Reticence among many New Zealand businesses to adopt Cloud technology will make it hard for them to compete on a global scale - and leave them open to potentially massive financial losses in the event of network technology failures.
The warning comes from Vodafone NZ's (soon to be One New Zealand) Head of Information and Communication Technology, Glenn Johnstone. He says while most Australian businesses are looking to migrate to the Cloud, many New Zealand-domiciled organisations have an inertia about taking the step.
"There is a reticence by some (in NZ) to migrate because they don't understand what they can get from it," he says. "A lot aren't ready to take the step and have a perception that the Cloud is less secure; but in the Cloud companies don't have to rely on computer hardware and it is actually more secure.
"Australian businesses are well ahead of us (in adopting the Cloud). New Zealand companies who are not there, risk missing out on productivity gains; they will find it hard to compete and even if they eventually do get to the Cloud, they will find it hard to close the gap."
Having data in the Cloud also protects organisations against network IT failures and Johnstone says global research points to the extent of losses that can hit all businesses in the event of a crash.
A study by US-based technological research company Gartner in 2015 revealed that the cost of IT downtime is around $US5600 per minute. But, because there are so many differences in how a business operates, the study shows downtime at the low end can be as much as $US140,000 per hour, $US300,000 per hour on average or $US540,000 per hour at the high end.
The costs are even worse for Fortune 500 companies. According to a study by data services company IDC, the average annual cost of downtime is between $US1.25 billion and $US2.5 billion a year.
Johnstone says while the costs to New Zealand businesses have not been surveyed, the US figures demonstrate how severe they can be.
"Unfortunately, a lot of New Zealand businesses aren't ready to take the leap (to the Cloud) despite the potential costs of not doing so," he says. "We are well behind the world in terms of our Cloud digital infrastructure which means we're behind in terms of speed, innovation and security."
He says recent research shows that while around 75 per cent of trans-Tasman businesses (both Australia and New Zealand) expect to be using the Cloud by 2023, "if you were only looking at Kiwi businesses, the percentage would be well down on that."
Johnstone says he suspects a lot of Kiwi companies are waiting for a swathe of local data centres to open before moving to the Cloud. A number of tech companies are building centres in New Zealand including Microsoft which is planning for three - in Auckland (one is under construction at Westgate) and the South Island.
The Microsoft centres are expected to be in operation by 2025 and are being heralded as the dawn of a new era in tech acceleration in New Zealand, by bringing hyperscale public cloud capabilities on a scale never seen before.
"Adoption will be fast and furious," says Johnstone. "While I understand some are waiting for the Cloud to be localised, I'm not sure it's a reason not to do it now."
He says the Cloud will ensure businesses can continue operations during technology outages, hardware failure or unexpected disasters such as fire and floods.
"Employees can simply login normally from their laptops and perform work as usual if events like these occur. They can also work safely from all over the world as remote and hybrid-working continues to rise. This improved flexibility can help with staff retention - and attraction - giving businesses a competitive edge."
Johnstone says being in the Cloud also gives a company more tools to digitise and automate many low-level administrative tasks. While some believe they can carry these out with people, "to compete in a Cloud-based environment in this way is untenable.
"In a post-Covid world, talent is leaving New Zealand shores again. Many businesses need to work smarter with a smaller technical resource pool, especially in the tight talent market we currently have. Automation leaves staff free to focus on more complex issues like innovation and problem solving because humans are still needed for these roles."
He says while migrating to the Cloud takes co-ordination and effort, once there it means a business is no longer constrained by hardware, enabling it to streamline systems by making it easier to find data and make data-based decisions, engage with customers and leave "the long tail of legacy stuff behind."
Johnstone says when looking at a migration to the Cloud it is important for a company to have a partner - a role which Vodafone is well-placed to play. "We have the necessary expertise through our partnerships with both Microsoft Azure and Amazon Web Services.
"Our end-to-end hybrid and public Cloud offering through Vodafone Cloud Services is vital to future proofing business that want to stay competitive," he says. "Our networking pedigree means we can connect with companies by helping not just with the 'how' to migrate, but to show them the benefits of doing so; this is a space Vodafone is moving into."
For more information go to: www.vodafone.co.nz/cloud-migration/