In a research note, director Steve Hodgkinson warned the cloud "will come to be viewed as the fastest, cheapest and easiest way to source basic commodity ICT services".
"[It] will set expectations benchmarks," Hodgkinson said.
"If CIOs don't pay attention they will find that their Agencies have turned to the cloud without them even knowing that it has happened - creating fragmented procurement and potential privacy and security risks."
Hodgkinson advised CIOs "to be on the front foot to ensure that cloud services are used for appropriate applications and to guide Agencies in the use of the cloud".
Cloud services can form a useful complement to in-house ICT, he said, particularly for applications that are urgent, have tight budgets, do not involve sensitive data or are aimed at collaboration across multiple agencies.
Hodgkinson also outlined the need for Australia to develop on-shore cloud computing centres "to protect and grow [the] domestic ICT industry".
He said the government sector had the operational scale required to push forward with the creation of a ‘G-Cloud' [Government cloud] and said the recent Gershon review appeared to support this in its focus on promoting "shared, on-demand computing at massive scale".
If Australia doesn't develop its own cloud services, they could become a threat to the policy executives responsible for ICT industry development because they create the risk of invisible off-shoring of Australia's ICT industry, Hodgkinson said.