AWS currently is the dominant provider of IaaS in Australia from a revenue, perception and capability perspective. Its connection with the market has been nothing short of extraordinary. In a recent capioIT client meeting, we saw a client looking as if the weight of the world had been lifted from his shoulders. The simple reason, his board had finally approved use of AWS. Not the cloud, not IaaS, but AWS.
He is not alone. Virtually every major private sector organisation in Australia, and an increasing number of public sector authorities and agencies that we meet with are at the minimum considering AWS and IaaS for many and varied workloads. Of course Rackspace has been in Australia for longer than AWS, and has had success, albeit constrained at times as it pursues a different service model to AWS.
Not surprisingly, the public and hybrid cloud provider market has long noted the geographic, compliance, security and business benefits of locating data centres in Australia. The investment in Australia by global IaaS providers is accelerating at a rapid rate.
By the end of 2014, IBM IaaS subsidiary SoftLayer would have opened two locations in Sydney and Melbourne, Microsoft Azure will be up and running and the Cisco Intercloud run data centre that Telstra is building will be also operational.
As a result by Christmas, Australia will have five global cloud and IaaS providers. This is not even considering the smaller Australian providers, (who typical to Australian enterprise and government IT) is playing a secondary competitive role, as well as traditional IT Services providers such as Dell, HP and Fujitsu who have missed the market significantly. Dell has talked about building a data centre in Australia for approximately 3 years without an announcement let alone turning over a shovel of dirt.
Public and private sector organisations in Australia will adopt a hybrid cloud model, private clouds and even traditional outsourcing models are not disappearing. What this committed investment does mean is that the opportunity for latecomers to the market is increasingly limited.
The question becomes one to understand if there is an opportunity for Google to offer compute services with a local data centre, or to rely upon Taiwan and Singapore or the US as locations. Similarly VMware have announced a Japanese location to complement the UK and US, but are considering Australia without committing publically to a timeframe.
The bottom line is that the market is increasingly crowded. capioIT believes that long term there is only room for 4 global IaaS providers. AWS will be one, Microsoft Azure most likely another and the rest will have to fight it out or consolidate. Australia may be an early location for the fever pitch battle for the future of IaaS. We will watch with some excitement from the sideline.