Published on the 11/06/2025 | Written by Heather Wright

Just 34 percent ‘truly cloud ready’…

New Zealand businesses may be happy to adopt cloud, but they’re failing to make the most of the technology – and that could stymie their plans for newer technologies such as AI.

At least, that’s according to Spark’s State of Cloud 2025 report, which surveyed 400 IT decision makers.

“It’s crucial businesses move away from conversations about what cloud providers to choose and instead discuss how to better leverage their technology investments.”

It found 70 percent have some level of cloud adoption, but many aren’t investing in the governance oversight and technical skills needed to make the most from their investment, and just 14 percent have reached what Spark dubs the ‘transformational stage’.

That’s the most advanced of the five maturity stages defined in the report, ranging from ‘awareness’ through active, operational, systemic and on to the still elusive for most, transformational.

Mark Beder, Spark customer director, enterprise and government, told iStart the survey results show many Kiwi businesses are stuck in the early stages of cloud maturity, even though most businesses acknowledge the role of cloud in their future growth.

“Cloud infrastructure is not just a tool for storing data or running applications – it is the engine driving the next wave of technological innovation,” the report says.

Without those strong cloud foundations, businesses risk falling behind in their ability to leverage emerging technologies to improve efficiency, enhance customer experiences and innovate at scale.

“Cloud plays a really big role in the efficiency ratio,” Beder says.

“You can’t unlock the value of AI, automation or advanced analytics if you’re building on outdated cloud infrastructure.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 those technologies.”

According to the survey data, most Kiwi businesses remain at the lower end of the spectrum, with almost a third (28 percent) in stage two, where they’re experimenting with cloud but not yet optimising benefits.

Just 34 percent are ‘truly cloud ready’ with well-established cloud processes and infrastructure. The remainder are running on outdated infrastructure or layering emerging technologies such as AI, without the secure, scalable foundation cloud provides, Spark sasy.

Unsurprisingly, SMEs were ‘significantly’ lower down the maturity scale than enterprises.

Ten percent of respondents went as far as to say their current cloud setup was inefficient and even hindered business outcomes.

“Businesses might have some workloads in the cloud, but not enough to actually get value out of it – it’s just showing up as a cost line versus a value line, because they’re not seeing the economics of on-prem change and are still paying more for the cloud,” Beder says.

Value comes when on-premise costs come down as more workloads move into the cloud, he adds.

The disconnect between what Spark says is ‘the strategic importance of cloud’ and the readiness of organisations to use it effectively comes despite big spending by Kiwi companies in cloud technology. IDC forecasts New Zealand public cloud spend to nearly double from $5 billion this year to $9.6 billion by 2028.

Beder is urging businesses to look at the economics of what they need to run their infrastructure and applications, and the business drivers for moving to cloud, saying it’s crucial businesses move away from conversations about what public and/or private cloud providers to choose and instead discuss how to better leverage their technology investments.

“You need to start thinking more wholistically around the value drivers you’ll get from running in the cloud and how that might play out.”

His three tips are:

• Understand the data in terms of what storage and capacity you need from your cloud infrastructure.
• Understand how you can tune it to be more effective and to make sure you can keep your costs at the level you need it to be at. “Data grows in the cloud, so you need to make sure you are managing how that data grows, because it is one of those things that you get more cost effectiveness over managing it effectively.”
• Make sure you understand how multi-cloud is going to work in the future. “Businesses will have different SaaS products that have to integrate together across different platforms. You might have your SaaS products in a different cloud to your internal applications, so really understanding how those integrate and come together is essential.”

He says cloud needs to move into beyond the IT team with an opportunity for executive leadership teams to work with IT leaders to be more strategic in their approach to cloud, understanding that it is the next competitive edge for businesses.

Over half of IT leaders say business decision makers don’t fully understand the role of cloud in enabling new technologies. Beder says 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.

“This is no longer an IT decision, it’s a wholistic business decision. The business has to be the driver of what change they are making and link that back to what they are going to need from the cloud,” he says.

“In order for us to reach the productivity goals we need to and for us to digitise and be a digital leader globally, cloud is going to have to play a really big role in making sure we get there.

“The key is to make sure we get New Zealand companies further along the maturity curve, not only at the enterprise level, but at the SME level as well.”