By Vanessa Sorenson, Managing Director of Microsoft NZ
Cloud is having a moment. Usually the unsexy cousin of technologies like robotics and AI, with their sheep-herding robots and chess-playing computers, the announcement of multiple new Microsoft datacenters for New Zealand means cloud is getting its time in the sun.
And with good reason.
A local datacenter industry is not only good news for the companies who use them, but it can also have a great 'dividend effect' on society. Take Ireland, for example, a country with a roughly equal population to New Zealand.
When its local datacenter industry scaled up, one study showed it brought billions of euros worth of investment and created thousands of new jobs (both during construction and indirectly as a result of the investment).
This attracted further businesses to Ireland and fuelled worker education and upskilling to meet the demand. The skills workers gained from the construction or digital training involved in data migration also flowed over into other industries.
Essentially, the growth of local datacenters helps others achieve their goals.
New Zealand is one of the few countries in Asia Pacific where public cloud adoption has matured from initial disaster recovery/backup services to driving digital transformation and innovation. This level of cloud adoption creates ripple effects that go far beyond the organisations who use cloud, creating employment opportunities as well as growth for the economy.
IDC's research into cloud's potential dividend for New Zealand shows public cloud services drove more than $12.7 billion of business revenue (for suppliers and customers) in 2020. This equates to more than two per cent of GDP. Over the next four years, an estimated $30 billion will be added over and above this, creating an additional 102,000 jobs across all sectors.
The simple explanation for this is that cloud computing reduces the resources businesses usually spend maintaining their own infrastructure, freeing them up for more digital innovation. This innovation drives new revenue streams and exploration of technologies such as AI, IoT, mixed reality and data analytics that fuel business growth.
Also, security comes baked into the cloud. Microsoft spends $1 billion per year on cybersecurity and much of that goes to making Azure the most trusted cloud platform, so there's no need for organisations to be their own experts.
Cloud on the scale provided by Microsoft's own datacenter region also enables software developers to leverage unprecedented amounts of compute power, stretching their capabilities much further and accelerating growth across the entire industry.
But it's not just about the tech industry. The really great thing about hyperscale cloud is that it will enable the small enterprises that make up more than 97 per cent of New Zealand businesses to leverage the same tools as their larger competitors.
This is true democratisation of technology, leveling the playing field to allow the best ideas, not just the biggest organisations, to win. This is what will enable any New Zealand business to grow in ways beyond imagining.
Many organisations and government agencies with strict obligations to store data locally will also be free of capacity or storage constraints, because the data never has to leave New Zealand. Think of the growth opportunities that creates.
As we work towards New Zealand's 2050 Carbon Zero goal, the new-generation hyperscale datacenters will also help get us there faster. Data has historically carried high costs for the planet, requiring vast amounts of electricity to cool and power the technology. Replacing the old patchwork of power-hungry, on-premise servers with modern hyperscale datacenters will be crucial to making our entire economy greener.
With around 80 per cent of New Zealand's electricity currently from renewable sources, and with plans from the government to take this to 100 per cent, we're well-placed to make Microsoft's New Zealand's datacenters some of the most energy-efficient and sustainable on the planet.
Meanwhile, the datacenter 'innovation effect' will enable local organisations to move faster with new tools to help reduce our carbon footprint.
Already businesses like Total Utilities are leveraging the cloud to help customers monitor energy consumption in real time, while charity Sustainable Coastlines has created an AI platform charting the impact of our actions on beach litter.
Dairy giant Fonterra is migrating the majority of its operations to the datacenter region to reduce waste and boost sustainability (while enabling global growth).
Seeing Aotearoa's datacenter industry reach critical mass in the coming years will be hugely exciting, not just for the tech sector, but because virtually every aspect of society stands to gain. Being the Land of the Long White Cloud is fantastic – and being a country powered by cloud will be even better.
For further information on the cloud dividend, view Microsoft's research here.