Half of NZ organisations report shortfalls in cloud benefits

Only half of New Zealand organisations are seeing the expected benefits from their cloud investments, according to new research released by Datacom.

The findings come from Datacom's sixth annual Cloud & Infrastructure Report, which surveyed 700 senior business and IT leaders across New Zealand and Australia. The report highlights that just 50% of New Zealand organisations, and 48% of Australian organisations, believe their cloud investments have delivered the benefits they were promised.

This represents a distinct change in attitudes around cloud computing, moving from rapid and wide-scale adoption towards a more cautious assessment of business value. The report found that a further 28% of New Zealand respondents said their cloud strategies had only partially met expectations, with 22% reporting that cloud has not delivered on expected benefits.

Peter Nelson, Managing Director of Datacom New Zealand, commented on the findings, pointing to a shift in how organisations are perceiving value from the cloud.

"The initial rush to cloud adoption delivered agility and scale, but the real value lies in what comes next. Organisations now need to rethink architecture, improve financial oversight and build internal capability," says Nelson.

The report also notes a significant decline in perceived cloud maturity among New Zealand organisations. In 2020, three-quarters rated their cloud strategies as "effective" or "very effective." That figure has now declined to only half in 2025, suggesting that many organisations are now more aware of the complexities and challenges involved in effectively managing cloud environments.

Mike Walls, Director Cloud at Datacom, indicated this decline is partially due to a realisation that successful outcomes rely on much more than simply moving workloads to the cloud.

"Organisations that lift and shift workloads to the cloud without modernising their environments or ways of working are unlikely to see the full benefits," says Walls.

"To realise ROI, businesses need to invest in continuous optimisation, automation and observability."

The survey did identify some positive outcomes from cloud adoption, with respondents citing improvements in agility, scalability and operational efficiency. Yet, for many, these improvements have not fully compensated for shortfalls in anticipated return on investment.

Containerisation

The report identifies increased adoption of containerisation as a response to some of these challenges. Forty percent of New Zealand organisations, and 43% in Australia, are either using or planning to use containerisation within the next two years. This technology is widely seen as a way to reduce operational overheads and improve flexibility in deployment.

Among those organisations currently using or planning to use containers, 45% are refactoring existing applications to run in containerised environments. Walls emphasised the impact of this approach for businesses embracing new technology models.

"Containerisation is a key enabler of portability, scalability and automation," says Walls. "It gives teams the flexibility to innovate faster and more efficiently across platforms."

AI and infrastructure

Cloud computing remains central to the adoption of technologies such as AI, automation and analytics. These technologies are now at the forefront of innovation and competitive strategies for many organisations in New Zealand and Australia.

However, there is a growing question about whether existing infrastructure is ready to cope with rising demands. The survey found that only 55% of respondents have confidence in New Zealand's in-country infrastructure to support the large-scale compute and storage requirements that AI is expected to bring.

Data sovereignty

Data sovereignty also emerged as a significant concern. Some 61% of New Zealand respondents identified data sovereignty as an issue, and the same proportion indicated they keep their data processing within New Zealand's borders. The report links this development directly to broader conversations around local infrastructure and cloud capability, particularly as AI becomes more pervasive.

Nelson commented on these trends, drawing a connection between AI-related growth and pressure on local infrastructure.

"AI is not only reshaping compute, network and storage requirements, it is also driving a renewed focus on local infrastructure and in-country cloud capabilities. AI is reshaping infrastructure requirements and putting pressure on local capacity," says Nelson.

"Organisations should also consider whether they need to review existing decisions about platforms and workloads, given increasingly complex and unpredictable global markets. Unlocking cloud's full potential requires organisations to make informed, deliberate decisions and to commit to ongoing management of their cloud environment."