Elevating Cloud ROI in ANZ with Platform Engineering and Cloud Native Apps

By Ashish Thakur, Director, Technology at Material

Cloud adoption in Australia and New Zealand is entering a more mature phase. IDC notes that the transition from basic cloud adoption to advanced data-driven cloud native strategies is well underway. Supporting this, Forrester’s The State of Cloud in Australia and New Zealand reveals that 90% of Australian enterprises are already embracing multi-cloud approaches as part of their modernisation agenda.

Meanwhile, at a global level, McKinsey projects cloud is projected to generate around $3 trillion in EBITDA by 2030. Nearly $2.5 trillion will come from cloud-enabled business innovation, such as digitising core operations and creating new revenue streams, while only $570 billion stems from IT cost savings. The takeaway? Cloud is not just for reducing IT costs; its true value lies in business innovation.

Fully harnessing the potential of cloud demands that organisations move beyond infrastructure changes and adopt strategic approaches to how technology is developed, operated and managed.

Roadblocks in Cloud Value Realisation

Despite its potential value, cloud computing comes with its own significant challenges. If not strategically managed, enterprises risk falling into what Andreessen Horowitz’s describes as the ‘trillion-dollar paradox’, where high costs often overshadow cloud benefits. Interestingly, a recent CIO article highlights this growing concern, where many IT leaders are assessing their cloud strategies, with some even repatriating workloads to private clouds due to concerns around cost, security and compliance. However, adopting a hybrid cloud model that combines the agility of public cloud with the control of private cloud emerges as the most viable solution for maximising ROI, balancing flexibility, scalability and cost efficiency.

But the question remains: how can enterprises fully realise cloud ROI, while navigating its paradoxical costs?

Pathways and Enablers for Cloud ROI

Building on McKinsey’s insights, there are three typical approaches to maximising cloud ROI.

1. An IT-led transformation. Initiatives led by IT teams to optimise infrastructure, processes and operations.

2. A single-domain-focused transformation. Targeted transformations within specific domains like customer service or supply chain.

3. A cross-domain transformation. Comprehensive transformations spanning multiple business areas to optimise entire customer journeys and operations.

Regardless of the approach, the strategic enablers stay the same.

1. Foundational Investments. Invest in building a cloud-native platform.

2. Application Migration and Modernisation. Leverage the best of cloud benefits and build cloud-native apps.

The Case for Embracing Cloud-Native Platforms with a Product Mindset

A cloud-native platform is essential infrastructure to support scalable performance, embedding governance to reduce compliance risk and providing a unified foundation for consistent, scalable operations across environments.

Crucially, the principle of customer-centricity should extend to cloud and infrastructure initiatives. When the cloud and infrastructure platform is treated as a product and the focus shifts to enhancing user experience for all stakeholders involved, teams and organisations unlock significant benefits. Key aspects and outcomes of this user-centric approach include

• Prioritising User Experience: Ensuring the platform is intuitive and meets user needs effectively reduces friction and improves outcomes at every level.

• Implementing Self-Service Capabilities: Empowering users to access tools and resources independently increases efficiency.

• Minimising Cognitive Load: Streamlining processes to reduce complexity for application teams, data scientists and developers allows them to focus on high-value tasks.

Since adopting a product mindset is essential for building effective cloud platforms, tools like Kubernetes become essential, especially for organisations that move towards hybrid cloud environments.

Kubernetes: The Backbone of Platform Engineering

Kubernetes plays a central role in platform engineering. It provides the scalability, flexibility and control needed to ensure these platforms deliver on their promise of agility and efficiency, especially since the future of cloud is hybrid. Kelsey Hightower, a former Distinguished Engineer at Google, aptly stated, “Kubernetes is a platform for building platforms. It is a better place to start; not the endgame.” Over time, Kubernetes has evolved beyond its original use case of managing stateless workloads to support a broader range of applications, including AI/ML, serverless functions, data and even traditional VMs, powered by technologies like KubeVirt.

This versatility makes Kubernetes indispensable for large enterprises looking to unify their infrastructure strategy across different types of workloads, maximising efficiency and return on investment.

From Migration to Modernisation: Delivering Cloud-Native Outcomes

To fully capitalise on cloud’s core capabilities like elasticity, reliability and scalability, enterprises must rethink legacy modernisation strategies. To ensure optimal performance, resilience and operational efficiency in dynamic cloud environments, applications must be architected as cloud-native solutions by adopting the principles of The Twelve Factors app methodology.

While greenfield development can adopt these patterns from the start, legacy migrations are far more complex. This is where AI can provide significant value. It can accelerate:

• Assessment of application cloud readiness;

• Discovery of dependencies and technical debt; and

• Conversion of codebases to modern frameworks (e.g., Java EE to Quarkus, Spring Boot).

Tools like Kai showcase how AI can be deployed at scale for modernisation, supporting conversion, testing and optimisation. Moreover, modernisation should be domain-led, migrating complete business capabilities or customer journeys, rather than isolated applications. This ensures that the transformation is business-centric and maximises impact. According to McKinsey, this holistic approach, combined with AI augmentation, has the potential to boost cloud program ROI by 75% to 110% – making cloud not just a technical shift but a strategic lever for business reinvention.

Customer-Centricity: A Non-Negotiable Strategy for Cloud ROI

Delivering meaningful ROI from cloud investments requires more than technical upgrades; it demands a sharp focus on customer-centric outcomes. Whether it’s through platform engineering that empowers internal teams or modernisation that enhances customer experiences, the priority is clear: align cloud strategy with business value. Organisations must:

• Treat platforms as products, with end-users in mind;

• Drive modernisation based on end-to-end business value; and

• Leverage AI not just for speed, but for smarter decision-making.

However, customer-centricity is not just a principle – it’s an operational mandate that must shape how foundational cloud capabilities are built. Once a scalable, productised infrastructure is in place, every additional dollar invested in high-value use cases yields amplified returns. Consider these two use cases.

• Cloud Data Pipelines: Data pipelines are essential for business responsiveness. When built on a cloud-native platform designed for scalability, reusability and self-service, these pipelines can ingest, process and deliver high-quality data with speed and consistency. This in turn empowers data teams to innovate downstream and significantly improve the ROI of data-driven initiatives.

• AI Models: AI and ML initiatives thrive when infrastructure is optimised to handle complex data and compute demands. When foundational platforms are designed as products and tailored to support AI workloads, organisations can accelerate model development, streamline deployment and generate faster, more actionable insights that translate into real business value.

When customer-first thinking is woven into every layer of your cloud strategy, the cloud stops being just a cost and starts becoming a real driver of innovation, agility and long-term impact. Whether you’re reimagining platforms or scaling AI, the right foundation makes all the difference. From streamlining processes to improving decision-making and unlocking new capabilities, AI can drive higher ROI from the cloud. This means understanding the role of AI is also an important factor for an organisation’s cloud journey.

If you’d like to discuss how to bring this to life in your organisation, connect with Material’s cloud and platform engineering experts in Australia and New Zealand to start the conversation today.