Australia leads global push in GenAI strategy adoption

Australia is advancing faster than its global counterparts in implementing Generative Artificial Intelligence (GenAI) strategies despite encountering challenges related to skills shortages and security concerns, as reported in the seventh annual Nutanix Enterprise Cloud Index.

The report provides insights into Australian organisations' swift adoption of GenAI, with over 80% having a GenAI strategy in place and 61% actively implementing it, significantly ahead of the global average of 55%.

The primary applications of GenAI include customer support solutions and code generation tools, utilised by 55% and 48% of organisations respectively.

Despite the rapid uptake, only 53% of Australian respondents believe they possess the necessary skills to support cloud-native applications, a crucial aspect for GenAI. This figure is considerably lower than the Asia-Pacific-Japan (APJ) average of 63%. Additionally, 83% of respondents indicate that their current infrastructure requires moderate improvement to support GenAI workloads.

Michael Alp, Managing Director of Nutanix A/NZ, commented on the findings, stating, "The smartest move we're seeing right now is organisations upskilling the engineers and developers already on the ground for the new cloud-native world. These teams then take their new cloud-native skills, along with institutional IT knowledge, to make smarter infrastructure decisions that keep innovation moving, not breaking. It's a faster, more sustainable way to build the future and overcome the pervasive local skills gap."

Meanwhile, the report highlights that all surveyed organisations in Australia are in the process of containerising their applications, with 31% indicating that all new applications are developed using containers. This rate is higher than the APJ average of 22%. AI is particularly influential in this trend, as 75% of Australian organisations report that GenAI applications are among the most containerised.

Alp further elaborated on this shift, saying, "There is a quiet revolution underway within Australian organisations and that revolution is the shift to cloud-native. Containerisation is becoming the default, not the upgrade. That tells us it's already embedded in how teams are thinking and delivering from day one. The flip side of this shift, as is clear in the data, is some organisations may struggle to drive their GenAI momentum forward, as they lack the skills, structure, and scale needed to turn all this progress into long-term performance."

An additional challenge identified in the report is the disparity between the emphasis placed on data privacy and security during initial GenAI strategy development and the reality during implementation.

While 98% of respondents regard security and data privacy as top priorities, only 27% maintain these as the main considerations during execution. This gap could be a significant obstacle as GenAI adoption scales up.

The report also notes changing expectations around the return on investment (ROI) for GenAI projects. Although 38% expect these projects to initially break even or incur losses in the first year, this figure decreases to 28% over the next one to three years, suggesting a longer-term approach to measuring success.

MLOps platforms are emerging as a solution to aid innovation, with over half of the respondents (54%) reporting their use of third-party machine learning operations to accelerate GenAI deployment without requiring complex in-house infrastructure.

These platforms are helping create efficient feedback loops and facilitate quicker production of GenAI solutions, simultaneously addressing internal capability gaps.

The Nutanix Enterprise Cloud Index annually assesses the status of enterprise cloud deployments, application containerisation trends, and GenAI adoption across various regions, including the Asia-Pacific, the Americas, and the Europe, Middle East, and Africa (EMEA) region, through data gathered by Vanson Bourne from 1,500 IT and DevOps decision-makers worldwide.