Communications report series Report 2 Cloud computing in Australia

Transcription

1 Communications report series Report 2 Cloud computing in Australia MARCH 2014

2 Canberra Red Building Benjamin Offices Chan Street Belconnen ACT PO Box 78 Belconnen ACT 2616 T F Melbourne Level 32 Melbourne Central Tower 360 Elizabeth Street Melbourne VIC PO Box Law Courts Melbourne VIC 8010 T F Sydney Level 5 The Bay Centre 65 Pirrama Road Pyrmont NSW PO Box Q500 Queen Victoria Building NSW 1230 T F Copyright notice With the exception of coats of arms, logos, emblems, images, other third-party material or devices protected by a trademark, this content is licensed under the Creative Commons Australia Attribution 3.0 Licence. We request attribution as: Commonwealth of Australia (Australian Communications and Media Authority) All other rights are reserved. The Australian Communications and Media Authority has undertaken reasonable enquiries to identify material owned by third parties and secure permission for its reproduction. Permission may need to be obtained from third parties to re-use their material. Written enquiries may be sent to: Manager, Editorial and Design PO Box Law Courts Melbourne VIC 8010 Tel: candinfo@acma.gov.au

3 Background researchacma About this report Size and scale of the cloud computing market Business cloud computing services Personal cloud computing services Storage and backup services 11 Media sharing and streaming 13 Productivity software applications 13 Communications applications 14 Overview Consumer awareness of cloud computing services Use of cloud computing services Devices used to access services SME use of cloud computing services Positives and negatives to cloud computing services Methodology for commissioned surveys Other data Data analysis iii

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5 Executive summary Cloud computing services are an emerging and increasingly important part of the Australian digital economy. These services are: becoming a storage and retrieval system for vast quantities of business and personal digital data facilitating the shift from the personal computer to off-site information storage, services and applications enabling growth in online participation and collaboration through the development of device-agnostic services. Key findings from this report cover developments in the supply and demand for cloud computing services, and the future of cloud computing services in Australia. Developments in the supply of cloud computing services Industry research indicates that the cloud computing market in Australia is likely to grow strongly over the next few years with compound growth rates for industry revenue estimated to be in the vicinity of between 19 and 25 per cent per annum. Most of the cloud computing consumer market relates to use of free services with only 17 per cent of consumers who have heard of and used cloud computing services indicating they had paid to use a service. However, there may be people paying for cloud computing services who are not aware they are using a cloud service, for example the use of itunes. The market is becoming increasingly competitive with a number of local providers competing with large global companies. The range of services on offer is diverse and includes storage and backup, media sharing and streaming, productivity tools and communications tools. Developments in the awareness and use of cloud computing services Nearly 14 million people in Australia aged 18 years and over had actively used cloud computing services in the six months to May 2013, equating to 80 per cent of the adult population. This is up from 12.6 million a year earlier, an increase of 11 per cent. In addition, 44 per cent of small and medium enterprises (SMEs) (approximately 900,000 businesses) had actively used cloud computing services at May Active use of cloud computing services is significantly higher than levels of awareness. Approximately 55 per cent of the total adult population were estimated to have heard of the term cloud computing while only 26 per cent of active cloud computing users were aware they had used a cloud computing service in the six months to May Awareness of cloud computing increased steadily with income levels, reaching 77 per cent for people earning $130,000 or more per annum. Awareness levels peaked at 69 per cent for those aged before declining to 33 per cent of people aged 65 years and over. Of Australians who had actively used cloud computing services in the six months to May 2013, the most common services used were webmail services (88 per cent) followed by use of cloud-based software (40 per cent). Of SMEs that actively used cloud computing services, the most common services used were again webmail services (57 per cent) followed by file-sharing services (43 per cent). 1

6 Consumers who had actively used cloud computing services and knew about it (26 per cent of all cloud computing users) identified the main benefits as the ability to access these services across all devices (43 per cent), data files remaining safe if anything happens to their computer (33 per cent) and freeing up of space on their own computers (19 per cent). The main negatives identified by consumers who were aware that they had used a cloud computing service were: perceptions about a lack of security (52 per cent) a lack of trust in companies providing cloud computing services (14 per cent) the perceived reliability of services (12 per cent). SMEs actively using cloud computing services identified the main benefits from these services as easier/more convenient access to services (36 per cent), services accessible from multiple locations (15 per cent) and that data files can be saved if anything happens to business computers (11 per cent). Of SMEs not using cloud computing services, 48 per cent reported that these services were not suited to the nature of the business while 22 per cent reported not knowing enough about cloud computing services. The future of cloud computing services There are a number of current and impending developments that are likely to facilitate further growth of cloud computing services in Australia. These include: the rollout of infrastructure projects such as the NBN and 4G mobile networks the implementation of cloud computing strategies by state and federal governments increased use of complementary devices to access the internet, in particular wireless devices that allow consumers to access services anywhere at anytime increased competition in the Australian market between domestic and international service providers of cloud computing services, leading to new service offerings and reduced service costs. 2

7 Table 1 Cloud computing in Australia key indicators at a glance Consumers May 2012 May 2013 % of people aged 18 years and over Have heard of cloud computing services n/a 55 Actively used cloud computing services (in the six months to May) Cloud computing services used % people aged 18 years and over that have actively used a cloud computing service Webmail Accessed online software n/a 40 Streamed content n/a 36 Backed up and stored files online n/a 35 Shared files online n/a 24 SMEs May 2013 % of all SMEs Used cloud computing services 44 Cloud computing services used % of SMEs that have actively used a cloud computing service Webmail 57 Shared files online 43 Accessed online software 40 Backed up files online 39 Streamed audio/video over the internet 28 Paid to store data/files online 26 n/a=not available. 3

8 Introduction Background The Australia Communications and Media Authority (ACMA) has continued with its practice of releasing a series of targeted reports that complement its annual communications report which is produced in fulfilment of the ACMA s reporting obligations under section 105 of the Telecommunications Act These complementary reports focus in more detail on key aspects of the emerging digital economy. The two reports released as part of the complementary series are: Report 1 Australian SMEs in the digital economy, released 22 January 2014 Report 2 Cloud computing in Australia. The ACMA Communications report is available at researchacma The communications report series is also part of the ACMA s research program. researchacma is the ACMA s research program that has five broad areas of interest: market developments media content and culture digital society citizen and consumer safeguards regulatory best practice and development. About this report The cloud computing market is evolving and becoming an increasingly important part of the Australian digital economy changing the way consumers and SMEs use and access products and services over the internet. This evolution is enabled by increasing network capacity and the growth in the take-up of internet access devices with increased functionality. While various forms of cloud computing have been available in the Australian market for around 20 years, adoption has been accelerating. Conditions are now conducive to a much wider take-up of cloud computing by consumers and businesses as a broader variety of activities are undertaken online. This report provides a snapshot of the cloud computing market in Australia for the year ending June It provides an overview from three key perspectives: The supply of these services, their delivery models and services available to consumers in The take-up, use and awareness of these services in 2013 and related drivers and barriers to take-up of cloud computing services. Market developments that are likely to facilitate greater use of cloud computing services in Australia. It also provides updated market data to that published in the ACMA occasional paper The cloud services, computing and digital data: Emerging issues in media and communications, Occasional paper 3, June

9 Source of information Unless otherwise stated, data presented in this report is from two ACMAcommissioned surveys of consumers and SMEs conducted in May Information about the survey methodologies used is provided in the appendix to this publication. Deriving estimates of users of cloud computing services Estimates of the total number and proportion of active users of cloud computing services in Australia was derived by asking survey respondents if they had undertaken a number of cloud computing functions such as used webmail, streamed content online, backed up and stored files online and shared files online. ACMA research snapshot series In addition to its annual communications report series, in 2013 the ACMA also developed the ACMA research snapshots series short fit-for-purpose research on key issues of relevance to the ACMA and its stakeholders. Snapshots released to date include: Australians cut the cord: becoming mobile only, 5 July 2013 The connected business, 15 October 2013 Home is where the work is: the digital worker, 16 October 2013 Mobile apps: putting the smart in smartphones, 26 November These and other reports can be accessed from the ACMA website 5

10 What is cloud computing? Cloud computing is a term used for delivering hosted services over the internet to remotely store, process and share digital data. There are three main categories of cloud computing, although the delineations between service categories are not always distinct, as providers may offer more than one category of service type. These categories are: Infrastructure-as-a-Service (IaaS) IaaS providers offer data-centre capacity, processing resources and storage. Platform-as-a-Service (PaaS) PaaS provides an environment for the development and hosting of applications. Software-as-a-Service (SaaS) SaaS provides software services hosted from the cloud. Figure 1 Cloud computing service categories Source: ACMA, The cloud services, computing and digital data: Emerging issues in media and communications, Occasional paper 3. In the Australian market there are three main models of cloud computing in use with each of these service categories. They are: Private for the exclusive use of one organisation. It may be managed by the organisation or a third party with the cloud computing service existing onpremises or off-premises. 1 Public made available to the general public or a large industry group and owned by an organisation selling cloud computing. 2 Services offered by Apple, Google and Amazon fit into this category. Community shared by several organisations that wish to make use of a common cloud computing environment. The cloud may be managed by the organisation or a third party and may exist on-premises or off-premises. 3 For example, the Australian Taxation Office s (ATO) Standard Business Reporting project. The GovReports 6

11 business management and budget portal was launched in 2011 and gives the ATO, State Revenue Offices and the Australian Securities and Investment Commission centralised access to business reporting information. 4 7

12 Provision of cloud computing services The cloud computing market in Australia is continually developing and this analysis provides a snapshot of the market for the year ending June Size and scale of the cloud computing market Industry research suggests significant increases in the cloud computing market in Australia over the next few years with compound growth rates for cloud computing revenue estimated to be between 19 and 25 per cent per annum. For example: the International Data Corporation (IDC) reported that the total cloud computing market in Australia will increase from $884 million in 2012 to $2.7 billion in Forrester Research estimated that cloud computing market will grow from $732 million in 2011 to $3.2 billion in Business cloud computing services Australian businesses are embracing cloud computing services and usage is increasing. For example, the IDC 2013 Australia End-User Cloud Survey found that 86 per cent of large Australian enterprises (with 500 or more employees) are currently using cloud computing, up from 71 per cent in ACMA research shows that 44 per cent of SMEs actively used cloud computing services at May As outlined in the ACMA report The cloud services, computing and digital data: Emerging issues in media and communications, Occasional paper 3, some of the benefits of cloud computing include: scalability capacity is able to be scaled up or down on demand. accessibility available across multiple platforms and operating systems. task-centric services and products are able to meet specifics of all tasks. economies of scale with no fixed costs cloud computing services present businesses with limited set up costs and low overheads. Origins of cloud computing services Cloud computing services have been available in Australia for around 20 years. The range of services available in the Australian market is diverse with a number of local and international companies offering various cloud computing services. Typically, Australian cloud computing services providers come from the following industries: communications carriers information, communications and telecommunications (ICT) providers. There has been reported growth in demand for cloud computing services in Australia and carriers and providers have announced investment plans to increase product offerings. For example, Telstra has a five-year $800 million cloud investment plan that has seen revenue increase by 33 per cent and customer numbers grow by 68 per cent in Communications carriers such as Telstra, Optus and iinet are offering cloud computing services alongside their traditional services. While carrier services are primarily focused on IaaS, some (for example, Telstra and iinet) have announced plans to expand into SaaS. 9 8

13 ICT providers offer a range of services across all levels of the cloud computing service market. They offer either cloud computing services on their own or alongside managed services from servers located in data centres across Australia. The majority of these companies offer on-demand cloud hosting pricing. Local players in the Australian market include Ninefold, Cloud Central, Australian Cloud, UltraServe, Brennan IT and BitCloud. An overview of some of these local cloud players can be found in Table 2. Table 2 Examples of Australian cloud computing service providers Provider Launch date Company overview Data centre locations Telstra 2009* A communications carrier offering enterprise grade cloud computing services and in 2011 announced it would invest $800 million to develop its cloud infrastructure over five years. Optus 2010* A communications carrier providing consumer telephony, internet and business services. Optus works with NEXTDC to provide business grade cloud computing services from NEXTDC data centres. iinet 2012* A communications carrier providing consumer and business services. Ninefold 2011 A cloud provider with infrastructure in both Australia and the US that offers on-demand pricing for cloud computing services. Backed by Macquarie Telecom. Cloud Central 2009 An Australian based cloud provider that offers on-demand pricing for cloud servers. Ultraserve 2009 An Australian based managed services and cloud hosting provider. Brennan IT 2009 An Australian based managed services and cloud hosting provider. Sydney, Melbourne, Perth, Adelaide and Canberra Canberra, Brisbane, Melbourne, Perth and Sydney Melbourne, Perth and Canberra Sydney x 2 and infrastructure in San Jose, USA Sydney, Canberra Sydney, Brisbane Sydney, Brisbane and Melbourne BitCloud 2009 An Australian based cloud provider. Sydney and Melbourne *Cloud computing services launched. Source: Znet, Australian clouds compared, 12 September 2012 and company websites. The established local cloud computing service providers in the Australian market are being challenged by large global providers like Amazon, Rackspace, Salesforce, Microsoft, IBM and Hewlett Packard which, if they do not already have a presence in Australia, have either announced or are currently building infrastructure in Australia to support their local customers. Table 3 provides an overview of global clouding computing service providers with a physical presence in Australia. 9

14 Table 3 Global cloud computing service providers Provider Service launch in Australia Service name Amazon Web Service Rackspace Microsoft IBM Sydney region establishment mid According to AWS's Asia- Pacific, the company already had 10,000 Australian customers prior to the Sydney launch and many of those are migrating from US services to its Sydney base. 10 Established an Australian presence in 2009 using its overseas data centres. Now has its own Australian data centre. Microsoft announced in May 2013 it would shift its Australian customers from its Asian data centre to two centres within Australia. 11 In 2012, IBM announced the arrival of its fully managed SmartCloud Enterprise+ service running out of its Sydney data centre. EC2 S3 Cloud Servers Microsoft Azure SmartCloud Hewlett Packard Source: Company websites unless stated otherwise. Launched cloud computing services in 2011 from a Sydney data centre. HP Cloud There are also a number of other providers servicing the Australian market that do not have a presence in Australia and offer data centre capacity in other markets. Examples include Salesforce, Google Computing Engine and Joyent, which have capacity primarily in the US. Personal cloud computing services Personal cloud computing services have been available for some time. However, it is only recently that the diversity of personal cloud computing services has emerged, encouraged by a number of key developments: 12 improved network capability, including increased availability of 3G and 4G mobile networks the subsequent growth and availability of mobile internet services, which require cloud-based services to support the increasing number of mobile applications growth in the number of internet devices owned and used by consumers, where cloud computing services enable users to access their content and services on all devices increased online participation both in terms of growth in numbers of internet users, frequency of internet use and the scope of activities performed online increased awareness and acceptance of cloud computing services as a viable platform. The growth of personal cloud computing services is meeting demand from consumers to be able to access content and applications from anywhere, at anytime, on any device. Personal cloud computing services offer a number of functions for users and many can be tailored to suit individual needs. Broadly, these services fall under the following categories: storage/backup this includes the storage of any content such as documents, pictures, movies, video or audio media sharing/streaming this includes the sharing of pictures and streaming video and music 10

15 productivity software (applications) this includes accessing online , document creation and formatting/editing content communications this includes community websites, blogs and other communication tools. It should be noted that many cloud computing services provide multiple functions and cannot be confined to a single category. For example, itunes provides media storage and sharing as well as the ability to stream video and audio content. There are also applications that are not universally defined as cloud computing services but offer many cloud computing functions. For example, Facebook is a social networking site that offers a number of cloud computing functions as it allows users to post pictures and content online, share content online with friends and also provides a web-based service. Storage and backup services Storage and backup services allow users to store content including documents such as pictures, movies, video or audio content on an external server that is accessed over the internet. ACMA research indicates that over five million consumers backed up files online in the six months to May The range of storage and functionality of backup services varies and includes: storage and backup of data and/or audio files collaboration tools allowing consumers to share data and audio files ability to access content from multiple devices. The major storage and backup services in Australia are set out in Table 4. Data from Nielsen suggests that the most used service in Australia is Dropbox, with a unique audience of 1.6 million during July

16 Table 4 Comparison of storage services Service Ownership Overview Free storage Maximum file size Annual subscription price Unique audience during July 2013 (000 s)* Dropbox Dropbox A sharing service for photos, documents and videos accessible from multiple devices. Starts at 2 GB; allows users to earn up to 16 GB space by referring friends. 300 MB cap on website uploads only From US$9.99 a month 1,648 Amazon cloud drive Amazon Storage and sharing tool for videos, photos and documents. 5 GB 2 GB From US$10 a year for 20 MB n/a MediaFire Mediafire A file and image hosting website. 10 GB 200 MB per file From US$4.99 a month for 100 GB 365 icloud Apple File storage allowing users to access files on all Apple devices. 5 GB 25 MB From A$21 a year for 10 GB 309 Google Drive Google Storage and file sharing tool. 15 GB 10 GB US$9.99 a month including 200 GB 309 SkyDrive Microsoft Storage tool that allows users to upload, sync and share files. Box Box An online file-sharing and cloud content management service. Sugarsync Sugarsync Allows users to sync, backup and share files online. 7 GB 2 GB US$10 a year for 20 GB GB 250 MB for free account 1 GB for paid account From US$9.99 a month including 25 GB 5 GB Unlimited From US$7.49 a month *Nielsen for unique audience counts. Base for this data is persons aged 2 years and over. Important note: Unique audience refers to the number of people accessing a specific site during a given month and not the number of site visits per month. Unique audience includes passive (people who land on the site but who do not actively use a cloud computing service from the site) and active users (people who actively use a cloud computing service from the site). Source: Company websites accessed June 2013 unless indicated otherwise. 12

17 Media sharing and streaming Media sharing and streaming services enable users to share media and stream audio and visual content. By using cloud computing services, content can be accessed from multiple devices while users do not have to store content on local drives and can customise the content they access. Examples of media sharing and streaming services are set out in Table 5. Table 5 Examples of media and streaming services Service Overview Unique audience during July 2013 (000 s)* YouTube A free video-sharing website. 9,682 itunes An online media storage and media player service. 4,768 Tumblr Pinterest A content sharing site where members can post and customise text, photos, quotes, links, music and videos. A content sharing site that allows members to pin images, videos and other objects to their pin board and share with the community. 1,701 1,367 Instagram An online photo and video management and sharing application. 1,235 Flickr An online photo-sharing and social-networking service that enables users to take photos, customise and share them on the internet. 889 ABC iview A free video-on-demand catch-up service for ABC TV. 599 Spotify A digital music streaming service providing DRM content from major and independent record labels. 597 BigPond Movies Allows customers to download movies online direct to the TV. 100 Pandora A free personalised radio station that plays recommended music based on user preferences. 99 *Nielsen for unique audience counts. Base for this data is persons aged 2 years and over. Important note: Unique audience refers to the number of people accessing a specific site during a given month and not the number of site visits per month. Unique audience includes passive users (people who land on the site but who do not actively use a cloud computing service from the site) and active users (people who actively use a cloud computing service from the site). Source: Company websites unless indicated otherwise. Productivity software applications Productivity software applications, which negate the need for users to purchase potentially expensive desktop software, are also becoming popular. With the wide array of productivity tools available, there are also more opportunities for people to use multiple applications targeted to their needs. ACMA research indicates that 12.3 million consumers aged 18 years and over used an online webmail service and 5.9 million used online software in the six months to May Examples of productivity software are set out in Table 6. 13

18 Table 6 Examples of productivity services Service Overview Unique audience during July 2013 (000 s)* Outlook.com Microsoft online mail service 4,538 Gmail Google online mail service 4,126 Yahoo!7 Mail Yahoo! online mail service 1,789 GoogleDocs Web-based office suite offered by Google 1,672 Evernote Online software designed for note taking and archiving 132 Xero An online accounting system 100 Microsoft Office 365 Web-based office and software suite offered by Microsoft n/a Adobe Creative Cloud Cloud services providing access to Adobe applications n/a *Nielsen for unique audience counts. Base for this data is persons aged 2 years and over. Important note: Unique audience refers to the number of people accessing a specific site during a given month and not the number of site visits per month. Unique audience includes passive users (people who land on the site but who do not actively use a cloud computing service from the site) and active users (people who actively use a cloud computing service from the site). Source: Company websites unless indicated otherwise. Communications applications There are number of cloud communications applications that allow people to connect and communicate with friends or people with common interests. Web-based is an example of a common cloud communications service that also offers productivity applications. Other communications applications include blogs, communities and forums on a wide range of topics. Examples of communications applications are set out in Table acma

19 Table 7 Examples of communications applications Service Overview Unique audience during July 2013 (000 s)* Facebook A social-networking site that allows users to share comments, photos, videos and other content with other users. 11,500 LinkedIn A social-networking site for professional/career networking. 2,774 Wordpress An online blogging and content-management site. 2,564 Google+ Twitter Online social-networking site that allows users to carry out a number of cloud functions such as store and share content, share messages, video chat, tweet and share interests. Online social networking and microblogging service that allows people to send short messages that are referred to as tweets. 2,095 2,085 Slideshare An online slide-sharing service. 456 *Nielsen for unique audience counts. Base for this data is persons aged 2 years and over. Important note: Unique audience refers to the number of people accessing a specific site during a given month and not the number of site visits per month. Unique audience includes passive users (people who land on the site but who do not actively use a cloud computing service from the site) and active users (people who actively use a cloud computing service from the site). Source: Company websites unless indicated otherwise. 15

20 % of people aged 18 years and over Awareness and use of cloud computing services Overview This section provides an overview of current usage for cloud computing services in Australia, including level of consumer and SME awareness of cloud computing services, and the type of services currently in use. Main drivers and impediments to take-up of cloud computing services are also discussed. Information presented is taken from two ACMA-commissioned surveys conducted in May 2013: a survey of 2,400 Australian consumers aged 18 and over a survey of 1,500 Australian SMEs. Consumer awareness of cloud computing services During , Australia s digital economy continued to grow strongly, with 80 per cent of Australian households and 94 per cent of SMEs indicating that they had internet access at May Just over half (55 per cent) of consumers aged 18 and over have heard of cloud computing. As might be expected, those with an internet connection had an increased awareness of cloud computing services with 60 per cent aware of cloud computing compared to only 23 per cent of those without an internet connection. In addition to connectivity, income and age also have an impact on awareness of cloud computing. As shown in Figure 2, awareness peaks for persons aged with 69 per cent having heard of cloud computing, compared to only a third of those aged 65 and over. Figure 2 Consumer awareness of cloud computing by age, May Total acma