Is it time to finish the cloud story in Australia?

Upon hearing talk of migrating to the cloud, most Australian executives now follow the three-phase response of slump shoulders, roll eyes and sigh audibly.

This is a narrative that started more than a decade ago and is showing no signs of slowing down – can somebody please just change the subject? – as organisations continue to confront the morning after migration feeling.

“Cloud hasn’t yet delivered on the promise,” noted Ed Phillips, Principal Consultant of Datadust. “Customers acknowledge that there’s still problems to solve.”

According to Phillips, organisations have adopted cloud at an “incredible rate” in Australia – whether Infrastructure-as-a-Service (IaaS), Software-as-a-Service (SaaS) or Platform-as-a-Service (PaaS) – but are now struggling with cost and optimisation.

“That begs the question of whether environments should have been optimised initially?” he asked. “Cloud was positioned as a cheaper alternative given the concept of a shared risk model and the benefits of consumption. That’s exactly what the market said.”

Almost 11 years since Amazon Web Services (AWS) touched down in Australia with a new Asia Pacific (Sydney) Region in 2012 – followed by Microsoft in 2014 and Google Cloud in 2017 – cloud investment has sky-rocketed across the country.

Today, local spending on public cloud services is forecast to reach $19.9 billion with SaaS representing the highest growth segment at 30.2%, ahead of PaaS at 24% – according to Gartner research.

“Cloud first policies continue to drive increased spending on cloud infrastructure in Australia in 2023,” noted Michael Warrilow, Research Vice President at Gartner.

“In fact, IaaS remains a higher priority that most value-adding technologies – including artificial intelligence and machine learning. That’s a trend that CFOs will only put up with for so long because cloud adoption must drive incremental business value.”

For Phillips, the vast amount of corporate energy put into adopting cloud has not been matched from a lifecycle perspective.

“Cloud is proving to be a little like a Ferrari,” he explained. “It’s complicated because if you drive the car well then it makes you go fast and look good. But if you’re a little out of control you’ll get hit with lots of speeding tickets and you’ll end up having to ride it like a push bike.”

Such an analogy can be extended into enterprise and mid-market sectors as organisations struggle to maximise modern cloud operations, impacting infrastructure and application performance in the process.

“Lots of monolithic applications still exist in customer environments and that complexity needs to be simplified,” Phillips explained. “This isn’t a case of buyer’s remorse, rather how do we actually operate with the same level of agility that we provisioned for?

“There’s clearly a lot of innovation coming from the cloud given the new services and features that are continually released but customers are not taking advantage. They are still struggling to operate at a basic level and realise value from the investments already made.”

Launching Datadust

To address ongoing cloud challenges in a strategic manner, Phillips co-founded Datadust with Chris Waddington and Chafic Abdallah – a specialist services team which formally launched as a partnership on 1 April 2023.

Born out of a working relationship and friendship between the trio at Dimension Data in 2010 – now NTT – the executives are prioritising modernising platforms and operations into cloud-native models.

“We’re like-minded people with the same values who are passionate about technology but practical,” Phillips added.

Shaped by advisory consulting and solution offerings, the Sydney-based start-up aims to help organisations build a viable technology strategy while modernising operations and enhancing client experience levels.

“We’ve run big enough go-to-market offerings in the past to know that you don’t build anything that customers don’t want,” Phillips acknowledged. “We have a blank canvas in that respect and this phase is focused on testing and working with customers on how best to add value and remove pain.”

As Principal Consultant, Phillips is currently delivering strategic advisory services and building business cases for technology transformation investments. This includes working on a cloud transformation framework for an ASX100 organisation, in addition to a platform modernisation program for line-of-business applications on Microsoft Azure.

Meanwhile Waddington – as Principal Consultant of Technology Strategy and Architecture – is focused on providing technical leadership linked to program architecture and digital initiatives.

Within that context, responsibilities include defining and leading cloud operating model overhauls and building strategies for modernised integration and analytics solutions.

“Cloud hasn’t yet delivered on the promise. Customers acknowledge that there’s still problems to solve”

^{Ed Phillips (Datadust)}

As Principal Consultant of Technology Strategy, Abdallah is tasked with assessing cloud adoption approaches and aligning a roadmap of discrete work packages to optimise infrastructure while modernising key workloads and applications.

Key areas of focus span modern infrastructure solutions, automation practices and service management, in addition to delivering and integrating technologies across in-house, hosted and cloud platforms.

“The first part of our offering is focused on advisory consulting and is more pointed in approach,” Phillips explained.

“At a portfolio level, most clients typically understand broadly what they want to achieve but the challenge lies in turning an idea into a solution and then an outcome. And doing all that in an optimal fashion without spending too much money or going to tender.”

With 7-8 customer engagements already underway, Datadust has been working on a “technology assurance” blueprint based on building a strong business case capable of standing up to intense corporate scrutiny.

“Then it’s about simplifying how clients work with vendors and partners to ensure optimal returns,” Phillips added. “We’ve ran large vendor relationships in the past so understand how the vendor models work.”

Next is perfecting the strategy and technology architecture to mitigate any unforeseen costs or risks.

From a technology perspective, Datadust is already working with Microsoft specific to cloud platform, security and business applications. This is in addition to Morpheus for multi-cloud automation and management platform.

“Innovation exists around cloud management platforms and tools to consolidate cloud operations,” Phillips said. “But also to provide visibility across cyber, operations, network and risks teams. None of this is rocket science and our plan is to simplify that for clients.”

Maximising a multi-source approach

With decades of combined consulting and integration expertise behind them, Datadust is focused on building capabilities in parallel with evolving customer challenges. Central to this will be engaging with clients that are like-minded in philosophy and approach – “we’re not going to work with hundreds of clients, rather those with a similar ethos”.

“We want to work with customers that have a purpose and mission that we can align with,” Phillips added. “We’re not in this for the ego or to run a big company, we want to be involved with customers such as not-for-profit organisations who are making a difference.”

In assessing the competitive outsourcing landscape in Australia, Phillips stressed that a place in the market exists for all players of all sizes, providing they are adding value.

Similar to cloud democratising technology for customers – given that small businesses can now access enterprise-grade solutions – the same can be applied for consulting start-ups entering the market against global system integrators (GSIs).

“It’s the same for service providers,” Phillips outlined. “Smaller companies can legitimately add value to all ranges of companies, especially given most of the heavy contractual challenges are solved by the hyperscalers themselves.

“Maybe this wasn’t the case 10 years ago but today, the market is more open to different sized organisations working together and collaborating.”

Before setting up the business, the Datadust team visited similar companies in the UK and Hong Kong to perfect the art of delivering high value services as a smaller consulting partner.

“Most organisations certainly don’t want to outsource to one provider, that market is long gone,” Phillips stated.

“Most clients want to multi-source and control the keys to the kingdom. But they want the opportunity to leverage specialist skills and capabilities within certain towers which is best achieved through a multi-source environment.”