SYDNEY, Dec. 4, 2012 /PRNewswire/ -- The Australian cloud computing market was worth US$ 882.4 million in 2012 and is expected to reach US$ 3.33 billion in 2016. Frost & Sullivan expects this market to grow at a CAGR of 40.3% from 2011-2016.

According to Andrew Milroy, Vice President, ICT Practice, Frost & Sullivan Asia Pacific, cloud computing is witnessing growing traction in Australia. Indeed, Australia is leading cloud adoption in the Asia Pacific region.

"Almost a third of businesses in Asia Pacific today use cloud computing. In Australia, 43% of businesses have adopted cloud computing, the highest in the region," said Milroy at Frost & Sullivan's ICT outlook briefing 2013 held in Sydney today.

The increasing use of cloud computing together with mobility, big data and social media are transforming the ways in which organizations and individuals engage with one another. They are also transforming the way business is conducted. Key changes include a reduction in the size of IT departments and much greater cross industry convergence.

"The use of cloud services will reduce the need for many traditional IT activities. Cloud services drive automation, self service, and self provisioning to the extent that the need for support services provided by IT departments will decline dramatically," said Milroy.

He added, "The use of mobile devices that are sourced by individuals (BYOD) also eliminates some support tasks as well as procurement activities."

The shrinking of IT departments will change the role of IT. CIOs and their teams will increasingly focus on enabling the use of technology across the organization. Their focus will be on ensuring that when employees use technology, they comply with policies and regulations.

"They will also seek to add business value by working with other employees and stakeholders to integrate new services and processes into their businesses. Today's developers and technical professionals will be forced to focus on ways that their skills can be used to foster innovation within diverse business activities," continued Milroy.

The use of new technologies also lowers the barriers to entry for many markets. A clear trend has emerged over the past several years whereby IT firms seek to control and manage the complete user experience.

Milroy said, "Apple has illustrated this by entering first the music industry and now multiple media industries. Google and Amazon have similarly shown little respect to the boundaries between industries. They have succeeded in switching between industries by leveraging new technologies."

Infrastructure software and hardware products have become commodities. According to Milroy, growth in these markets will come largely from acquisitions. A growing number of independent IT vendors will struggle to survive as it becomes extremely difficult to differentiate their offerings. Today's large IT vendors can be expected to acquire remaining point solution vendors that provide differentiated offerings.

He continued, "There will also be fewer remaining large IT vendors, as they compete with each other for a greater share of shrinking markets for their traditional products and services. The market will be dominated by a handful of technology titans by 2014. These enormous firms will engineer the ability to enter new industries."

"Technology is destroying the traditional boundaries between industries. Some of the world's most successful firms such as Amazon, Google and Apple recognize this. These firms use their brands, their customer relationships and their 'state of the art' technology to seamlessly move from one industry to another, 'terrorizing' incumbents in the process," said Milroy.

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Media Contacts:

Donna Jeremiah    
Corporate Communications, Asia Pacific    
P: +61 (02) 8247 8927    
E: djeremiah@frost.com

SOURCE Frost & Sullivan