It’s often easier to simply focus on the need to get on with the job at hand. However, here at Umbrellar, we live and breathe cloud services so when an IDC report on cloud growth in New Zealand landed, it provided a worthwhile opportunity to pause and take stock of the current state of cloud in New Zealand, and its potential in the years to come.

The latest IDC report, (‘The Microsoft Intelligent Cloud: A Solution for Your Needs’) aims to provide “a contextual framework of cloud as it relates to Microsoft and its market relevance in New Zealand.”

The report provides a valuable perspective on what the next few years might hold for the ongoing digital transformation journey of New Zealand business, no matter what cloud platform is used. These insights mirror our own view of the world here at Umbrellar, where our global partnerships joined with our local resource and capability give us a unique take on cloud support.

The report makes it clear that the C-suite in particular is still grappling with digital transformation. As it outlines the state of the New Zealand market relating to cloud, connectivity and security from a market demand and relevance perspective, the IDC report makes one thing abundantly clear – digital transformation is a complex beast, and to enable it means understanding the individual context of a business.

Some key points that stand out in the report illustrate this complexity. Firstly, in the macro view, is the forecast that the New Zealand cloud market will grow from the NZ$1.1B valuation it holds today, to around NZ$2.5B by 2021. Contrasted to this is the micro view of the individual perspectives of the CEOs and CIOs working to deliver DX in their businesses, with all the upheaval that entails.

Specifically, the report found that the big concerns of CEOs are cost, competition, and new business models. 51% of CEOs see the role of IT as transformation, while only 6% see IT as a stabiliser. That in itself is positive, as it shows most have begun the journey, but at the same time, 34% of CEOs see change management as the biggest challenge of the DX Economy.

And they are right. Cultural change is a big obstacle, and cloud technology by its very nature is a disruptive force. Cloud has fundamentally changed the commercial structure of traditional IT and is now the driver powering today’s global economy – but transformation is never easy.

This report show Kiwi organisations are currently experiencing high levels of change in areas of leadership, customer engagement, workforce engagement, their relationship with data and how it operates – and the result is a significant amount of pressure on businesses from a financial and prioritisation perspective. For example:

• 52% of CIOs say Cloud Integration is a top priority, but business and IT struggle to come together to make this work.

• 30% say Cyber Security is a key initiative, but 16% still do not have a governance framework or strategy.

• 25% of businesses surveyed now have a dedicated Chief Information Security Officer, but half of all organisations still rely on the CIO.

What is apparent – especially to those of us who have been working at the coalface of the IT industry for the past decade – is that digital transformation is not just a buzzword, but a journey that every Kiwi business needs to take so they can remain competitive in a cloud-first world.

This makes the following outtake from the IDC report all the more relevant.

“It is important for service providers to focus their energy towards developing a deep understanding of the current state of maturity of the customer such that they can align to where the prioritisation is being focused and build value-based total cost of ownership (TCO) models that have context.

Equally, the goal of any service provider should be to lift the service offering to a level where any investment / service utilisation should be aligned specifically to a business benefit (not simply a change in IT based operations). This takes time and can only be achieved through the development of consultancy-based services.”

As the report makes clear, when it comes to DX, business customers are looking for stability and capability, and expect their partners to develop collaborative partnerships for end-to-end delivery.

It’s an approach the whole New Zealand IT industry needs to take on board if we are to meet the demands of the market and unlock the potential of Kiwi business to capitalise on the billion-dollar opportunity that cloud promises for this country.