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27 July 2021: During Google Cloud Platform’s (GCP) analyst update, the vendor unveiled details regarding its Australian expansion with a new Melbourne data centre and new management for the ANZ region. 

Why it’s Important

The new data centre is more an indication of overall Cloud growth in Australia, as IBRS has reported in the past. It is less a turning point in Google’s strategy, and more of a necessary response to market trends. It should be noted that a large set of GCP services will be available from the Melbourne zone, but not all. Others will be added ‘based on market demands’. This is a strategy that has been adopted by all three hyper-scale Cloud vendors, and is a clear indication of how Cloud usage is expanding in Australia: from core infrastructure services (especially storage, compute, containers and analytics) to more nuanced services, such as AI.

During the briefing, Google highlighted its private ANZ wide data network as a key differentiating factor. There is merit to this claim, as network infrastructure in Australia remains a thorny issue for Cloud clients outside the major States, such as Perth and Darwin, Adelaide, etc.

More telling was what was not elaborated upon during the briefing. In the past, Google has focused on its capabilities in AI as a key differentiator in the market. While Google clearly has strong credentials in AI, the reality is that most Australian organisations are not investing in AI directly, but rather obtaining it as part of other solutions. 

For example, AI is found in capabilities of CRM products Salesforce (Einstein) and Zoho (Zia), in low-code products from Appian and Microsoft’s Power Platform and so on.  

Instead, Google championed its partner program and its support credentials. Google knows channel partners are essential to competing against AWS and Microsoft. It also recognises that skills are in short supply, so is investing in training and support programs. 

In reality, Google’s strongest competitive weapon is an age-old one: value for money. When evaluating like-for-like core compute and storage services, GCP is more economical than its two top rivals.

Who’s impacted

  • CIO
  • Cloud infrastructure teams

What’s Next?

Most organisations will end up with a multi-Cloud environment, though with a preference for a ‘primary’ platform. Many Cloud migration strategies IBRS reviews are scoped in such a way to limit the choice of deployment to Azure and/or AWS. Given the strengths of these two Clouds, this makes sense. Oracle’s Cloud platform is also appealing to Oracle customers looking for an ‘easy’ migration of their core services. 

Far fewer Australian organisations are formally considering GCP as a viable alternative for running core workloads, or even leveraging it for failover/parallel workloads. This is a lost opportunity. While IBRS is not recommending GCP, it considers that the vendor is under-represented in shortlists and as a result, opportunities for Cloud cost optimisation and contestability in multi-Cloud environments suffer. 

Related IBRS Advisory

  1. IBRSiQ: Google Cloud - Are Their AI Offerings a Point of Difference From Other Vendors?
  2. Vendor Lock-in Using Cloud: Golden Handcuffs or Ball and Chain?
  3. Options for Machine Learning-as-a-Service: The Big Four AIs Battle it Out
  4. How to get on top of Cloud billing
  5. Why Cloud Certified People Are in Hot Demand
  6. VENDORiQ: Data Replication Goes Serverless with Google Datastream

The Latest

2 July 2021: Amazon released a video summary and report on its sustainability targets and performance. The key take outs are that Amazon is the largest corporate purchaser of renewable energy, with a shift of 42% from non-renewable within one year. The underlying message here is sustainability is no longer a political issue for the corporate sector, but a fiscal imperative.  

Why it’s Important

As outlined in previous IBRS research, all of the hyperscale cloud vendors - Google, AWS, Microsoft, Oracle and Alibaba - have well-documented strategies to reduce their reliance on carbon-based fuel sources. All position sustainability as a competitive advantage, not just against each other, but against on-premises data centres. 

It is likely that cloud vendors will be positioning their sustainability credentials in both business and general news channels, looking to position their brand as a leader on climate action. From a cynical view, this messaging will play well with the existing news cycle of the impact of climate change, from the disastrous bushfires to killer heatwaves in North America, to unseasonable storms and record-setting weather events. From a more optimistic perspective, these vendors will drive genuine solutions to reduce the carbon footprint associated with providing computing service.

Therefore, as cloud vendors set or meet zero carbon energy targets, the issue of sustainable ICT is set to re-emerge as a priority for CIOs and data centre architects.  

IBRS and BIAP (via the IT Leaders Summits) have tracked CIOs interest in the topic of green IT. An IBRS study in 2008 had sustainable ICT being rated as ‘very important’ for 25% of CIOs and ‘somewhat important’ for 59% of CIOs. Since then, interest in sustainable computing has plummeted year-on-year. The IBRS / BIAP data for 2016 had 6% of CIOs rating sustainable ICT as a priority. By 2020, less than 0.5% of CIOs rated sustainable ICT as a priority.

IBRS expects this trend to reverse sharply in 2024-2025 as the leading cloud vendors continue to demonstrate both environmental and financial benefits associated with renewable energy.

Who’s impacted

  • CIO
  • CFO
  • Data centre leads
  • Infrastructure architects

What’s Next?

By 2025 the leading cloud vendors will leverage their position in renewable energy consumption as a selling point for policy-makers to mandate cloud computing and place unattainable goals for architects of on-premises data centres.

Rather than waiting, CIOs should review previous strategies for sustainable ICT, with the expectation that these will need to be updated and reinstated within the next 3-5 years.

Related IBRS Advisory

  1. The Status of Green IT in Australian and New Zealand (2008)
  2. Building your Green IT strategy
  3. Think green IT: Think saving money
  4. Forget Green; think sustainable computing in 2009

Too often, information communications technology (ICT) and business analytics groups focus on business intelligence and analytics architectures and do not explore the organisational behaviours that are required to take full advantage of such solutions. There is a growing recognition that data literacy (a subset of digital workforce maturity) is just as important, if not more important, than the solutions being deployed. This is especially true for organisations embracing self-service analytics.

The trend is to give self-service analytics platforms to management that are making critical business decisions. However, this trend also requires managers to be trained in not just the tools and platforms, but in understanding how to ask meaningful questions, select appropriate data (avoiding bias and cherry-picking), and how to apply the principles of scientific thinking to analysis.

Log in and click the PDF above to download the IBRS presentation kit to kickstart your journey. 

Conclusion:

The choices when selecting and designing an Enterprise Resource Planning (ERP) solution are immense and typically require industry specific considerations. Executives rightly desire fully-integrated IT services across all departments within an organisation. The end result is a reliable, fully-integrated, and secure solution whether it is deployed in a public or hybrid Cloud solution.

What should not be up for negotiation are the essential, human-facing critical controls (CCs) that maintain the effectiveness and security of this critical asset during business operations. In all, IBRS sees organisations needing to address 10 human-facing CCs from a group of 20 CCs. The remaining 10 CCs will cover the technical controls later in this research series.

IBRSiQ is a database of Client inquiries and is designed to get you talking to our advisors about these topics in the context of your organisation in order to provide tailored advice for your needs.

Contract management can be more than just record keeping. When done well, it can enable organisations to explore the best ways to optimise their investments when conditions change.

This capability proved essential for the Australian government when COVID-19 hit, with investments in all manner of services and infrastructure being needed almost overnight.

IBRS interviews ZEN Enterprise, an Australian niche contract management solution vendor, and the contract manager from a large Australian agency to tease out the benefits and challenges of advanced contract management in an age of rapid change.