NZD $9.6 billion cloud spend looms but most are unprepared

Research from Spark indicates New Zealand's cloud spend is expected to reach NZD $9.6 billion by 2028, yet only a third of businesses are prepared to fully leverage cloud technology.

The Spark State of Cloud 2025 report surveyed 400 IT decision-makers, revealing a significant gap between the recognition of cloud's strategic importance and actual readiness among organisations to implement it effectively.

The report found that 70% of New Zealand businesses identify cloud computing as essential for future growth, but only 34% possess the infrastructure, governance, and technical maturity needed to make the most of their cloud investments.

Despite these challenges, cloud technology adoption and investment are increasing across the country. Forecasts from IDC suggest that expenditure on public cloud services in New Zealand will nearly double from NZD $5 billion in 2024 to NZD $9.6 billion by 2028. This surge is expected to result in over NZD $22 billion in new revenue over the next four years, with public cloud contributing an estimated NZD $24.3 billion to the national economy in 2024 alone.

Mark Beder, Spark Customer Director for Enterprise and Government, highlighted the need for stronger governance to boost business capabilities. He called for closer cooperation between executive leadership and IT teams when managing cloud and AI investments.

"You can't unlock the value of AI, automation, or advanced analytics if you're building on outdated cloud infrastructure. Yet, over half of IT leaders say business decision-makers don't fully understand how critical cloud capability is to enabling these technologies," says Beder.

He added, "If cloud continues to be treated as just an IT issue, New Zealand businesses risk being unable to scale innovation and realise ROI from advanced technologies. It's time to bring cloud into the boardroom and recognise it as the next competitive edge for businesses.

"Spark's purpose is to help all of New Zealand win big in a digital world. Cloud platforms provide agile and scalable solutions for managing IT infrastructure and applications. Spark helps businesses choose the right mix of cloud services and plans tailored to your business goals.

"That's why we're introducing a Cloud Maturity self-assessment tool for businesses, so they can test where they sit. The assessment will help to identify their cloud maturity, identify capability gaps and then Spark can help plan practical solutions."

The State of Cloud 2025 report presents the Spark Cloud Maturity Framework, a five-stage model allowing organisations to benchmark their progress towards full digital transformation, ranging from early adoption to advanced integration. According to the report, only 14% of businesses have reached the highest transformational stage, with the majority still in the early phases of cloud maturity.

Beder outlined the principal barriers to cloud adoption, referencing security concerns, lack of skills, and uncertainties over costs. He said, "Security, skills, and cost uncertainty are the top barriers holding businesses back – and they're not just technical challenges, they're strategic ones. Only a handful of organisations have reached the transformational stage of cloud maturity, where cloud is enabling transformative business outcomes. That means the vast majority are missing out on the speed, agility, and innovation that strong cloud foundations enable. Businesses who want to compete in the next wave of digital transformation need to get cloud-ready – and they need to start now.

"Spark has cutting-edge technology and strategic guidance to empower your organisation to streamline operations, maximise efficiency and drive meaningful business results."

The report suggests that, by addressing these issues and fostering a robust approach to cloud infrastructure, New Zealand organisations can improve their technical capabilities and drive economic growth through digital transformation.