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Navigate the challenges of cloud economics to maximise value and transform your business

  • Written by Dave Russell and Rick Vanover

Amid the ever-evolving landscape of technology, Australian businesses are increasingly recognising the immense opportunities presented by cloud-based economic models. Research shows that cloud infrastructure services spend in the Asia Pacific region accounted 14% of global cloud spending. In Australia, analysts expect that local organisations will increase their spending on digitalisation efforts by 19.3% compared to last year, reaching $19.9 billion AUD in 2023. This transformation offers increased scalability, cost-efficiency and agility, enticing businesses to thrive in the digital age. However, in order to realise cloud economics’ full potential, tech leaders must navigate an array of challenges and obstacles that come with this shift.

Exploring the potential and challenges of cloud economics

Prominent cloud service providers such as AWS and Azure are now actively recruiting economists and accountants to help clients optimise cloud setups and control costs. This emphasises the increasing importance of efficient cloud resource management because idle resources can lead to unforeseen expenses. Hyperscale providers can alter specifications and pricing unexpectedly, leading to ‘bill shock’ - a financial misalignment where companies have a lack of awareness about costs associated to a service and receive an unpleasant financial bill if they are not vigilant. When unexpected crises such as ransomware attacks occur, shifted priorities come into play, prompting hyperscalers to extend added support to customers. For example, they may offer enhanced connectivity and bandwidth without additional charges, facilitating swift data recovery.

The move from traditional infrastructure to cloud-based models does present challenges. The hybrid model combines cloud and on-premises solutions and is popular among organisations during the transitional period. It is essential to have realistic expectations and consider factors beyond just cloud services, including the need to refactor applications and account for additional costs such as personnel and software.

Cloud economics vary across APJ and may evolve at different paces, given the different economic states and cultures. While major markets are rapidly adopting cloud solutions, some regions may take more time to fully embrace this transformation. In a mature market like Australia, organisations can tap on economies of scale and benefit from cost efficiencies by adopting cloud economics. Among regions that are still transitioning towards cloud adoption, organisations can look to service providers to bridge the gap and find cloud models that suit their unique needs.

For specific considerations and localised benefits, organisations can explore the offerings of regional cloud providers. This approach takes into account political concerns and focuses on verticals where specialised local services and expertise can be of greater value.

Optimising Cloud Economics for Your Business

As we see more organisations adopt cloud economics, prioritising strategic planning and a customer-centric approach is essential to achieve success. Through the implementation of appropriate strategies, tech leaders can ensure a seamless transition, optimise value and effectively mitigate possible challenges.

To avoid possible pitfalls, organisations can look at metrics for guidance to help navigate the ever-evolving lifecycle of technology and data. Through classifying data, companies can optimise costs and storage strategies, ensuring cloud economics align with their business objectives.

Establishing an exit strategy before fully committing to the cloud is crucial. Organisations need to be ready to transition smoothly to alternative providers or on-premises services should the need arise, safeguarding against potential vendor lock-in.

Lastly, it is important for tech leaders to toe the line between security and cloud economics and adopt a holistic approach to cloud design. By integrating security, economic considerations, and disaster recovery planning from the outset, organisations can realise a more sustainable and cost-effective cloud solution.

When harnessed effectively, cloud economics presents a paradigm-shifting opportunity for businesses in Australia to embrace digital transformation and stay competitive. However, to fully reap the full benefits, organisations must be proactive in addressing the challenges that come with this transition. By understanding the intricacies of cloud economics, aligning expectations, and embracing a strategic and collaborative approach, businesses can unlock the true transformative potential of the cloud in Australia.


Dave Russell, Vice President of Enterprise Strategy, Veeam and Rick Vanover, Senior Director Product Strategy, Veeam

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