The NZ Cloud Landscape in 2022

Azure has the strongest position in NZ right now, full stop. The New Zealand North region (Auckland) went live in 2020, giving organisations the ability to keep data onshore. For government agencies and regulated industries, this was the unlock that made cloud adoption viable.

Beyond sovereignty, Azure's advantage is the Microsoft ecosystem. Most NZ enterprises already run Microsoft 365, Active Directory, and various Microsoft tools. Azure integrates natively with all of them. The path from "we use Microsoft" to "we use Azure" is shorter than any other cloud migration.

The weaknesses are real though. Azure's developer experience lags behind AWS. The documentation is inconsistent. Some services feel like they were designed by committee. And pricing is complex to the point where most organisations don't fully understand what they're paying for.

AWS doesn't have a NZ region yet, though one has been announced for 2024. For now, the nearest region is Sydney. That's fine for many workloads but a problem for organisations with data sovereignty requirements.

Where AWS leads is breadth and maturity of services. If you need a specific managed service - a particular database type, a machine learning pipeline, a container orchestration platform - AWS probably has it, and it probably works well. The developer experience is generally better than Azure, and the community is larger.

The challenge for NZ enterprises is the sovereignty gap. Until the NZ region arrives, you're either running workloads in Australia or accepting the latency of more distant regions. For government and healthcare, that's often a non-starter.

GCP has the smallest footprint in NZ enterprise. No NZ region, and the nearest is Sydney. Google's strength is in data and analytics - BigQuery is genuinely excellent - and in Kubernetes, which shouldn't surprise anyone given that Google invented it.

For most NZ enterprises, GCP is the third choice. Not because it's worse technically, but because the ecosystem and local support aren't as strong. If your workload is data-heavy or you're running a sophisticated Kubernetes environment, GCP is worth evaluating. For general enterprise workloads, Azure or AWS are more practical choices.

Data sovereignty has moved from a compliance checkbox to a strategic concern. It's no longer just government agencies asking "where does our data live?" Insurance companies, healthcare providers, financial services - anyone handling sensitive NZ data is now asking the same question.

Data residency. The data is stored in NZ. Azure NZ North provides this. AWS and GCP in Sydney don't, though the data is subject to Australian privacy law, which is broadly similar to NZ's.

Data processing. Where the data is processed, not just stored. Some cloud services process data in a different region from where it's stored. This catches organisations off guard.

Operational access. Who can access the infrastructure? Cloud provider staff in other countries may have access to systems for maintenance and support. Understanding the access model matters for highly sensitive workloads.

Our recommendations depend heavily on the client's context, but some patterns are consistent.

For government and regulated industries: Azure NZ North as the primary cloud, with a clear understanding of which services are available in the NZ region. Not all Azure services are available in every region. Check before you architect.

For mid-market enterprises: Azure if you're already a Microsoft shop. AWS if your team has AWS experience and sovereignty isn't a hard requirement. Don't switch clouds for theoretical benefits.

For data-heavy workloads: Evaluate GCP's BigQuery regardless of your primary cloud. We've seen clients use GCP for analytics alongside Azure or AWS for everything else. Multi-cloud adds complexity but sometimes the tool advantage justifies it.

For startups and smaller teams: AWS. The free tier is generous, the documentation is better, the community is larger, and the developer experience makes your team more productive. Sovereignty can be addressed when it becomes a requirement, not before.

The cloud was supposed to save money. For most NZ enterprises, it hasn't. It's changed the spending pattern - from capital expenditure to operational expenditure - but total spend has often increased.

The reasons are predictable:

Over-provisioning. Teams provision for peak load and never scale down. A server running 24/7 at 10% utilisation is more expensive than a right-sized on-premises server.

Forgotten resources. Development environments that were spun up for a project and never shut down. Test databases running in production-tier configurations. Storage buckets accumulating data that nobody accesses.

Unoptimised architecture. Applications designed for on-premises deployment, lifted and shifted to cloud without rearchitecting. They work, but they're not taking advantage of cloud-native patterns that would reduce cost.

We wrote a separate guide on cloud cost optimisation earlier this year. The short version: most organisations can reduce their cloud bill by 20-30% without changing functionality. They just need to look at what they're actually using.

AWS's NZ region in 2024 will change the dynamic. Suddenly NZ enterprises will have two hyperscalers with local regions, and the sovereignty barrier for AWS disappears. Competition between Azure and AWS in NZ will intensify, which is good for pricing and good for customers.

The multi-cloud conversation will keep growing. Not because organisations want complexity, but because different clouds are genuinely better at different things. The organisations that manage multi-cloud well will have an advantage. The ones that stumble into it without a strategy will have a mess.

For now, the practical advice is straightforward: choose the cloud that fits your existing ecosystem, meets your sovereignty requirements, and that your team knows how to operate. The best cloud is the one your team can run well.