IDC: SaaS captures lion’s share of Aussie public cloud services revenue

Australian organisations are increasingly seeking software-as-a-service (SaaS) in a bid to stay competitive in today’s digital economy, according to IDC A/NZ IT services analyst Chayse Gorton.

Public cloud services vendor revenue grew 30.6 per cent year-on-year (YoY) in 2018. Revenue reached $4.01 billion, according to IDC Australia’s public cloud services tracker.

In particular, SaaS revenue continued to capture the lion’s share of Australian public cloud services revenue in 2018. SaaS revenue accounted for 65.8 per cent of the total Australian public cloud services revenue in 2018.

“Australian organisations are seeking solutions to remain competitive in today’s digital economy. The high percentage of SaaS revenue reflects that SaaS solutions fit the bill,” Gorton said.

For example, adopting a SaaS solution can provide organisations access to the latest technologies and reduce internal resources required as the applications maintenance and the infrastructure on which it runs is managed by the solution provider, IDC said.

In Australia, approximately 58 per cent of organisations have implemented a SaaS solution.

Data security, along with brand trust, stand out as being among the most critical attributes that SaaS buyers seek, IDC said.

However, approximately 13 per cent of Australian organisations are not currently interested in deploying a SaaS solution.

Gorton said this relates to the investment that Australian organisations have poured into legacy applications.

“Rather than making a jump to SaaS, Australian organisations often wait until existing applications come to the end of their life.”

Organisations are also aware that deployed SaaS solutions can become sticky, IDC said.

SaaS applications often require complex integrations with on-premise software to avoid information silos across the cloud and on-premise. This means the organisation cannot quickly or cheaply switch even if a more innovative SaaS application appears, IDC noted.

Local cloud expert, Joel Camissar, regional director of MVISION Cloud Asia Pacific, McAfee, said Australian organisations have a long way to go to improve how they manage security in SaaS platforms in the cloud.

Joel Camissar

“Almost 70 per cent of data resides in SaaS platforms. Meanwhile, 48 per cent of data created in the cloud is shared at some point in its lifecycle. At the same time, only one-third of Australian companies have policies to protect data in the cloud. This means that organisations need to think carefully about their responsibility to protect data in SaaS platforms,” Camissar said.

“According to Gartner, 99 per cent of cloud failures by 2023 will be the customer’s fault. While cloud service providers are generally doing a great job of securing their actual platforms, companies take a significant risk when they adopt a SaaS service as they’re ultimately responsible for managing the data in the platform. However, this risk can be easily overlooked in the rush to benefit from SaaS.”