COMMENTARY--Is the stage set for significant IT growth in the coming year? Check out the scores.
I'm going to resist starting the new year with the predictions of "hot technologies" for 2004, mainly because I looked at my prognostications last January, and they haven't really changed. The ongoing thaw in corporate IT spending (and slower cycle from planning to implementation) is resulting in many of the 2003 growth technologies starting to see real traction (wireless, IP telephony, and security, for example).
Specific technologies aside, what's our playing field looking like as we enter a new year? Have the government, regulatory, and commercial forces given us the right environment for IT growth?
Communications infrastructure
After the near-collapse of one very big telco and the inevitable failure of many small dot-com start-ups, we're still left with some choice and competition in communications providers. Telstra's control over much of the "last mile" infrastructure is still a limiting competitive factor. Deregulation of wholesale local calls in 2002--on the basis of robust competition in this area--was seen by many industry observers as being anti-competitive. Conversely there is an increasing range of viable alternatives for delivering local carriage services, and many carriers have their own fibre/broadband networks. There is a surfeit of domestic capacity in fibre and growth in IP-VPN based services offering guaranteed service levels.
In its report a year ago, the Australian Communications Authority calculated that telecommunications delivered more than $10 billion in growth in economic output. Whether or not this figure is accurate, it's a good reason for continuing to drive reform and competition. Score: 6/10
Broadband availability
One of the measures of a "smart nation" is the ability to foster and enable effective communications, between companies and individuals. There is considerable frustration in the community about cost-effective access to broadband services. In capital cities, ADSL and cable offer the majority of homes broadband and competition is increasing, driven by the demand for these services. The last ACCC report (June 2003) showed 22 percent broadband growth with a total uptake of 516,900, about half of this being ADSL. About 60 percent of this number (303,000) was residential users. An increasing number of broadband hotspots (in the larger cities) is helping drive commercial acceptance of broadband, as wireless is pushed heavily by Intel with its Centrino technology.
On the downside, cable network deployment has effectively ceased, and there is no inexpensive solution for people outside a cabled or DSL-enabled area. In rural areas, satellite remains the only option, and bi-directional, high-speed satellite data services are outside the realm of most. Some hope is offered by new technologies such as i-Burst (currently in trial mode in Sydney) delivering up to 1Mbps across a broad geographic area. We're still well behind leaders, such as Korea and the US, in broadband availability but slowly improving. Score 5/10
Economy
The generally healthy state of the Australian economy augurs well for renewed IT investments, and the delivery of productivity improvements. From our perspective as a major IT network supplier, we can see a number of customers evaluating large projects and infrastructure refreshes, and considering newer technologies that have been on the back-burner. Historically low interest rates, despite the two recent increases, is also conducive to business investments. Score: 8/10
Technology competition
The past few years have killed many of the smaller technology players, but those that remain are generally profitable and provide real competition in their niche. Cisco dominates the WAN space, but hasn't been able to leverage its position and increase prices due to depressed demand. The appreciating Aussie dollar will also help keep pricing flat. The next 12 months should see stable or decreasing technology prices, and an ability to drive hard deals on emerging technologies where the vendors are hungry to grow their market share. Score: 9/10
Are you investing in IT this year? What's helping or hindering your decision to put in a wireless network or an enterprise IP telephony system? Let us know at edit@zdnet.com.au
Oliver Descoeudres is marketing manager at network IP/Internet network infrastructure builder and solutions provider NetStar Australia. He can be contacted at marketing@netstarnetworks.com or on 02 9805 9759.
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