Australian organisations gain A$9bn in productivity benefits from cloud

A survey of more than 500 Australian organisations that use at least one cloud service has estimated that cloud has delivered more than A$9bn (US$6.3bn) worth of cumulative productivity benefits over the last five years.

But cloud’s impact is not uniform. According to the survey, conducted by Deloitte Access Economics on behalf of Amazon Web Services (AWS), almost a quarter of businesses experienced no productivity benefits from adopting cloud services, or were not sure if they had.

Nine out of 10 businesses also experienced challenges in transitioning to the cloud as they educated staff, changed over from legacy systems, and managed the costs of the transition.

Despite these hurdles, the research shows that 42% of Australian businesses now use paid cloud computing – up from 31% in 2015-16.

The big two drivers for cloud adoption were improving customer experiences and keeping up with competitors – both cited by 38% of survey respondents. The cloud was also lauded for its ability to help businesses adopt more innovative technology.

Also, the productivity gains for businesses do not necessarily result from a reduction in jobs, the report showed.

It noted that 48% of businesses using cloud services reported an increase in IT staff and 41% reported a rise in non-IT staff since using cloud services.

For about half of users, employment remained unchanged, and only 10% of businesses saw a decrease in IT staff and 7% saw a fall in non-IT staff.

Some businesses said they had precisely zero staff before they started using cloud computing because cloud gives disruptors and innovators rapid access to a market by lowering the cost of entry and accelerating their time to impact.

Adam Beavis, commercial director for Australia and New Zealand at AWS, said: “Access to cloud computing is changing the way Australians do business by opening up new market opportunities and allowing entrepreneurs to bring new ideas and innovations to life.”

Xinja, for example, is building an Australian neobank that has its digital foundations firmly in the cloud. At the end of 2018, the firm secured a restricted banking licence that will allow it to start offering services.

Eric Wilson, founder and CEO of Xinja, said cloud computing has revolutionised the cost of starting up a bank, and democratised all manner of startup ventures. He doubted that the business could have been up and running as quickly or cheaply without using cloud services.

But there were still hurdles to clear, said Wilson. For example, the banking regulator wanted to know where cloud-based data was held, and how it would be able to get access to it if something went awry with Xinja.

While startups are natural cloud candidates, the report noted that Australia’s large enterprises are the real cloud converts.

“Larger businesses, and those in information technology, professional services and finance, are driving uptake of cloud services,” it said. “In 2018, 76.4% of businesses with over 200 employees were using cloud services, compared with 35.5% of businesses with four or fewer employees.”

But Wilson is unfazed about the prospect of big banks – Xinja’s competitors – transitioning to cloud. He believes the big banks remain shackled by legacy systems and technology debt, and although they may move some workloads to the cloud, they will not be able to compete with agile neobanks easily for at least another decade.