Australia’s Poor Performance in Cloud Computing

MIT in partnership with Infosys Cobalt has published the Global Cloud System Index 2022 (Global Cloud Index). He first points out that the strength of cloud computing is at the heart of a country’s future economic success:

“A decade ago, cloud computing was a booming phenomenon, driving cost savings, flexibility and innovation. Today, the cloud is computing, a fundamental resource for businesses and governments as they strive to exploit emerging technologies such as 5G, artificial intelligence and the Internet of Things.

Singapore tops the list, followed by ‘usual suspects’ such as Finland, Sweden, Denmark, Germany and Iceland.

Australia ranks 12th overall, ahead of New Zealand (14th), Japan (15th) and the United States (17th).

However, behind Australia’s overall ranking (which itself isn’t that stellar) are its much lower rankings in key areas, such as broadband speed, price and human talent.

How the index was compiled

The Global Cloud Index evaluated the performance of 76 countries on 4 “pillars”:

  • Infrastructure: how well each country is served by telecommunications networks and computing resources that enable cloud-centric production models, including the number of data centers, secure servers, and unique Internet Protocol addresses in each country in relation to its population. This pillar accounts for 15% of each country’s overall score.
  • Ecosystem adoption: the extent to which businesses and citizens in each country are accessing the results of cloud applications and services in the public and private sectors. This includes measures of digital service adoption, public sector online service participation, SaaS revenue growth, innovation, and the price of broadband services relative to gross domestic product. At 35%, this pillar contributes the most to the index score.
  • Security and assurance: the maturity of regulatory environments that promote progressive security and data sovereignty environments to the cloud, and that enable trust in digital assets. This pillar has a weighting of 25% of the Index score.
  • Talent and human affinity: each country’s human capital assets that can contribute to a cloud-based digital economy, including human capital productivity, depth of engineering and mathematical skills, and overall knowledge of Internet in society. This pillar represents 25% of a country’s overall index score.

The Global Cloud Index is a “survey of surveys” in that it aggregates a series of separate surveys, such as those of the UN and the World Bank. It has all the flaws of those underlying studies (as well as the inherent challenges of global comparisons), but it still provides useful insights into areas where Australia might need to up its game.

What makes a high-performance cloud economy successful?

The Global Cloud Index drew two important conclusions about the drivers of a country’s success in cloud computing readiness.

First, the same set of countries tended to rank high in each of the 4 pillars, showing a “virtuous circle” effect across the pillars. For example, half of the top 10 countries in the talent pillar are also in the top ranks of the infrastructure and ecosystem adoption pillars, suggesting that cloud talent availability and capabilities are strongly correlated with digital infrastructure density and market service adoption. .

This is exemplified by the comments of Tracey Arnish, Vice President of Human Resources for Platform Engineering and Technical Infrastructure at Google Cloud: “We select our locations in cloud regions based on customer demand. to make services easier and faster for businesses, and we also invest in these locations to ensure we have the right talent to serve our customers.

There are a few notable exceptions. Japan, which ranks only 17th overall, outperforms cloud adoption at 6th place. This discrepancy is largely linked to the huge success of Japan’s e-commerce market, estimated at $217 billion in 2021, which is the third largest in the world, and more than half of its households shop regularly online.

Conversely, Germany is ranked 6th overall, but only 24th in cloud adoption – for reasons that are almost the opposite of Japan. The German e-commerce market is relatively smaller than other comparable markets, and cloud computing policy has mainly focused on deeper transformation of its manufacturing and logistics sectors as it is building its fourth industrial revolution infrastructure and capabilities.

Second, success relies on a close level of cooperation between the private and public sectors on cloud computing:

“The 2022 Global Cloud Ecosystem Index leaders combine digital infrastructure with leadership in governance. Top scores show significant efforts to spread digital infrastructure and have digitally-minded governments using the cloud to deliver public services and protect personal data and digital transactions.Singapore stood out, “thanks to a relentless ‘cloud-first’ strategy”.

As we will see below, Australia’s record is marked by the variability of its performance across pillars.

Pillar 1: infrastructure

The Global Cloud Index clearly shows that top-ranked countries rely on “hearty and reliable broadband”. The index notes that improving national infrastructure is also driving decentralization decisions for global hyperscalers:

“There has been a significant shift in data center construction globally over the past quarter century. As a result, data center builders and large-scale cloud providers have shifted to hub-and-spoke distribution models, with remote computing resources connected to an increasing number of smaller edge computing facilities. The hub-and-spoke model also dovetails nicely with the growing need for nations to reduce energy-intensive infrastructure to meet growing carbon reduction targets.

While Australia’s overall infrastructure ranking is 12th, our internet speed ranking is much lower, which some might find surprising given the massive investment in NBN:

“5G will play an important role in the distribution of computing and storage resources. Indeed, cloud policymakers hope, 5G networks will increasingly support multiple access edge computing (MEC) applications, automated systems, and managed Internet of Things (IoT) networks. ) and digital devices, which will enable businesses and consumers to more efficiently and productively access cloud computing resources.’

The index points to South Korea as an example of how cloud computing can be driven by 5G. Australia is a world leader in rolling out 5G networks and while our speeds may lag behind South Korea, we are ahead of countries like Singapore.

Pillar 2: ecosystem adoption

The Global Cloud Index considers that companies doing well today are able to do so because the increasing flexibility of cloud computing allows them to choose the right technologies to achieve their business results. This has two “profound” implications for the future state of the ecosystem:

  • the coordinated establishment of computing resource platforms will significantly reduce “digital waste”: a collection of inefficient legacy infrastructure and an accumulation of unstructured data, most of which is collected through duplicated or siled data collection processes .
  • As the adoption of open, API-based architectures grows, organizations will be able to share data, information, and computing resources with their partners in a more efficient and reciprocal manner. APIs will become “mainstream” and some governments are promoting national API programs, such as the Australian Government’s API Design Standard.

Again, Australia’s performance on this pillar is marked by its variability:

Pillar 3: Security

The Global Cloud Index notes that a primary goal of most governments as they strive to grow their cloud-centric digital economies is to build and promote a “trust infrastructure”: public policy and conventions regulatory and social measures that ensure the digital channels used by consumers and businesses in the economy are efficient, effective and safe.

Australia gets a star turn here:

‘[An industry expert comments] that rapid policy implementation must be complemented by a similar speed to review and revise cloud policies as circumstances change. She cites Australia, which had a revolutionary cloud-focused policy that was revised every three or four years to incorporate new security policies. This included a cloud accreditation program designed to “create an ecosystem where suppliers who serve government were trusted”, but it was soon discovered that Australian small and medium-sized businesses were excluded from government procurement processes, because they struggled with the cost and complexity of the accreditation process. The Australian government responded quickly, reworking its program into a simpler and more inclusive online marketplace.

But our results are relatively worse in terms of data protection, privacy and freedom of the press:

Pillar 4: Talents

This is where, prices and broadband speeds aside, Australia has the worst performance. On the general index of human capital – essentially the level of skills and education of our people – Australia comes out on top. But that doesn’t translate into technology-specific skills.

Market trends

The Global Cloud Index ends with some interesting comments on market trends.

First, this well-known IT risk of “cost overruns” also hinders enterprise cloud computing investments:

“More and more cloud-dependent businesses are struggling to control their spending: In its 2021 State of the Cloud report, Flexera noted survey results revealing that their average respondents were 24% over budget. in public cloud spending and predicted that cloud investment next year would increase 39%.’

Second, industry consolidation appears to be underway. Global cloud infrastructure spending in the fourth quarter of 2021 grew 34% year-on-year to $53.5 billion, and nearly two-thirds of that spending was captured by the world’s top three hyperscale providers.

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