Australia lacks cloud computing industry: Analyst

By on
Australia lacks cloud computing industry: Analyst

Study fails to find local providers.

A study by IT services analyst group Longhaus has failed to locate a single service provider in Australia whose offering meets the true definition of a cloud computing service.

Whilst many Australian service providers claim to offer some kind of service in the cloud, Longhaus research director Sam Higgins told iTnews that not a single data centre operator in the country offers a service that fits the technical criteria for cloud computing.

"When you scratch beyond their use of the word 'cloud', you find they are offering nothing more than the provision of virtual servers," he said. "They are not offering truly elastic computing power."

Under the virtual server provisioning model, the customer is allocated a pre-defined server image from the service provider, plus access to a control panel or interface for the managing of what the customer chooses to do with the virtual server. This, says Higgins, is not cloud computing.

"This is an image controlled by a service provider," he said. "The customer might be offered four or five options around what that image is, but you are still being charged for idle time.

"Just because something is virtual, it doesn't instantly make it a cloud computing offering."

Under a more strict definition of cloud computing , the service needs to be dynamic, he said.

"You as a customer define the web server image, you set the memory and processing needs as you see fit, you set up the load balancing, and you are charged for what you use rather than for the mere existence of the server," he said.

Higgins said there are plenty of "platform as a service" or "software as a service" options, which are sometimes mistakenly lumped under the umbrella term of 'cloud computing'. There are also "private cloud" offerings touted by the likes of IBM and Fujitsu.

Hostworks founder Marty Gauvin, now planning to invest in the cloud computing space, says it is understandable that the dominant cloud deployments at this stage are private clouds. 

"Public cloud services have to overcome a range of issues such as security, service levels and compatibility before they can take a larger share of enterprise business," he said.

Local companies such as Firstservis are experimenting with public cloud services - but Higgins claims they are merely reselling 3Tera's 'cloud-based operating system' AppLogic.

"They are really only offering an Australian dollar conversion to a U.S. service," Higgins said.

Higgins said the main hosting companies in the market - Macquarie Telecom, Melbourne IT and Hostworks - are unable to offer cloud computing as they "have enough problems with legacy drag around shared hosting."

"It is a big enough challenge for them to move to a virtual environment let alone the cloud," he said. "They are not in a position to re-engineer all their legacy technology at massive expense."

A missed opportunity

Higgins said Australia has missed out on an opportunity to develop an export industry.

He is particularly concerned that the likes of and Microsoft have set up facilities in Singapore in preference to Australia.

"We have missed an opportunity to be involved in a global export industry," he said. "It's not even about consumption in Australia. It's like mining or agriculture - it's an export industry. With cloud computing, you are effectively exporting processing capacity. No one would claim and Microsoft chose Singapore for its domestic market but rather to serve the wider region.

"We've failed to exert ourselves as a logical choice. We have failed in selling our credentials to the world to host an offering from here in Australia. We've missed the boat."

Gauvin agrees that most large cloud deployments will be regional rather than national in focus.

With the industry darling Amazon focused on the North American and European markets, "many large scale cloud businesses are currently formulating their strategies for the Asia region," he said.

"Australia will struggle to be included in some of these due to bandwidth cost and uncertainties around the National Broadband Network."

One in ten use 'the cloud'

According to Longhaus' forthcoming cloud computing study, only one in ten Australian organisations are using some sort of 'cloud computing' offering, and Higgins doubts if even many of these truly understand whether what they are buying meets the definition.

Higgins hoped many would distinguish cloud computing from other confusing terms by offering respondents the opportunity to choose 'software as a service' as an additional option.

"But my gut feel is that the figure for cloud computing is overstated," he said.

In a recent poll of Australian CIOs, Longhaus inquired as to what degree organisations had automated their internal processes in preparation for cloud computing. Higgins said that some 10 percent of CIOs indicated they had the capacity for 'automated server provisioning' and only 15 percent had 'automated chargeback' (for billing of IT resources).

"If you can't provide a utility service model in your internal IT, will you really do it in the cloud?" he asked.

Longhaus' Cloud Computing study will be released later this week.

Do you know of any local service providers with something that meets the real definition of cloud computing? We'd like to hear from you.

Got a news tip for our journalists? Share it with us anonymously here.

Most Read Articles

Log In

Username / Email:
  |  Forgot your password?