news Online group buying deals are finding favour with more and more Australians, going by sales figures. According to local emerging technology analyst firm Telsyte, the online group buying market generated revenues worth $498 million in 2011.

Starting in 2010, the online group buying industry with its exciting deals has lured enough Australians to become half a billion dollars worth in a short span of time. Some 5000 deals have been published and an average of one million vouchers sold each month. And market growth is expected to continue with more multinational players coming into the fray, better deals and loyalty programs to keep customers. Telsyte expects the group buying market to grow an additional 30 per cent in 2012, exceeding $600 million and reaching $1 billion no later than 2015.

Telsyte research reveals that physical products (such as jewellery, electronics and clothing) have been the best performing category, accounting for 30 per cent of the total market share. In a media release, Telsyte Senior Research Manager Sam Yip said, “Increased focus on physical product sales in group buying will change the face of the industry, and introduce competition between deal of the day and grocery and discount online department stores.”

2012 will be a year of continued market growth fuelled by the refocussing of group buying sites on driving customer loyalty, believes Telsyte. “In 2012 loyalty programs and targeted deals will continue to drive sales, while leading sites will enhance their mobile commerce strategies and expand their offerings,” said Yip.

The top eight group buying sites for 2011, which according to Yip generate about 95 per cent of the market revenue, were Scoopon, LivingSocial, Spreets, Cudo, Groupon, OurDeal, Deals.com.au, and Ouffer. In all, more than 80 sites were in operation in 2011, but Telsyte expects that the barriers to entry will increase in 2012 and some sites will fail due to lack of scale.

According to Yip, this year will see the local group buying sites compete with multinational players. This will mean bigger discounts, better quality deals, more offers and more loyalty programs to win over and keep Australian customers. The fourth quarter results show the continued rise of multinational group buying sites like LivingSocial and Groupon. Groupon was market leader in December 2011, while LivingSocial was ahead in Q4. Overall, though, it was Scoopon that was the market leader in 2011.

Image credit: Max Romersa, royalty free

news Pirate Party Australia has condemned the Labor Government’s plan to install compulsory full body scanners at Australia’s international airports in an attempt to strengthen anti-terrorism measures. The Party claims that these systems have repeatedly proven ineffective and that the privacy and economic costs far outweigh any supposed security benefits.

A statement issued by the party this week accuses the Government of propagating the myth that privacy invasion is essential for security. In light of the fact that existing laws and law enforcement authorities have successfully prevented the handful of planned terrorist attacks in Australia, the party questions whether new legislation is actually in the national interest.

The scanners are designed to locate metal and non-metal articles under clothing. This week, the Government plans to introduce legislation in Federal Parliament allowing for the scanners, following trials of the technology on 23,000 volunteers in Sydney and Melbourne. If introduced, the legislation will require passengers departing Australia to mandatorily pass through a full body scanner. With the exception of those with serious medical conditions, any passenger who refuses full body screening might be prevented from boarding their flight.

Branding the proposal ‘lunacy’, Brendan Molloy, secretary of Pirate Party Australia stated that he could not see the logic in installing full body scanners when the current ‘overzealous anti-terrorism laws’ seem to have checked terrorist attacks. “Why would the scheme be only international and not domestic? What security benefits are gained by banning those who would prefer a patdown from flying?” Molloy asked.

Refuting public concerns about modesty, Transport Minister Anthony Albanese was reported by The Age to have stated that the scanners produce only a generic outline and do not define any features. He assured that the images would also be unable to be copied or stored.

Speaking with Sky News, Albanese said that the scanners only identify areas on the body that need to be checked. The Government plans to roll out the new technology across airports from July 2012. The attempted Christmas Day 2009 attack on a US-bound flight by Nigerian underpants bomber Umar Farouk Abdulmutallab had prompted the government to announce plans in 2010 to beef up anti-terrorism measures at airports.

The Pirate Party also expressed concern over the continuing trend of opaque decision making by the Labor Government. The statement points out that the public has once again not been consulted by this Government about its intention to employ legislation that constitutes an attack on citizens’ civil liberties. “We have repeatedly seen plans and schemes negotiated in secrecy – ACTA, as a recent example – that threaten our rights, and have had no chance to raise our concerns until it is too late,” Molloy said. “Why would Australia adopt such a scheme given that cities such as Hamburg have rejected the system as unworkable? They are playing on fears to take away our civil liberties.”

Demanding answers to their questions, the Party has stated that the Labor Government cannot put in place such ‘draconian’ laws with public support. Labelling the proposal an ‘act of security theatre’, the statement calls attention to other successful strategies used in areas of serious instability.

“For example: Ben Gurion Airport in Israel has not had a terrorist attack since 1972, and they do not employ body scanners. Instead, they question all travellers about the purpose of their trip, and have a strong uniformed and plain-clothed security presence. The Government need to realise that throwing money and resources at an issue is not always the best approach,” concluded Simon Frew, deputy president.

news The Federal Opposition has again incorrectly alleged that it could save money by cutting the Labor Federal Government’s multi-billion dollar National Broadband Network project, despite financial projections which show the project is likely to make the Government billions.

The NBN is not listed in the Federal Budget as an expense because it is technically a government investment and will consequently not divert money away from other projects. This accounting technique has been verified by economists from the Parliamentary Library of Australia as an “internationally accepted accounting standard”.

In addition, in the long term, NBN Co’s projections show the network is slated to make a return of between 5.3 percent and 8.8 percent on the up to $44.6 billion that will be invested in the network — meaning it will return an amount ranging from $1.93 billion to $3.92 billion, as well as delivering Australia a fibre optic telecommunications network to replace Telstra’s aging copper infrastructure.

In an interview with ABC News 24 on Monday, Shadow Finance Minister Andrew Robb was questioned by presenter Lyndal Curtis on the Coalition’s ongoing claim that cutting the NBN would save money.
“On the question of spending NBN savings on easing traffic congestions, that’s a saving you then couldn’t book as a saving if you accept, which the Government doesn’t, that the NBN is effectively on the books. Is that promise, spending some of the money that you were counting on to save?” Curtis asked Robb.

Robb replied that the NBN was “borrowing money” — “$50 billion they’re going to borrow in the end, $37 billion we know for sure but it looks like another $50 billion”. “That’s got to come from somewhere. That’s money that could have been invested somewhere else, in a more productive outcome and whether it’s government money or private money, it is money that could be spent on things that would have far greater productivity improvement and we could be having an NBN at much lower cost,” Robb said.

“We could get the best of both worlds but the bottom line is that that money, it’s a combination of private and public. It’s money that is being very inefficiently invested. That money could be going to other purposes and government policy can help that happen but not necessarily always with government putting taxpayers’ money into the mix.”

However, it is believed that Robb’s statement that the money could have been spent on other matters is technically incorrect.

The NBN funding will not divert money from the Federal Budget, as it does not appear on the budget as an expense. And with the project expected to make money in the long term, cancelling it would mean the Government would not make the expected positive return on the project, meaning those extra funds would not be available in the long term for other projects. Ratings agency Standard & Poor’s reaffirmed Australia’s AAA credit rating in September 2011, meaning it is not likely that the Government will have problems using debt to fund the NBN.

Oversight
Separately yesterday, Robb demanded in a statement that Finance Minister Penny Wong “stop distancing herself from the NBN” and take a more active oversight role on a project which Robb claimed threatened “to be a massive drain on government finances”.

Robb has written to Wong in her role as shareholder minister for the NBN (Communications Minister Stephen Conroy is the other NBN shareholder minister), stating that the project needed heightened vigilance and accountability.

Robb called on Senator Wong to release monthly financial statements for NBN Co in her name. “In addition to updates regarding key financial activities, including equity injections, these statements should also provide updates in relation to contracts awarded, other acquisitions and expenses as well as staffing levels,” Robb said.

Robb said it had been reported that NBN Co had already awarded contracts worth more than $7 billion, but the public had “heard nothing from the Finance Minister about whether these decisions will present value for money to taxpayers”.

“What ‘red flag’ mechanisms are in place to alert Penny Wong to potential NBN Co activities that may not present best value outcomes and what veto authority does the shareholder minister have over decisions that are at odds with the interests of taxpayers?” Robb asked. “Penny Wong has tried to distance herself from the NBN which could prove to be the nation’s biggest white elephant, when she should be all over it. She has an obligation to become more actively involved and sharpen her clear oversight role,” he said.

So far, there has been no indication that NBN Co has blown its budget or had financial impropriety within its operations. The organisation reports regularly to the Federal Government, is subject to Freedom of Information laws, and also regularly answers questions from Labor, Coalition, Greens and independent parliamentarians through a series of parliamentary committees devoted to overseeing the project. The Federal Auditor-General also has the power to investigate NBN Co if it deems it necessary.

Wong, according to AAP, responded to Robb’s statement by stating that Robb’s assertion that there was no information, accountability or transparency was “simply unfounded”, with the Finance Minister to reply to Robb’s letter “in due course”.

Image credit: Office of Andrew Robb

news Australia’s interactive games industry is upbeat and prospects remain bright as consumption of games continues to thrive, according to a media release from Interactive Games and Entertainment Association (iGEA). The sentiments come despite latest data showing that there was a significant dip in ‘traditional retail’ computer and video games sales in 2011.

The latest data from independent market research group NPD Group Australia, which includes all revenue generated from console hardware, games software and gaming peripherals sold through retail, reveals a 12.8 per cent contraction to $1.5 billion from the corresponding 2010 period. However, iGEA CEO Ron Curry said this did not reveal the full picture as the rising popularity in digital games wasn’t reflected in the latest results. The NPD data excludes sales from online retail, downloadable content, online games subscriptions, in-game micro-transactions and mobile games.

“As Australians continue to access video games through a host of different channels, it’s becoming more challenging to aggregate sales data through a single source. Whilst the NPD data has revealed a dip in ‘traditional retail’ sales, which according to our latest Digital Australia report still represents the lion’s share of the games industry, other research has pointed to the growth in digital downloads, multi-player online games, in-game purchases and online subscriptions,” said Curry.

Local technology analyst firm Telsyte’s estimate that Australians will spend over $450 million in online gaming subscriptions and in-game purchase in 2012 corroborates Curry’s view, according to the iGEA. Telsyte Senior Research Manager Sam Yip said in the organisation’s statement: “Online gaming subscriptions and in-game virtual goods sales are growing strongly in Australia, and will account for around 20% of the overall digital goods and online subscriptions market (which consists of 26 categories such as Internet video, Internet music and digital news subscriptions) in 2012.”

The iGEA media release also cited other reports that highlight the growth of the interactive entertainment market in Australia. PricewaterhouseCoopers forecasted revenue for both traditional and digital sales to reach $2.5 billion in 2015, with online and mobile games predicted to generate close to 50 per cent of this revenue; while IDC anticipated demand for handheld gaming hardware and software would rise by roughly 20 per cent in 2012.

Curry said: “Overall, we’re seeing a lot of evidence point towards a continuing healthy interactive games industry. The incredible success of games such as Call of Duty 3: Modern Warfare 3 which became the fastest entertainment property to hit the $1 billion milestone globally, eclipsing the previous record set in 2009 by the film Avatar, is only one example of this.”

Anthony Reed, CEO of Games Development Association of Australia (GDAA) credited the success of local games developers as a driving force behind the interactive entertainment market.

“Global consumer confidence in the digital space is encouraging exceptional growth in the Australian game development industry,” he said in the iGEA’s statement. “In 2011, Australian-made games featured highly across multiple digital platforms. For example, Brisbane’s Halfbrick Studios recorded over 120 million downloads of their smash-hit, Fruit Ninja, and 11 million for the recently released, Jetpack Joyride, and Melbourne-based IronMonkey Studios won Apple’s coveted ‘Game of the Year’ award with DeadSpace. Into 2012 we will see many more innovative and creative properties made by Australian studios releasing to a global audience.”

Some key statistics from NPD Group Australia:

• The majority of games (54 per cent) sold were rated G and PG
• The top 20 software sales featured shooter games, role playing games, dancing games, timecards and sports games
• The most popular genre are shooter and action (both at 19 per cent) followed closely by family games (16 per cent)

However, it’s not all good news for Australia’s video gaming industry. As chronicled vividly in an ABC article on the subject in October last year, many in Australia’s industry fear the local development scene is on the brink of collapse, after a string of studios — including KMM Brisbane, Pandemic, Krome, THQ’s Melbourne and Brisbane studios, Visceral Games and Team Bondi — have shut their doors in recent years. Developers have blamed the issue on the high Australian dollar.

Image credit: Screenshot from Epic’s Gears of War game

news Leading Australian online movie rental company Quickflix announced yesterday that US television giant Home Box Office (HBO) would invest $10 million for a strategic stake in the company.

HBO is the USA’s biggest premium television company and a wholly owned subsidiary of Time Warner Inc., a global leader in media and entertainment with business in television networks, filmed entertainment and publishing.

According to the terms of the investment agreement, HBO will invest $10 million in Quickflix in exchange for 83.3 million preference shares at a price of 12 cents per share. These shares are convertible to ordinary shares in the company, equivalent to a fully diluted interest of 15.7 per cent after conversion. The investment is fully endorsed by the Quickflix board, and is dependent on shareholder and Australian Stock Exchange (ASX) approval. The Quickflix board recommends that shareholders vote in favour of the investment by HBO and intend to vote any shares held by them in the same fashion.

Last week, Quickflix had announced that it had signed a content licensing agreement with HBO for streaming TV series and films in Australia. HBO will make its debut of television programming availability through Quickflix streaming, providing more than 500 hours of content.

Stephen Langsford, Quickflix executive chairman and founder welcomed HBO’s strategic investment in Quickflix. “Quickflix is achieving strong subscriber growth and we’re rapidly rolling out our streaming service. The funds from HBO’s investment will enable Quickflix to execute its strategy for growth and profitability,” Langsford explained.

Quickflix had launched WatchNow, its new instant movie streaming service in Australia, in November 2011, including a free trial in December for its subscribers. In January this year, the company had announced that it was enjoying a surge in subscriber growth, with the number of subscribers increasing by 24 per cent during the last quarter. There was an overall increase of 81 per cent in number of paying subscribers over the whole of 2011.

Earlier, in July 2011 Quickflix had revealed that it had raised over $4.6 million in funding through private investors, towards the company’s growing expansion plans for online operations. For this transaction, Quickflix had sold 55 million ordinary shares at a price of $0.085 per share.

opinion/analysis
This investment can only be a positive thing for Australia. If HBO is looking to invest locally, they are obviously interested in bringing their content to an Australian audience and finding channels for that. And, let me remind you, HBO is responsible for some of the greatest and most popular TV shows of the modern era. The Wire, true Blood, Real Time with Bill Maher, Curb your Enthusiasm, and recently, Boardwalk Empire, Treme and Game of Thrones. When it comes to great content which Australians love, HBO is packing some serious heat.

Image credit: HBO’s The Wire. Opinion/analysis by Renai LeMay.

news The nation’s number two telco Optus has released a clutch of National Broadband Network pricing plans aimed at small businesses, and has also revealed it will expand its consumer broadband plans in March, adding more bundles and 24 month contracts.

The company released its first tranche of consumer NBN pricing in November last year, with the plans being favourably compared to its current ADSL and HFC cable broadband pricing. The NBN plans are virtually identical to Optus’ current consumer broadband pricing.

The small business broadband plans released today come at six different levels ranging from $59 per month up to $129 base cost, depending on whether you purchase a bundled home phone line, and how much download quota you need per month (from 100GB up to a terabyte). They feature basic broadband speeds of 25Mbps, which is one of the NBN’s equivalent speed tiers to today’s ADSL broadband, but customers can boost the speeds of their Optus broadband connections in tiers, for $5, $10 or $20 per month. $20 extra per month, for example, will get you 100Mbps speeds on an NBN connection.

The other major ISP to have released NBN business plans is iiNet. In some areas, Optus’ plans are dramatically cheaper than those of iiNet. For example, an iiNet business NBN plan with 40GB of quota and speeds of 25Mbps will cost customers $84.95 a month. However, Optus has a 100GB plan with the same speeds for just $59 per month. At the top end, the two ISPs are more comparable — for example, a terabyte plan at 100Mbps will cost Optus SME customers $139 per month, and iiNet customers $129.95 per month.

Customers can sign up to either 12 month or 24 month contracts on the plan. The plans will come with what Optus is describing as its ‘NBN Wi-Fi modem’, although it did not clarify what brand or model that modem would be.

The packages also come with a package which Optus dubs its ‘OfficeApps’ email and collaboration licence. The package bundles Google’s software as a service Apps office suite together with the ability for small businesses to register their own domain name and associate it with their email account, and a bulk SMS package called ‘webSMS’.

As with its consumer NBN broadband plans, Optus’ new small business NBN plans are very similar to its existing ADSL/HFC cable broadband plans. For example, the company offers naked (without a phone line) business broadband packages ranging from $49 a month with 10GB of data, to $119 per month with a terabyte of data. The $59, $89 and $119 price points are virtually identical with those price points in Optus’ NBN business plans. And the same is true of its bundled offerings.

In a statement issued by Optus this morning, Rohan Ganeson, Managing Director for Optus SMB said: “The NBN opens the door for small businesses to take advantage of high speed broadband to do business in new ways, and make use of the latest digital tools to be more efficient and competitive. When you consider that 48 per cent of Australian SMBs don’t have a website and only four per cent are using cloud solutions such as web-hosted email, there is a huge opportunity for small businesses to embrace digital technologies.

“Optus NBN packages have been designed to offer great flexibility and value and make it easier for smallbusinesses to take the leap into the digital world, from establishing an online presence to reach new customers,to running their applications in the cloud for 24/7 access to business data. We’ve also combined OfficeApps with our NBN offerings for the first time to give small businesses that competitive edge and help lower their operating costs.”

“This is the first of many NBN packages Optus will offer to help small businesses make the most of the NBN to enhance and grow their business,” Mr Ganeson said. “As the roll-out progresses, we’ll expand our NBN packages to cater for larger offices and add more Optus OfficeApps inclusions to help businesses run their operations faster and smarter.”

The telco also noted that in March it was planning to expand its range of consumer broadband and home phone bundles and introduce 24 month contract plans.

opinion/analysis
Once again we see that Optus has launched a range of NBN plans which are virtually identical to its existing offerings in ADSL/HFC cable broadband, lending further credence to the idea that broadband prices will not be higher under the National Broadband Network.

Last week, I wrote on Delimiter that it was “factually inaccurate” for the Coalition to continue to claim that broadband prices would be higher under the National Broadband Network. The Office of Shadow Communications Minister Malcolm Turnbull has so far not responded to an invitation to comment on this issue. However, I would suggest that the release of Optus’ small business plans this morning is another nail in the coffin of that claim.

How long will it be until Turnbull and others within the Coalition admit they were wrong on this issue, or provide some evidence for their claims?

news Former US whole of government chief information officer Vivek Kundra will hit Australia over the next several weeks for a speaking tour that will include events for his new employer Salesforce.com, as well as the Australian Information Industry Association.

Kundra has a long history working within government organisations at various levels in the US. He served as the director of infrastructure technologies at Arlington Country in Virginia in the early years of this decade, for example, before later becoming the state’s assistant secretary of commerce and technology. After that time he became the chief information officer of the District of Columbia. He had also spent time as the vice president of software firm Evincible.

When US President Barack Obama won the 2008 US election, Kundra was appointed to be the president-elect’s technology advisor. He was then named to the post of Federal chief information officer in March 2009, several months after Obama himself took office.

Kundra’s time in the US Government saw him preside over a number of major changes which have caused wider global ripples within the public sectors of countries such as Canada, the UK and Australia. Kundra, for example, was responsible for creating a whole of government IT dashboard through which government staff could easily gain a birds’ eye view of all major projects and IT expenditure across all departments. Part of the project was that each project had a picture of the accountable executive attached to it — usually a departmental chief information officer. The technology behind the dashboard is publicly available so that other jurisdictions can adopt it.

Another initiative undertaken by the US Government under Kundra was an initiative he dubbed “TechStat”. The TechStat toolkit was also made publicly available alongside the IT Dashboard. As detailed in a very useful article on the subject published by InformationWeek, TechStat sessions see an agency’s CIO and CFO, central government analysts and officials from related departments brought together with staff from the central whole of government office of the CIO to rapidly examine and evaluate the status and future prospects of a major IT project. In many cases, after reviewing a project’s current status and likely future, the government decision-makers simply cancelled the projects or rolled them into other similar iniatives in different departments.

Kundra was also responsible for pioneering a ‘cloud first’ strategy in the US Government which saw agencies required to evaluate cloud computing options prior to making any new investments in IT.
However, Kundra’s tenure within the US administration did not last long, with the executive leaving the government just two years after he joined it, in August 2011. He then joined Harvard University as a visiting fellow, before being announced as executive vice president of emerging markets for cloud computing vendors Salesforce.com in January this year.

Kundra’s time was not without controversies. A survey of IT professionals in government by online IT community MeriTalk published in September heavily criticised the executive. “Vivek’s tenure … was like a bottle of champagne — seems like a great idea, exciting start, but the plan’s unclear, and the next morning you wake up with the same problems and a sore head,” said Steve O’Keeffe, founder, MeriTalk, at the time.

In Australia, Kundra will speak at a press event in Sydney being held by Salesforce.com on Monday 13th February, and at the AIIA’s Cloud Summit in Canberra the following Wednesday.

Kundra’s tour of Australia has already attracted a degree of controversy, however.

The AIIA notified its members of Kundra’s attendance at its cloud summit in early December, noting that the executive would “lead a US/Australian dialogue on cloud computing”. It added at the time: “The dialogue will address how to eliminate obstacles to trans-border flows of data or information, while maintaining data security and privacy as well as law enforcement and national security. The two governments will explore the possibility of future dialogues on other digital topics of mutual concern.”

However, it is believed that the AIIA was not aware at the time that Kundra would be in January appointed a senior executive at Salesforce.com. It is unclear to what extent Kundra will be speaking at the event as a Salesforce.com executive, and to what extent he will be speaking as a former US Government chief information officer.

opinion/analysis
I was invited to attend Kundra’s press event in Sydney being held by Salesforce.com. However, I have declined to attend. In addition, I will not be reporting on anything that Kundra says at the AIIA’s event in Canberra, or on any other events that the executive speaks at in Australia. In short, I have decided that Delimiter will be boycotting coverage of Kundra’s attendance in Australia.

The reason is that I am personally highly disappointed in Kundra’s somewhat cynical early departure from the US Government and into the welcoming arms of leading cloud computing vendor Salesforce.com.

Kundra had a once in a lifetime chance, with his ascension to the CIO role in the new Obama administration, to make a great deal of systemic change in the US Government’s use of technology. And he brought a huge degree of effort, energy and innovative thinking to that initiative in the two short years he was in the post — creating several landmark programs which continue to have an impact on public sector technology thinking globally.

But then Kundra instantly undercut all of that good work by not following through on his efforts. After just two short years — which is a miniscule amount of time for the slow-moving public sector — the executive abandoned the US Government to its own devices and switched sides to work for a cloud computing vendor.

Kundra had a direct connection to the administration in the form of US President Obama. By leaving the Government, he left IT executives across the US public sector without that sort of high-level sponsorship for their initiatives. And by joining Salesforce.com, he has invalidated his government ‘Cloud First’ cloud computing push. Many within the US Government will be wondering to what extent Kundra was thinking of his future career when he made that push.

We’ve seen similar examples of top-level government IT executives joining vendors, with the most notable example being former Queensland Government chief information officer Peter Grant, who left his role in 2008 to become the State Director of Microsoft, a role he held for just over a year. In December Grant was reappointed to Queensland Government CIO role. However, Grant stuck around in the Qld Govt CIO role for longer (three years, compared with two) than Kundra did in the US Govt role, and he was obviously overseeing less dramatic change than Kundra was in the US, whose Federal public sector is an order of magnitude larger than anything we see in Australia.

My opinion is that Kundra should have stuck it out in the US for at least the first term of the Obama administration, and a second term if Obama won it. That way he could have driven real change in the US Government which would have affected generations of residents. Six years in government is about enough time to get some decent stuff done. Anything less is probably not enough.

In Australia, we do have some examples of public servants who have gone beyond the call of duty in serving the cause of technology in government. One of those is Department of Defence chief information officer Greg Farr, who helped completely reform the Australian Taxation Office’s IT operations and is now doing the same at Defence. Farr’s history within Australia’s government dates back a long time and recently earned him a Public Service Medal in the Australia Day honours.

Now that’s public service worth listening to.

Image credit: US Government

news The South Australian State Government today revealed that it would shortly be kicking off a huge new round of IT purchasing initiatives which would affect a string of major whole of government contracts, as part of its long-running Future ICT Services Arrangements program.

One of the aims of the program, which has been playing out over the past decade, was the realisation of South Australia’s intention to exit from its massive 10-year IT outsourcing contract with Texan giant Electronic Data Systems, with the deal to be broken up into a large number of chunks and farmed out, often to other suppliers.

The completion of that contract took place in 2007, but South Australia is still gradually working through a series of contracts which are gradually coming to full term, with the initiative being steered by the state’s whole of government chief information officer Andrew Mills.

In a notice published through the state’s tendering system this week, Mills’ office noted that on 7 March it would hold an open industry briefing to provide the industry with information regarding the next round of contracts to be signed under the Future ICT Services Arrangements program.

The state’s Minister for the Public Sector, Michael O’Brien, and its ICT Board chair, Jim Hallion will speak at the briefing. “Attendees will be given high level information regarding the State’s ICT sourcing directions with a view to supporting industry engagement in the upcoming market approach -‘Tranche 3 Services Expression of Interest (EOI),” the note states.

In late January this year South Australia updated its public status document (PDF) to detail which contracts would be within scope of the Tranche 3 contracts to be discussed at the briefing.

In that list, the state noted that it had recently completed negotiating a new client computing (desktop PCs and laptops) and server equipment panel, with new contracts expected to commence from February this year. Previously the state bought the hardware through Acer, Dell and HP, in a contract initiated back in 2006 and which had been slated to end on 30 June 2011. It is not clear which suppliers now sit on the panel.

The state is also currently negotiating a printer and photocopier equipment panel, with new contracts in that area expected to begin in July this year. It is believed that Canon, Fuji-Xerox, Kyocera-Mita and Ricoh currently provide the state with its photocopier needs, with HP, Kyocera-Mita and Ricoh working in the printer area.

In the briefing next week, the state will primarily look at telecommunications contracts, including managed network services, ISP services, mobile carriage services, telecommunications services in general, “active devices” contracts (for example, routers), PABX maintenance and electronic messaging (email). However, it will also look at its Microsoft enterprise contract.

In the past, suppliers such as Dimension Data, Telstra, Internode, NEC and Cisco have been the prime beneficiaries from new telecommunications contracts in the South Australian Government. Other major contracts not yet in scope for the state include mainframe computing, storage and hosting services.

opinion/analysis
So far South Australia is the only state jurisdiction which appears to be doing a decent job of managing its whole of government technology contracts, with every other major state appearing over the past few years to have dropped the ball completely in the area. We just don’t hear about many whole of government technology contracts from states such as Queensland, NSW and Victoria any more. And I’m not surprised, with a series of audit reports over the past few years making it clear that when it comes to the governance of technology rollouts, those states have a lot of learning to do.

So what would I like to see from South Australia’s Tranche 3 of contracts? Well, of course it’s hard to say where each vendor sits relative to each other at the moment.

However, in general, I suspect Telstra still has a huge lion’s share of telecommunications contracts in South Australia. I’d like to see some of that work farmed out to Optus, which has a good and growing enterprise division, and local player Internode continue to pick up as much Internet services work as possible as well.

When it comes to PABX gear, I’d like to see some recognition of the worth of shifting to modern IP telephony platforms, with Cisco and Avaya getting gurnseys in that area, as they’re the dominant players in that still emerging field. In switching, if that is in scope, it’d be nice to see Cisco given some competition by the likes of HP ProCurve. Switches in 2012 don’t always need to cost the earth.

As for email, if that area needs work, I’m sure an integrator like Dimension Data will pick up some work there. Realistically, for an organisation like the South Australian Government, Microsoft Outlook/Exchange is basically the only option. I’m sure there are still some Lotus Notes and even GroupWise installations in Adelaide which need to be “upgraded” to Exchange.

Did I miss anything?

news Communications Minister Stephen Conroy has demanded that the Coalition disclose some basic details of its rival broadband policy, noting that Shadow Communications Minister Malcolm Turnbull has not substantially outlined the policy further in public since a landmark speech on the issue in the middle of 2011.

The clearest indication currently available of the Coalition’s rival telecommunications policy is contained in a speech given by Turnbull in August last year, in which he proposed focusing on upgrading the HFC cable networks operated by Telstra and Optus, splitting Telstra into wholesale and retail arms, and using wireless and satellite solutions to serve remote regions.

Since that date, Turnbull has also appeared to focus heavily on the potential for fibre to the node technology to serve Australia’s future broadband needs, in comparison with Labor’s National Broadband Network policy, which focuses on more expensive and technically capable fibre to the home technology.

However, in a statement released late last week, Conroy criticised Turnbull for not releasing significant detail of the Coalition’s policy, demanding that the Shadow Minister “come clean” on the Coalition’s plans. “Six months ago today Malcolm Turnbull addressed the National Press Club on the National Broadband Network. For the rest of 2011 and already in 2012 he has been silent on any policy detail,” Conroy said.

“In one speech, three media releases and 15 tweets this year on the NBN he has continued his negative campaign and not provided an actual broadband policy. Meanwhile, his Coalition partners continue to call for fibre to the home in regional Australia, while his leader tells Australia this week we should invest in last century road and rail infrastructure not 21st century broadband.”
Last week, Conroy pointed out, Turnbull had linked to a Financial Times article on Twitter about a fibre to the node deployment by British telco BT.

“This is the same story he told us about in December,” Conroy added. “But he gives no detail on how it would be, or even if it can be, delivered in Australia. How many powered cabinets will be required to get within 400 metres of every premise? What is the actual speed that customers get rather than just ‘up to 80 Mbps’? How much will it cost? The Coalition needs to come clean – what is their actual policy, what technology do they propose to use and what will it cost.”

Conroy said Turnbull should answer the following questions about the Coalition’s broadband policy:

• How will the coalition achieve the structural separation of Telstra?
• How much will prices increase in regional Australia without a cross subsidy? How much will his “voucher” system for regional Australia cost?
• How many households does Mr Turnbull plan to serve with HFC?
• How many households does he plan to serve with FTTN? How many FTTN nodes does he plan to build?
• How many households does he plan to serve with wireless?
• What does he really think the requirements are for bandwidth in 2020?
• When does he expect his network will need to be replaced by FTTH (he calls it a migration path)?
• How much will his network cost?
• Why does he consisently misrepresent the $35 billion capital cost of the NBN?

The Office of Malcolm Turnbull has been invited to respond to Conroy’s statements.

opinion/analysis
It must be snowing in hell today, because I find myself in complete agreement with Conroy about the lack of detail which Turnbull has so far released about the Coalition’s broadband policy. As I wrote in November last year:

“After my initial burst of enthusiasm for Turnbull’s plan, the Shadow Communications Minister’s behaviour over the succeeding months — in which he has done virtually nothing to address its criticism or expound its merits in public — has done much to sour me on it. Watching Turnbull in action in that period, I often find it hard to believe that he has the energy and determination to see his rival proposal through, should he be appointed Communications Minister in a Coalition Government.”

No doubt it feels nice for Turnbull to be featured by outlets such as the Global Mail on its launch day as Australia’s “Prime Minister in waiting”. And it’s also no doubt nice for Turnbull to make appearances on prime-time Sydney radio discussing the NBN with sympathetic hosts and taking the chance for a few below the belt potshots at Conroy and the NBN project in general.

But policy development isn’t about feeling nice. It’s about substantive outcomes. Right now it seems very likely that the next Federal Election (generally expected to be held in 2013) could see a change in government, with a Coalition team under Opposition Leader Tony Abbott considered likely to knock Labor off its perch. With Abbott having threatened several times to tear up the NBN project, I think it’s about time we get some certainty from the Coalition about just what it’s proposing to replace it with. This is not a joke. This is about Australia’s future.

Image credit: Kim Davies, Creative Commons

newsThe National Broadband Network Company has blocked a freedom of information request which would have seen information released about the amount which it will cost Australians outside the company’s planned fibre broadband footprint extended to reach their premises, in a move first reported by iTNews.

NBN Co’s fibre optic network footprint is planned to cover 93% of the country’s population. This his has led to some discord among the remaining 7%, especially when some of those are right on the border of the fibre rollout zones. These users are expected to be served by satellite and wireless technologies, both of which have lesser capacity than fibre. NBN Co does have an option for residents on the edge of the network footprint. These customers can pay the charges for extending the cable. This offer came about mainly because residents in Tasmania, in some of the early stage rollout zones were unhappy about ‘just missing’ the fibre connection.

People who wished to have the fibre extended to their homes lying beyond the footprint were asked to call the company before 24 June, 2011 and request a no-obligation quote. The company would then determine how much each extension would cost. NBN Co also made it clear that it wouldn’t be a single number stating the cost of extension as this would have to vary depending on factors such as distance in kilometres from the actual footprint.

In June 2011, for example, a user of the online forum Whirlpool received a letter from NBN construction head Dan Flemming stating that his property would be covered by a wireless or satellite service. Flemming wrote, “It may be possible for you to connect to the National Broadband Network using fibre optic technology, if you agree to pay NBN Co to extend the fibre optic network to your property. Your property will then be connected to the fibre optic network as part of the planned rollout in your area in the coming months.”

However, it appears that NBN Co is not too keen on revealing these costs to the general public, with recipients of the extended connection signing non-disclosure agreements, and hence being unable to reveal how much the extended connections cost.

In a response published last week (PDF) to a request by technology media outlet iTNews under Freedom of Information laws for NBN Co to reveal the price paid, NBN Co said that it couldn’t reveal the price, as this could snowball and lead to serious problems for the company.

In a statement emailed to Delimiter responding to the FoI issue, NBN Co said that it had “appropriately assessed the FoI request” within the terms of existing legislation and “its role as a commercial entity operating within a highly competitive market”.

“NBN Co is a government business enterprise, and like any business it doesn’t make sense to release information that could jeopardise commercial activities and our ability to negotiate prices for similar services in the future,” the company said. “The quotes provided as part of the network extension trial were based on actual costs, and will vary for each location based on distance, geography and accessibility in a specific area.”

“It is important to note that NBN Co is committed to a process of engagement with communities, and a factor that’s driving our public messaging is explaining that the NBN is delivering high-speed broadband access to every home in the country via one of three technologies – fibre, fixed wireless and satellite. As we go into communities we will provide more information about the capabilities of our network and the different technologies.”

“A fibre network extension is an option that is available, and we are in the process of finalising a formal policy to be released in the near future. However we are also in the early stages of providing greater information about the new generation wireless and satellite services that will also be available.”

opinion/analysis
It seems obvious why NBN Co doesn’t want to provide the fibre extension costs publicly. It is likely the case that the company doesn’t want to kick off yet another round of media speculation and debate about the cost of the network it’s building. If the fibre extension costs were disclosed, I’m sure many edge case Australians who were just to miss out on the fibre would come forward, demanding that the costs be waived or at least cut down.

However, NBN Co’s action here also highlights a lack of transparency. The costs of its fibre extension activities will be released eventually anyway, one way or the other. It makes no sense for the company to hide them. Those costs should be released public and become part of the public debate about the NBN.

Image credit: NBN Co. Opinion/analysis by Renai LeMay