Australian enterprises are accelerating their digital transformations and cloud migrations, triggering a growth in the country's Microsoft cloud ecosystem, reveals a new report by Information Services Group (ISG). According to the 2024 ISG Provider Lens Microsoft Cloud Ecosystem report for Australia, the rapid evolution of organisations' cloud strategies is being driven by concerns about cloud costs, geopolitical instability, and escalating cyberattack risks.

Microsoft's Power Platform and Dynamics 365 saw strong adoption with businesses concentrating on constructing applications correctly during their migration to the cloud. "Australian companies are cautious about technology, seeking a strong return on investment. They are partnering with providers for the best possible implementations," stated Ben Rossiter, technology modernisation lead, ISG Australia.

With the COVID-19 pandemic revolutionising employee and customer expectations, many Australian organisations, with the help of service providers, are deploying suitable devices, network security, and collaboration tools to ensure remote workers remain happy, safe, and productive.

A noted growth in AI interest among enterprises to improve human productivity is causing Microsoft’s artificial intelligence (AI) strategy for Azure to evolve. Organisations are feeling the pressure to swiftly introduce new products and services, and view AI as a solution to amplify employees’ innovative efforts. This is especially true for conversational AI - its adoption is expected to increase within Azure implementations over the next few years.

With Generative AI (GenAI) emerging as a critical technology for many corporate functions, companies are integrating AI into their workflows, business applications, and collaborative platforms. GenAI services for Microsoft clouds are helping these organisations to prepare for this new wave of capabilities. The report suggests that businesses that comprehend how to apply GenAI are predicted to outperform those late to adopt this technology.

ISG observed that after the pandemic and recent spate of ransomware attacks, Australian companies have become more confident about putting applications on cloud environments. While many have already moved low-medium complexity applications, they are now readying to trust complex core systems, such as SAP, to the cloud. This is expected to become a trend following SAP’s announcement of the impending end of life for its on-premises products.

Jan Erik Aase, partner and global leader, ISG Provider Lens Research, acknowledged the lingering hesitation: "Some Australian organisations are still reluctant to put business-critical applications on the cloud. Service providers can educate them on how to make the transition easily and minimise risks."

The report also investigates other cloud trends affecting Australian enterprises, such as the increasing significance of data governance and providers’ shift from IT-centric to customer-centric approaches, aiming to boost end-user experience and drive business outcomes.

The 2024 ISG Provider Lens Australia report assessed the capabilities of 40 providers across five quadrants: Managed Services for Azure, Microsoft 365 Services, SAP on Azure Services, Power Platform Services, and Generative AI Services for the Microsoft Clouds. It recognized Accenture & Avanade, DXC Technology, Fujitsu, TCS, and Wipro as Leaders in all five quadrants. Notably, Logicalis is recognized as a Leader in two quadrants, showcasing its robust offerings in the Microsoft cloud ecosystem. Customized versions of the report are available from Logicalis, further demonstrating its commitment to tailoring solutions to meet the specific needs of Australian enterprises.