fortune 500 companies. Despite this global reach, Jones noted that Australian organisations are notably behind in adopting these technologies.

"Only 42% of Australian organisations have adopted generative AI, compared to 63% in Singapore and 81% in India," Jones explained. "This lag places Australia at a significant competitive disadvantage in a world that's increasingly AI-driven."

Jones highlighted a recent report commissioned by Elastic that revealed the disparity between the intentions and actions of Australian businesses. While 87% of organisations plan to increase investment in AI this year, only 21% are currently trialling it for internal use. This gap, according to Jones, underscores the challenges that need to be addressed to accelerate adoption.

"There are key barriers like hallucinations, biases, security, privacy, and regulatory concerns, as well as a shortage of skilled professionals," he said.

"But despite these challenges, the transformative potential of AI is widely recognised."

The Australian government's Tech Council has set ambitious targets, aiming to increase the AI workforce by 500% by 2030 to meet the demand for 200,000 professionals. This, Jones noted, could contribute over $115 billion to the Australian economy. "These are staggering figures," he said, adding that the areas of greatest impact are customer experience, operational efficiency, and cyber resilience.

Jones stressed the importance of leveraging AI-driven security to detect and investigate threats faster, ensuring businesses can respond before these threats cause significant damage. "It's essential to recognise that AI is only as effective as the data it’s trained on and the business context it’s given," he explained.

Elastic, Jones said, offers businesses the opportunity to securely access their private data while utilising multiple generative AI applications. This approach, he argued, is crucial for Australia's fastest adopters, who will shape the future of this transformative technology. "The seamless communication between data and generative AI will be key," he said.

In discussing Elastic’s broader strategy, Jones emphasised the company’s focus on search AI as the core of its value proposition. "We see ourselves as the search AI company," he said. "We help everyone find the answers they want from massive amounts of data, at scale, in real-time."

Elastic’s platform is built on an open-source core and provides three core capabilities: search, observability, and security. These capabilities are crucial for managing the uptime, availability, and performance of applications, as well as ensuring robust security measures.

"Observability isn't just about the way applications are performing," Jones explained. "It's also about identifying internal security vulnerabilities and responding to them swiftly."

Jones noted that Elastic’s platform offers a unified solution, enabling businesses to go from incident to insight within milliseconds. This, he said, is a significant differentiator from legacy competitors. "We're open-sourced at our core, and we've been leveraging machine learning and AI for over 10 years," he added.

The adoption of generative AI in business contexts, Jones suggested, is not just about embedding the technology into existing applications but integrating it into the data fabric of the organisation. "The challenge is how you blend confidential data with the multitude of large language models (LLMs) and copilots in the generative AI ecosystem," he said.

Elastic, according to Jones, differentiates itself by providing a bridge between confidential data and the various generative AI solutions available. This approach allows businesses to get unbiased insights and use the most appropriate tools for their specific needs.

When asked about the future of data analytics and business intelligence, Jones acknowledged that customers have been instrumental in driving Elastic's product development. "We built out our security and observability platforms in response to customer needs," he said.

"The value is really in the platform, and we're constantly evolving based on how customers are using our technology."

Jones also highlighted the importance of partnerships in Elastic’s growth strategy. The company collaborates with major hyperscalers like Microsoft, Google, and AWS, offering its solutions on all major marketplaces. "Our partnerships are critical, but we also give customers the ability to run on-premises, which is particularly important for highly sensitive security or sovereignty-related use cases," he explained.

As Elastic continues to expand its capabilities, Jones expressed optimism about the future of generative AI in Australia. "We're excited to be part of this transformation," he said. "The potential of how we could be leveraged is endless; it's only as broad as the imagination of our customers."

"We’re at a point where customers are coming to us with pilots they want to run. That’s an exciting transition, and we’re looking forward to enabling more of these innovative use cases in the future."