Aussie businesses buckle down on digital tech investments
Australian businesses are planning major investments in digital technologies to support ambitious expansion plans following lessons learned from the pandemic.
New findings from an annual survey of technology decision-makers by Equinix suggest that businesses appear to remain bullish about their plans for further global expansion, despite concerns of a potential looming recession and talk at the World Economic Forum in Davos about the end of globalisation.
Of the 2,900 IT decision-makers surveyed globally in the Equinix 2022 Global Tech Trends Survey, 72% of Australian respondents indicated their organisation is planning to expand into new markets in the next 12 months.
Further, almost half of the respondents (49%) said Melbourne is the most common market in Australia to have a presence in, or plans to expand within the next 12 months, followed by Sydney (45%).
The pandemic continues to have a significant impact on businesses' digital strategies, with more than half of Australia's IT leaders (56%) accelerating their company's digital evolution because of the COVID-19 crisis.
Indeed, 53% confirmed their IT budgets have increased as a direct outcome of its legacy - an insight into the now broadly acknowledged necessity for robust digital infrastructure to support evolving business needs in an instant. Furthermore, 61% believed the technology changes and investments implemented during the pandemic are here to stay.
However, several potentially limiting factors were identified by Australian businesses when it came to business success. A majority of respondents (74%) were concerned by security and data breaches and changing regulatory requirements around data privacy.
Further, 71% were also concerned about cyber attacks on their organisation. Despite those threats, nearly 80% of Australian respondents said they will remain or increase spending on carrier-neutral colocation solutions, while 80% said they intend to keep or increase investment in interconnection services to progress digital transformation and build resilience.
According to Guy Danskine, managing director at Equinix Australia, “This survey illustrates that Australia's digital leaders, despite economic uncertainties and other challenges, will invest in and plan for continued digital expansion to ensure their future business success. It's clear the pandemic has accelerated growth and innovation, and advanced organisations' digital evolution.
"Australian businesses recognise the benefits and efficiencies of new digital models, such as multicloud strategies, to facilitate their ambitious growth plans, capitalising on emerging technologies that can deliver exceptional performance in real-time.
Ensuring expansions are supported by resilient digital models is business-critical, particularly at a time of increasing volatility and emerging global threats, the study states.
As part of their digital-first strategies, 85% Australian respondents confirmed complying with local market data regulations is critical, 82% said a key priority is improving cybersecurity, while 75% highlighted the need to futureproof their businesses.
In addition, the survey revealed that in Australia:
- Customer and employee experience prioritised: Recognising digital adoption affects end users, 79% said enhancing customer experience was a priority. Companies also acknowledged improving employee experience is critical to their transformation journey and retention of talent, with 76% citing this.
- Cloud migration continues: 75% of IT leaders said they plan to move more business functions to the cloud. Of those respondents, half plan to move more of their business-critical applications, and more than half (55%) intend to move security functions to the cloud.
- Investing in innovation: Many IT leaders are looking to futureproof their businesses and take full advantage of evolving technologies, such as 5G, the internet of things (IoT), and Web3. 69% of respondents said they are moving to an everything as a service (XaaS) model, citing the simplification of IT infrastructure (67%), improved user experience (52%) and flexibility (45%) as the key reasons for doing so.
- Focusing on sustainability: While innovating, digital leaders are keeping a close eye on the sustainability of their IT infrastructure. 74% say they have a plan in place to manage the environmental impact of growing data usage and 61% are measuring and actively trying to limit the environmental impact of their IT equipment. 65% will only work with IT partners who can meet key carbon reduction targets. Indeed, 68% report sustainability is now one of their organisation's most important drivers with commitments made to science-based targets.
Rick Villars, group vice president for worldwide research at IDC noted, “Even as enterprises seek to navigate the waves of disruptions associated with inflation, supply chain disruptions, and unmet skills needs that arose in the first half of 2022, IDC consistently hears from IT leaders that timely and expansive access to innovative technology, interconnectivity, and intelligent SaaS resources is critical.
"Companies like Equinix, that can speed access to needed facilities and connectivity options, while also enabling more effective use of hybrid and multicloud services, will play a vital role in helping IT teams make sustainable technology investment decisions and take full advantage of SaaS and digital infrastructure.
Jeremy Deutsch, president Asia-Pacific, Equinix, says, “We are thrilled to see business leaders in Asia-Pacific prepare for international expansion and show more determination to speed up their pace for digitisation despite current financial concerns and operational constraints from global supply chains. This current trend is in line with findings from our latest study, where 85% of IT leaders in Asia-Pacific were confident about global expansion strategies."