interview Thomas Gudman is Microsoft Australia’s new director of its Dynamics Business. In this interview, Delimiter questions Gudman about Microsoft’s Dynamics CRM business in Australia, which competes in the market for enterprise software with fellow industry titans like Oracle and Salesforce.com.

How would you characterise the performance of Dynamics CRM in the Australian market over the past 12 months?
In Australia, CRM is an active, growing market across businesses of all sizes. Overall, the CRM software market is growing around 5% in 2012. Microsoft Dynamics CRM continues to grow and we are seeing renewed competitive vigour in the enterprise space. Our cloud CRM offerings, both from local service providers and our public cloud service are seeing very strong growth. We’re seeing the CRM category is undeniably at the “bet your business” level of investment for success which is exciting to me.

What customer demographic is Microsoft mainly targeting with the platform?
We’ve designed our product to be as easy to use as Microsoft Office, while being a sophisticated enterprise ready CRM platform. Our ability to deliver the same code base across public cloud, private cloud and on-premises offerings, allows us to serve a broad range of customer types. The SMB space is an area benefiting from the cloud movement and is one of our strong growth areas. The larger mid-market customers (between 250 and 1,000 employees) have responded the most positively to what we have brought to market in the last year. From an industry perspective, we’re getting a very broad range of deployments, and our local certified partners play an important role in making that happen.

What deployment style are Australian customers typically choosing (online, on-premises or third-party hosted?)
All three! This is a great verification of our “power of choice” strategy where we release the same code-base for all three deployment models. Customers can also switch between models based on their current needs. Since the worldwide rollout of our public cloud offering, Microsoft Dynamics CRM Online, early last year, we’ve seen over 60% of new customers choose this deployment option. Australian customers are in line with this trend.

Who do you consider the key partner organisations for MS Dynamics CRM in Australia?
We have too many to name here, and we have great and thriving business partners who focus on the enterprise, the mid-market and the SMB market. Some partners align to industry and most can handle cloud and on-premise deployments, based on customer needs. Readers can easily learn about our local partners by doing an Internet search on “Microsoft Dynamics Marketplace”.

Can you name any high-profile Australian customer wins over the past 12 months?
We’ve had hundreds of wins across SMB, mid-market and enterprise spanning most industries in Australia. Some representative deployments are:

• Curtin University
• Coffs Harbour City Council
• Tim Davies Landscaping
• Capital Transport
• Relationships Australia

Have you achieved any ‘swap-outs’ of competitive software in that period, and if so, which platform were swapped out?
In the CRM space, I am seeing customers switch to Microsoft for the best Outlook experience which drives productivity and adoption; cost savings and overall value as well as our 99.9% uptime Service Level Agreement. Competitors like Salesforce.com do not offer an SLA and Oracle charges an additional license fee for their cloud offering.

As our customers switch from Salesforce.com, they often share with us the pain points they’ve experienced, things they really didn’t know when they started using Salesforce.com – the hidden costs –the things they expected the service to deliver, but wasn’t included. I believe current and potential Salesforce.com customers should know the facts about what they’re getting – and what they’re not getting – when they invest in a CRM solution.

If you take a look at what is included in Microsoft Dynamics CRM Online for $54.75 user/month and compare that to what is in Salesforce.com Professional Edition at $95 user/month (which you need if you want support for role permissions) or the Salesforce.com Enterprise Edition at $180 user/month (which you’ll need if you want workflow and approval automation), then you’ll start to see why customers are questioning if Salesforce.com is the right choice.

What products do you believe are the main rivals to Dynamics CRM at the moment?
Salesforce.com and Oracle.

What impact on Dynamics CRM purchases does the fact that many customers use other portions of the Microsoft stack have in Australia?
Applications drive the requirements that make platforms great, and in turn, the platforms empower innovation in the application. This goes to Microsoft’s roots, with Microsoft Office driving Windows and the graphical interface of Windows empowering the growth of Office. It is equally true today, and as an application that consumes the full breadth and depth of Microsoft platform technology, Microsoft Dynamics CRM plays a critical role within Microsoft, helping to drive the platform to excellence, historically the on-premises server stack, and today, the various Microsoft Online Services. Microsoft Dynamics CRM adds value to customers existing investments in a broad range of Microsoft technology, making it easier for businesses to collaborate, connect and deliver results.

Equally, we’re proving with our Q2 2012 service update that you don’t have to have an end-to-end Microsoft approach to get value from Dynamics CRM. We’re expanding our CRM server (and cloud service) to support more web browsers, specifically, Apple’s Safari, Google’s Chrome and Firefox. In addition, we’re taking a leadership position in enterprise mobility by supporting all the types of smartphones and tablets that are starting to pop up in the workplace with device native Dynamics CRM clients that can work online, or offline when disconnected from the Internet.

What are the most common issues which you see customers having with Dynamics CRM, and how does Microsoft plan to address these?
Three years ago, we articulated a vision that successful companies need to be dynamic in the way they react to the world that they are in, by enabling their people, managing their processes, and connecting with their ecosystem. In reality, what makes a dynamic business thrive really depends on the people.

• Do your employees have what they need to do their jobs really well?
• Are they excited about the impact that they’re making every day?
• Are your employees in a position where they can drive the right relationships for the company with respect to the ecosystem where you do business?

This is the reason why we have developed and delivered Microsoft Dynamics CRM with customer productivity as a core focus of the product. We want to give individuals the right tools they need to not just do their best work, but to help them be passionate about their jobs. There are a number of factors that are changing the decision-making process for businesses looking to make CRM purchases: Social and mobile; Scalability and adaptability; IT infrastructure; Price; Deployment flexibility (SaaS or on-premises).

As part of our commitment to delivering rapid innovation to customers, we announced the next service update for Microsoft Dynamics CRM which will be released in Q2 this year. This release will enable businesses to be pervasively connected to their most valuable asset – customers.

Microsoft Dynamics CRM Mobile is one example of how we are leap-frogging the competition. This is, a cloud-based, cross platform, native mobile client service for Windows Phone, iPad, iPhone, Android and Blackberry Mobile Devices, that we are delivering to customers more flexibility in mobility than any other CRM provider. CRM delivered on the device people use, including devices the competition isn’t supporting. We are the only ones providing a native application for the iPad.

Has there been any impact on Dynamics CRM’s performance in Australia from the launch of locally-hosted SaaS CRM options from companies like Oracle?
No. Oracle use a 3rd party data centre in Australia. We’ve had a strong network of local service providers delivering Dynamics CRM as a cloud service from Australian data centres for over four years. These service providers are able to customise their offerings and the SLA’s to meet unique customer requirements. The ease of use and flexibility of Dynamics CRM, along with interoperability with the Microsoft server family that many Australian businesses have today, allows Microsoft customers to yield a lower cost of ownership vs. Oracle. Additionally, we deliver Dynamics CRM as a cloud service from our global data centres to many Australian customers.

Do you believe customers are refraining from using the online version of Dynamics CRM because it’s not (to my knowledge) hosted in Australia?
I am delighted with the uptake of Dynamics CRM Online. The percentage of new Dynamics CRM customers choosing our public cloud service is consistent with global trends, which is more than 60%. Our customers in general have different viewpoints on the suitability to their business on relying on a public cloud vendor. Each customer weigh up the pros and cons and then moves forward on what meets their risk profile. We encourage customers to educate themselves on how Microsoft builds and operates our public cloud services by visiting www.globalfoundationservices.com.

Image credit: Microsoft

Related posts:

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2. Questions & answers: Yammer Australia
3. Questions & answers: Zendesk Australia

interview Michael Hansen is the Asia-Pacific managing director of software as a service firm Zendesk, which offers a Web 2.0-style hosted helpdesk solution. Zendesk has recently expanded strongly in Australia, hiring staff and announcing that it has 1,000 Australian customers. In this interview, we ask Hansen about the company’s local expansion plans.

How would you characterise the performance of Zendesk in the Australian market over the past 12 months?
Amazing. We have always had loyal customers in Australia and expected opening a local office would help, but our exceptions have been exceeded. Over 1.4 million Australians have submitted tickets via Zendesk to our Australian customers; that’s over 6% of the population. This large number of users is helped by us having nearly all the group buying business as customers in Australia like Groupon who have a good portion of the over 6,000 Australian tickets submitted daily to Australian Zendesk customers.

Have local adoption rates increased, and by how much, since the company opened a local office in September 2011?
Our adaption rates have accelerated significantly. In the first 4 years of Zendesk we partnered with 600 Australian customers and in the last 8 months we have attracted 400 more, that’s a rate of 67% growth!

What customer demographic are you mainly targeting?
We target everybody, or rather everybody comes to us. We recently passed 15,000 global customers and do not do traditional sales and only work with people who have signed up for a Zendesk trial. We believe every business, whether large, medium or small, should use Zendesk to improve their customer engagement and service; be this B2C, B2B or internally through an IT help desk. Less than a year ago when we reached 10,000 customers, we released a detailed analysis of where these companies were. This showed us that companies large and small use our software.

Can you name any high-profile Australian customer wins over the past 12 months?
We have attracted many hot local start-ups and Web 2.0 business like Mifi, Connect2Field and BugHerd.

As well as this, telcos like Vodafone, local, state and Federal government customers like Royal Children’s Hospital and NSW Government Licensing Service, big media companies like News Limited, “traditional businesses” like Kwik Copy and new school Australian business going global like REA Group and Servcorp have all joined the Zendesk family.

Our 1000th customer was a “traditional” business; McLarens Young International. They do loss adjustment for global insurance and claims management, and number 1,001 was a hot mobile software business Appointuit.

Have you achieved any ‘swap-outs’ of competitive solutions in that period, and if so, which platforms were swapped out?
We’ve had many, with traditionally installed old school help desks and add-on solutions from CRM vendors, but also a growing number of swap-outs of Web 2.0 customer solutions from our direct competitors.

What products do you believe are your main rivals at the moment in this space?
They are everywhere. Everybody is trying to get into the customer engagement game, but most come from different backgrounds like CRM. For us, this has all we have ever done and our only interest is in providing the best customer service tool for our customers to successfully engage with their customers.

What do you consider to be your key differentiators compared with other solutions in this space?
Speed of implementation. You can set up Zendesk yourself in 5 minutes. Agility is another one – you can change and improve how you handle your changing customer support requirements on the fly; and lastly affordability. You can get 3 Zendesk agents for $20 a year and if you go our Enterprise Plan the most you can spend per Agent is $100 a month.

I note that Zendesk has relationships with a number of local Australian startup incubators. Can you detail what the aim is of those relationships, and how they function?
We love start-ups – Zendesk is still one and we can remember being very poor and unable to get the best tools to help grow our business. Our relationship to the incubators is that we give their start-ups free use of Zendesk. Our ulterior motive is hoping that they will keep using Zendesk as they grow and make integrations to Zendesk, so that their customers might also select Zendesk. A good example is hot local start-up BugHerd that have build a Zendesk integration.

What sorts of uses are Australian customers such as LJ Hooker, Servcorp and News Limited putting Zendesk to?
LJ Hooker use Zendesk to support its network of franchisees and staff. Servcorp use Zendesk for its internal helpdesk and a managed IT helpdesk service for customers. News Limited has multiple Zendesks used by several business units, as well as using it for multi-channel, multi-brand customer support.

What trends within the software as a service industry are most affecting Zendesk?
Acceptance. I remember 3 years ago having to convince people that SaaS was the way to go. I never do that anymore. Now it is all about the solution and how your customer can implement it fast and efficiently as part of something bigger where Zendesk is integrated with other systems. We have spent a lot of effort on providing a great open API that our customers can use for their own integrations or use one of the 100 “out of the cloud” integrations with Zendesk for anything like CRM, marketing or phone.

I believe Zendesk is hosted offshore. Have you suffered any problems with Australian customers concerned about the jurisdiction in which data is held?
Not all of Zendesk is hosted offshore. We have a CDN in Sydney to provide fast reliable service. About data concerns, our customers are savvy and smart, and understand how to work with data across jurisdictions. We have written a document explaining clearly how we comply with relevant Australian legislation.

What technological trends within support agents is Zendesk currently seeing?
Multi-channel. You need to support your customers how and when they want to be supported. Gone are the days when customers accepted being force through an IVR system during 9-5 on business days only. Zendesk supports email, web, Twitter, Facebook, mobile devices and in North America and Europe, direct phone. We have a number of Zendesk phone beta customers in Australia and hope to roll it out to everybody soon.

What are your business growth and headcount growth aims within Australia?
We have just added one more to the team in Melbourne, bring us up to 8. My hiring plan is to double that number by September of this year.

Image credit: Zendesk

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   Microsoft Australia’s Dynamics chief on CRM

analysis If you are a close follower of technology-related news in Australia’s banking and financial services sector, there is no doubt that for most of the past few years, you will have appended a question mark in your mind to the name ‘National Australia Bank’.

When it comes to the bank’s rivals, a great of information is available. The Commonwealth Bank of Australia has conducted a constant series of self-promoting activities when it comes to its $1.1 billion core banking systems replacement project and its claimed benefits. Westpac has been similarly up-front about its lack of such a project and focus on other areas (see a new interview with its new CIO in the AFR today), as has Suncorp, and ANZ, even if it hasn’t been saying much of substance, has at least been talking up its own internal IT projects.

In this context, NAB has for some time stood out as an organisation about which relatively little has been known about its technology operations.

Like CommBank and Suncorp, but unlike the other banks, the bank has reached a criticial inflexion point with respect to the legacy core banking systems which have been weighing down its operations for the past decade. Spurred by the efforts of its then-chief information officer, highly respected industry veteran Michelle Tredenick (formerly the CIO of MLC and Suncorp), the bank in mid-2008 announced that, like Suncorp did last year, it had selected Oracle as the key partner for its core banking systems refresh — a revamp it dubbed its Next Generation Platform.

The guinea pig for the project was to be NAB’s fledgling Star Direct business, which is perhaps better known for launching its online savings project UBank.

At the time, it was heady stuff. Finally another major bank had blinked in the ongoing staring contest with early adopter CBA with respect to the issue of core banking systems replacement. With NAB pursuing a similar project, much of the industry thinking went, it would only be a matter of time before Westpac and ANZ followed suit and the sector was awash with such projects, unlocking billions of dollars more of spend that seemed destined to pour into the willing hands of companies such as Oracle, SAP, Accenture, IBM, CSC and others. For a comprehensive overview of this period of history, see the following article: Changing of the Guard: National Australia Bank.

However, matters at NAB quickly took a different path.

Less than a year later, Tredenick had exited the bank courtesy of an executive reshuffle stimulated by the appointment of Cameron Clyne as NAB’s new chief executive, replaced by Adam Bennett, a comparatively lower profile IT executive who had served with Clyne at the Bank of New Zealand. But while Bennett remains NAB CIO on paper, in practice since that time it has been his boss, NAB group executive of Group Business Services Gavin Slater, who has become the public face of NAB’s IT transformation.

And from then on it became customary for the bank to talk down the NGP project.

Clyne regularly name-checked it at the bank’s annual results sessions, but neither Slater nor Bennett have appeared in public regularly to divulge details of its progress, and rumours began to spread throughout the industry about numerous delays, scope cuts, functionality delivered outside the core banking area, budget cutbacks and more.

The rumours weren’t hard to believe — after all, these were exactly the sort of outcomes which always stem from a business which ramps back its focus on major IT projects such as the Next Generation Platform project. And in October last year NAB formalised the delays with the confirmation that it had pushed back the delivery of its core overhaul to 2012, having focused on other aspects of the project in 2011, despite its pronouncement in May that 2011 was the year for key parts of its overhaul.

And in the meantime NAB’s technology support team had plenty of other worries on its plate — including an ongoing series of outages that were taking down its systems in the kind of ‘Severity 1′ incidents which are banks’ number one enemy, and a rolling series of outsourcing moves which had many of the bank’s employees up in arms as their roles were transferred directly to IBM.

Last week, for the first time in several years, the bank conducted a relatively open and transparent briefing on what’s really going on behind its closed doors, with Slater addressing a lunch held by the Trans-Tasman Business Circle, with a startlingly open view into its operations.

There are currently three major IT transformation programs running within NAB, according to Slater, in the areas of infrastructure and network transformation, systems re-platforming (the Next Generation Platform project) and lastly, customer process transformation.

With respect to its infrastructure, Slater said, NAB was conducting a project with the aim of hardening its operating environment and improving stability and performance, with key partners IBM and Telstra. In this area, the bank was “18 months” into a three year transformation of its infrastructure, with the effort affecting its datacentres and its voice and data networks (presumably, the implementation of unified communications).

With respect to its NGP project, Slater said that NAB was working with Oracle on its core banking, finance, risk and treasury systems and SAP on its general ledger replacement. The platform is already driving benefits for its UBank subsidiary, such as the ability for customers to open savings accounts online within a few minutes (also a key benefit of CommBank’s core systems replacement effort).

In terms of the bank’s wider operations, Slater didn’t go into specifics about precisely what technology had been put in place where yet — and as yet the changes which the bank has made to its core platform don’t appear to be showing up on the customer side.

However, he said, he was “very happy” to be able to report that “in the last few weeks we have successfully implemented a major foundational release that hardwires our new banking platform into the banks’ wider ecosystem”.

“It is this foundation that future releases will be built [on] without having to repeat this work,” Slater (pictured, right) added. “Clearly, change on this scale is progressive — not instant, which is why we have adopted a release-based approach as part of our risk mitigation strategy, with several major releases being delivered over the life of the program.” The executive added that the release itself was “a significant milestone for NAB”, as it was the culmination of almost two years’ work.

“Nothing of this magnitude or complexity has been implemented into our environment before,” he said.

The impact on customers, Slater said, would be substantial, with customers gaining access to greater customisation; a better choice in products and how they deal with NAB; faster fulfilment times; and greater levels of self-service.

The third piece of the NAB’s puzzle relates to what Slater described as ‘customer process transformation’, which the executive said had three key objectives: To improve the experience of staff and customers by removing many of the “system and process frustrations” that they faced; reducing risk and driving efficiency by replacing more than 100 “cumbersome legacy systems” with 10 integrated applications and migrate NAB to a new general ledger; and providing the flexibility, capability and capacity to allow NAB to “differentiate and drive innovation”. In these areas, Slater said, the bank had made “good progress to date” — in areas such as “mortgage transformation”, improved turnaround times, reduced turnovers and the ability to handle growth.

One tangible outcome from this project that Slater listed would be the ability to deliver customers a single view of the products and services which they bought from NAB — “from 20 systems/databases to a single customer view”.

A lot of this almost sound easy — and Slater made it sound in his speech as though NAB was making substantial progress on its strategy, despite the well-publicised delays in its core banking systems replacement project. However, it is obvious that modern banks operate some of the most complex IT infrastructure on the planet, and the executive also acknowledged this fact in his speech.

“The scale of our investment is clearly costly and complex,” he told the audience. “It requires careful planning and execution. A good way to describe it — if we were an airline — it would be a bit like converting a 747 to an A380 whilst in full flight. Some components are able to be built on the ground, whilst others need to be delivered while still being open for business.”

Slater noted that economic conditions continued to be uncertain — and it could be “tempting” for NAB to scale back on this level of IT investment. However, he said, the growth in usage of NAB’s digital banking platforms — the bank operates over 140 million ATM and EFTPOS transactions per month, and over 20 million Internet banking transactions — means it needs to continue to build for the future.

“Ultimately the economy will find its balance, and we don’t want to find ourselves behind the eight ball,” said Slater. One wonders what other banks such as ANZ and Westpac, which are not yet pursuing core banking transformation projects, would make of that comment.

“It is difficult to predict what the bank of tomorrow will look like in ten years and beyond,” said Slater, “but we do know that growth in the digital economy will continue at an exponential rate … large organisations the world over, regardless of industry, will have to, at some point, face into the strategic challenge of addressing complex, ageing and inflexible technology in a substantive way.”

“They will have to content with the growing chasm between old and new technology. Simply putting a new roof on an old house with weakened foundations will not be a sustainable solution.”

To download a full copy of Slater’s speech click here (PDF).

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2. Suncorp picks Oracle to replace core
3. This is the year for NAB core banking overhaul

interview Ross Hill is a well-known personality in Australia’s social media and entrepreneur space, having founded the Hive networking event series for entrepreneurs and worked as an innovation analyst at Deloitte Digital. Since January 2011 he’s been an enterprise relationship manager with enterprise 2.0 social networking company Yammer. In this interview, Hill answers our questions about Yammer in Australia.

How would Yammer characterise the level of adoption of its platform in Australia?
Australia has the fifth biggest Yammer user base worldwide. Adoption in Australia has been steadily increasing since Yammer launched in 2008. There are currently over 272,000 users from 15,000 different company networks. Yammer has over 4 million verified corporate accounts worldwide and is growing at 250,000 users per month.

What proportion of that adoption has Yammer been able to commercialise — that is, shift onto one of its premium models?
Right now about 20% of Yammer users are on premium networks.

In which sectors in Australia has Yammer most strongly been adopted so far?
Some of our first customers – globally – were from Australia in traditional private enterprises like Deloitte Australia, NAB and Suncorp. From the outset Yammer has been driven by the belief that every company will have its own social network for collaboration, no matter the size or industry. Today government agencies like VicRoads and not-for-profits like Earth Hour are adopting Yammer as fast as our biggest enterprise customers like NAB and Westfield in the private sector.

Which sectors have been slowest to adopt Yammer?
The beauty of Yammer is that is easily translates across every sector in every geography worldwide, even highly regulated industries such as financial services and pharmaceuticals have high adoption rates.

Can you give examples of Australian organisations which have adopted Yammer?
Yammer adoption spans a range of sectors, industries and organisational sizes; some key customers in Australia include Westfield, National Australia Bank, AMP, Earth Hour and Deloitte.

Deloitte Australia
“I’m very active in talking to our people on Yammer. Every executive wakes up in the morning and says, ‘I have a good strategy. How do I execute it?’ 75% of our employees are young people – digital natives – and this is how they talk to each other. The only way I’m going to get to them is to talk to them in their medium.” -Giam Swiegers, CEO, Deloitte Australia

As Deloitte’s Yammer activity continues to grow and evolve, so do the use cases. In fact, Peter Williams says they now see “a new use case everyday.” Deloitte recognizes that even seemingly “small” ideas can lead to big results, as evidenced by the “fun experiment” with Yammer that started small and resulted in a big transformation. “We are continually amazed by the creativity and ingenuity of our employees, who create new use cases on Yammer every day. Enterprise social networking has helped transform how we operate and collaborate, yet, I feel like we are still just scratching the surface.” – Peter Williams, CEO, Deloitte Digital

“I gave a presentation, shared the link on Yammer, and had a very bold challenge from somebody in Melbourne that disagreed with my view. We got into a public debate, and the next morning quite a few people chatted with me about how remarkable it was that Yammer had flattened the organization. This was a first-year analyst. It’s what we want – I’d much rather have him debate it with me than go to the pub and tell his mates that he doesn’t agree with me. This way I know what’s happening.” -Giam Swiegers, CEO, Deloitte Australia

“Yammer has become an ‘internal Google’ for us. When you have a question, chances are you can search Yammer and find a thread with the answer”. -Luke McCormack, Senior Analyst, Deloitte Australia

Deloitte Australia have built many enterprise integrations into their own services, such as their Innovation Academy app, the Who What Where ‘enterprise foursquare’, and their internal search engines. Running an internal analysis, Deloitte Australia found that professionals with 10 or more posts on Yammer had an average turnover rate of 2%, compared to a firm-wide average of 15-20%. These professionals engaged in internal enterprise social networking were 8-10x as likely to stay with the firm. Lower employee turnover results in significant time and cost savings in recruiting, interviewing, and on-boarding new hires.

When Deloitte launched Yammer globally it was a 90 day rollout to 180k users across many different email and directory systems. This time to value is unheard of and demonstrates how agile and immediate a technical platform can be. With the technical side taken care of that leaves more energy and resources for building adoption and engagement.

Suncorp
Suncorp use Yammer across the company to connect staff and empower them to problem solve with each other. “Your culture is the way that work gets done.” Jeff Smith, Suncorp Business Services. During the floods in Brisbane, 5000 people couldn’t make it to work. Within a couple of hours 3,000 people were working from home, thanks to Yammer.

Earth Hour
Earth Hour have 8 employees in Sydney, and then an External Network connecting 440 volunteers from across the world. Everyone in the organisation sees campaign updates immediately, which has dramatically transformed internal comms. Yammer provides an easy way to share experiences, challenges, opportunities, relationships with other organizations to make the campaign more efficient and to grow. “It has revolutionised how the campaign is working” Andy Ridley Founder and CEO, Earth Hour.

What level of integration are you seeing Australian organisations apply to Yammer with respect to their other business systems (for example, SharePoint, Salesforce.com)?
We see many of our customers integrating with enterprise systems such as SharePoint, SAP, Salesforce, Netsuite, Spigit and Zendesk to create a single place where all users can connect. Yammer is a system of engagement that helps to bring context to employees working in various knowledge silos in an organisation. Our ability as a cloud service to integrate with on-premise software such as SAP is quite unique in the enterprise space. We also just announced two new integrations with Subscribe-HR and AffinityLive, both Australian-based cloud-based business applications.

What level of awareness do Australian organisations have about Enterprise 2.0 technologies in general?
Australians spend more time on social media sites than any other country in the world, and we are now starting to see the trends from the consumer space move into the enterprise, while the younger generations entering the workforce demand mobile, cloud and social tools from their employers.

Organisations are now recognising technology’s formidable impact on communication and the ability to connect to people and content more efficiently than ever before. We often hear executives talk about the rising expectation for software in the workplace to be as intuitive and easy as software in employees’ personal lives. Companies that want to excite and retain their talent and leadership, especially those in the younger generation, are looking to Enterprise 2.0 technologies to do just that.

Have you encountered any criticism from customers concerned about the fact that Yammer isn’t hosted in Australia?
Yammer’s core focus is to maintain a secure private network architecture to protect customer data, and we work very closely with our clients to ensure they understand our security and compliance tools and standards. Having local customers such as NAB, a big four bank, Suncorp in banking and insurance, and Deloitte Australia in audit and professional services demonstrates the confidence customers have in our platform.

What is Yammer’s plan to increase adoption of its platform in Australia?
With the $85 million round of venture capital funding we raised earlier this year we will be more than doubling our Sales and Customer Success staff in Australia. Today we have 8 staff in Australia, 7 in Melbourne and 1 in Sydney, and by the end of the year we expect that to grow to between 20-25 while serving as the hub for Asia Pacific.

Image credit: Yammer, Ross Hill

Related posts:

1. Local Govt groups abandon Yammer trials
2. Questions & answers: Oracle Australia MD Ian White
3. Questions & answers: Zendesk Australia

interview Long-serving Oracle Australia managing director Ian White (check out his biography here) is one of the most senior figures in Australia’s technology industry, leading the local operations of a company whose technology has been involved at some level in virtually every major Australian IT Project. In this interview, we asked White a series of questions about the company’s local operations, the industry, and his time with the company.

You’ve been leading Oracle Australia and New Zealand for quite a few years now — six and a half by my count. What do you consider have been the most significant events or trends for Oracle locally in that period?

It will be seven years in June. During my tenure here at Oracle Australia, we have announced and delivered Oracle Fusion Applications, perhaps the most ambitious enterprise applications project ever undertaken.

When I took the helm as regional managing director for ANZ, we had just announced our plans to put the very best features from Oracle E-Business Suite, PeopleSoft and JD Edwards into the next generation of applications. Oracle Fusion Applications are built using industry standards-based Java middleware, and integrated with business intelligence, not just process automation. It has been a huge engineering project for us that had to be coded from the ground-up, but I’m extremely proud of what we have achieved with Oracle Fusion Applications – they are truly next-generation – the user experience is arguably modern, consistent, and productive, with Web 2.0, social networking, and collaboration built in.

The other significant milestone was the acquisition of Sun Microsystems, which marked a move from software to a parallel everywhere architecture where hardware and software are engineered to work together. Our engineered systems are optimised to enable enterprise performance levels that are arguably unmatched in the industry. This strategy is bearing fruit and we announced a number of exciting new appliances at Oracle OpenWorld in San Francisco in 2011 including Oracle Big Data Appliance, SPARC SuperCluster T4-4 and Sun ZFS Storage Appliance, Oracle Exalytics In-Memory Machine to name just a few.

What have been the changes in the broader Australian enterprise IT sector that have taken place over that period which you consider the most significant?

The rise of enterprise mobility is empowering organisations to dramatically improve business processes and workforce collaboration. Facilitating remote access to ERP applications is a growing trend and is becoming an immediate priority for organisations. In particular, tablets – such as the iPad – will support enterprises’ mobility initiatives, offering an effective option for field technicians and traveling workers.

At the same time, the volume of data itself has just exploded as unstructured data from social channels, mobile devices and the Internet of Things contribute to the exponential growth of information. IDC estimated the amount of information created and replicated would surpass almost 2 trillion gigabytes in 2011, growing by almost nine times in five years. As a result, we’re seeing unprecedented levels of complexity for IT executives, particularly as they realise that these massive data sets cannot be processed, managed and analysed using traditional systems and methods.

While data management requirements will only increase, organisations will continue to focus on data centre consolidation and building more efficiencies into their data centres, particularly with the introduction of the carbon tax in Australia.

The focus on the cloud has shifted from organisations trying to understand what it is and how it can work for them to deciding which of their workloads can be put into the cloud and what cloud computing model is best for them – private, public or hybrid. Gartner predicts that hybrid – a mix of private and public cloud infrastructures – will become the most popular model. Cloud computing is going to continue to change the way companies do business – whether it’s the provision of services internally to their employees or how they interact and engage with their customers.

What organisations or projects have you most enjoyed working with/on during that period, and why?

All our customers are important to us, but one customer that has the potential to transform many aspects of the average Australian’s daily life is the National Broadband Initiative undertaken by Oracle’s customer, NBN Co. We are proud to make a contribution to the largest infrastructure project in Australian history, which will foster innovation, economic growth and regional leadership. In addition to supporting high speed Internet powered services such as health, e-education, e-business, digital media, e-government, and smart meters, we expect the NBN to further encourage the adoption of cloud computing in general.

The NBN Co deal is also particularly exciting because it’s so rare to work on a greenfields project of that scale and importance, where the entire IT infrastructure, architecture and application portfolio has been designed and built from scratch. Selecting ‘off-the-shelf’ applications with minimum customisations and ‘best of suite’ systems to minimise integration, NBN has been able to quickly deploy a robust IT infrastructure with a focus on the total cost of ownership. This is a prime example of the value and ease of deployment of Oracle’s systems which are engineered to work together.

Which product areas within Oracle’s portfolio is the Australian organisation most focused on right now?

As Big Data and the need to analyse that data is becoming a reality for many data intense organisations, we’re seeing a lot of interest in our Exastack – comprised of Exadata, Exalogic and the latest addition, Exalytics.

In the data centre, advanced grid and virtualisation technologies are taking centre stage, as IT departments pay closer attention to energy efficiencies in carbon conscious economies around the world, and move to a hybrid cloud model. A number of new product releases take advantage of new hardware innovations such as the ground breaking Sun SPARC T4 server, and we’re seeing strong uptake for engineered systems such as Oracle Big Data Appliance, Sun ZFS Storage Appliance and the Oracle Database Appliance, the latter being exclusively marketed through the channel.

We’re also experiencing strong demand for our applications portfolio, with a number of Australian organisations among the early adopters of Oracle Fusion Applications, and our locally hosted CRM On Demand solution is arguably meeting the needs of public sector, financial institutions and other customers who wish to keep data on Australian shores.

With the carbon tax coming into effect later this year, we also anticipate elevated interest in our green house gas accounting software. Oracle Environmental Accounting and Reporting and Oracle’s JD Edwards EnterpriseOne Environmental Accounting and Reporting, based on the acquired assets of Australian company Ndevr, improve the accuracy of sustainability reports from a 20% error margin to 1-2% and enabled mining and construction project managers to generate energy consumption graphs and reports to help make informed decisions on how to reduce carbon emissions.

What product lines are seeing the most uptake at the moment?

See above

Oracle has recently had some early wins from its CRM on Demand product, which was recently launched through an Australia-hosted product. Given that Oracle has historically preferred an on-premise deployment model, can you go through some of the thinking which led to the CRM on Demand launch in Australia (in partnership with Harbour MSP)?

Oracle’s enterprise applications have been available for more than 12 years as SaaS systems. But while the market has been abuzz with news about the potential of the cloud, it is really more an evolution of sorts for most businesses. Early software-as-a-service (SaaS) systems were designed to service a single function or line of business, with little thought to how they would support an organisation’s broader business objectives. Today, the proprietary legacy architectures, immature integration technologies, and limited system footprints of niche SaaS vendors have generated multiple cloud silos that limit the ability of organisations to fully reap the benefits of cloud computing.

It can be argued that standalone SaaS systems found in the market ironically limit businesses rather than liberate them. They establish data silos, fragment business processes, and create integration complexities that introduce new long-term costs and risks and limit worker productivity. These problems can undermine any efficiencies gained through the cloud’s virtualised and shareable infrastructure.

At Oracle, our cloud strategy has always been to allow businesses to mix and match applications and deployment models based on unique business needs. As Oracle’s cloud systems are based on open standards, not a proprietary language, applications and data can easily move back and forth among public, virtual private and private clouds.

Oracle CRM On Demand has been available for more than nine years, and the decision to host Oracle CRM On Demand in a local data centre stems from the demand we’re seeing from our customers for onshore cloud systems. Local regulations around data sovereignty previously hindered some public and financial sector customers from moving ahead with cloud computing. With Oracle CRM On Demand available through the Oracle Data Centre hosted by Harbour MSP, customers have the ability to meet data sovereignty and regulation requirements which apply to them.

How would you characterise the maturity of the local cloud computing market?

Australia leads other Asian Pacific countries in the adoption of cloud computing. According to a recent report from Frost and Sullivan titled State of Cloud Computing in Australia: 2011, 43% of enterprises are now using cloud computing in some form and 41% of IT decision makers agreed that cloud computing will continue to be a top priority.

At the same time, many businesses realise that their data centres still have dedicated silos, where each application runs on its own middleware, database, servers and storage, and hence are moving from these silos to a grid or virtual environment with shared services, dynamic provisioning and standardised configurations or appliances.

The majority of the companies I talk to are engaged in some form of consolidation, though they may be doing this in only a portion of their data centre. Many organisations will further evolve to a self-service private cloud that offers the same flexibility and incremental cost advantages to end users as public clouds, but with less perceived risk and greater assurances of security and accountability. This idea is gaining increasing acceptance among large organisations.

Virtualisation is a key enabler of cloud computing, but the right management tools are also pivotal. Managing all virtual machines and clusters is quite complex, especially with self-service, multitenancy, metering for billing/chargeback and other requirements of cloud computing. To reap the full benefits of cloud computing, organisations need to choose the right management system.

Security is also critical to ensuring business continuity and managing risks for increased efficiency and strategic growth. In fact, security, privacy and regulatory compliance around the adoption of cloud computing technology is a serious concern among organisations today. It is imperative that enterprises deploy security solutions that help to mitigate threats across databases and applications to eliminate the risk of loss of data and ultimately, financial loss.

Oracle has also had some strong wins in the core banking sector (NAB and Suncorp). What is your impression of the level of investment which the banks and other financial services organisations are putting into technology revamps at the moment, and how strong do you believe that investment will be in the medium term (five years and more)?

The banking & finance sector is Australia’s fourth largest industry, and while IT spending might be more subdued in months to come due to the debt crisis in Europe, we still expect the sector to lead in technology investment, especially where it makes a direct impact on the bottom line.

Increased market competition means banks are becoming more customer-centric, to increase customer loyalty and reduce churn. While a better integration of CRM systems with backend data sources is critical to achieving this, technology spend will also further empower frontline channels such as the contact centre and social media. Consumer behaviour has been changing, and these days many Australians prefer to interact with their bank through online and mobile channels. For example, a recent report claimed that St George Bank customers using mobile devices for financial transactions already equal the activity level of 112 physical branches.

Secondly, compliance with new global financial regulation and liquidity requirements will drive investment in real-time analytics and Big Data technologies in the sector. Due to the increased focus on stress testing under Basel III, financial institutions will develop, if they haven’t already done so, a transparent and auditable stress testing process that provides them with the ability to rapidly respond on an on-demand basis to regulatory requirements and market events.

Last but not least, if the Federal Government moves ahead with the introduction of a National Emission Trading Scheme in 2013, as welcomed by the Australian Bankers’ Association, the creation of a carbon market will also be a driver of technology spend.

Oracle’s made some high-profile acquisitions over the past few years (Sun Microsystems, BEA, Hyperion, RightNow). Are you satisfied with how those acquisitions have played out in Australia, in terms of areas such as integrating the product offerings Oracle is taking to the market, the employee bases, customer reaction and so on?

Oracle has a proven track record in integrating acquired entities. Through our acquisition activities, Oracle seeks to strengthen its product offerings, accelerate innovation, meet customer demand more rapidly, and expand partner opportunities. An integral part of Oracle’s mergers and acquisitions philosophy is our consistent commitment to customer service and product support while achieving our financial return objectives and creating value for our shareholders.

What do you see as your priorities over the next calendar year?

We started into the new calendar year from a position of strength, with a truly innovative set of products and systems. I think there are still some misconceptions about Oracle in the market that we’re tackling, such as that we’re an advocate of on-premise applications over cloud computing when in fact we’ve been offering SaaS systems for more than a decade. We have a strong cloud proposition ranging from the infrastructure and platform levels all the way to enterprise and industry applications, which none of our competitors can match in depth and breadth, all based on open standards.

Our partners will continue playing a crucial role in our global and local growth strategy. In Asia Pacific, 80% of our business is driving through and with the channel. With products such as the Oracle Database Appliance we have given our partners a competitive edge in the hotly contested hardware and services market.

Do you have questions which you’d like to see Oracle Australia (or any other vendor) answer? Post them in the comments below and we’ll forward them to the company for a response.

Image credit: Oracle

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feature When it comes to selecting IT platforms and partners to support its business mission, the Federal Government-owned National Broadband Network Company faces a somewhat unique set of problems and opportunities.

When most organisations go through this kind of internal IT infrastructure rollout, they have to do so with the awareness of either a certain degree of legacy, in the case of a large organisation with an established history of operations, or they have to do so with the awareness of starting small, with limited resources that will scale up over time as the organisation grows — in the case of a startup.

But NBN Co faces neither of these issues.

Like many startups, the company has kicked off its operations from scratch — with a blank slate on which to paint a picture of what it may look like in future. There’s no legacy IT environment at NBN Co to worry about; no ageing servers located in branch offices to rationalise; no mainframe applications dating back to the 1990′s which need to be modernised; no datasets in unusual formats which need converting.

However, the company also has very few constraints. With its Federal Government shareholders having committed to ploughing tens of billions of dollars into its operations and a timeline that stretches off for many decades, the company can afford to think large, long and premium — it can afford the best, and to get the best value for its money over the next several decades as it rolls out broadband infrastructure around Australia, it should probably try not to compromise on technology issues. If it does, those same issues will likely come back to bite it a few years down the track.

To many in Australia’s IT industry, it might sound like the perfect problem to have — a mandate to spend a solid budget on the best technology solutions, in a company focused on technology itself. But according to the company’s general manager of enterprise architecture, Bill Barnett (pictured, right), NBN Co’s situation comes with its own set of issues.

“To some degree, it’s easier to find a piece from an existing puzzle than having to draw the puzzle from scratch,” he says in a recent interview.

Some of the questions which NBN Co’s fledgling team of IT executives have faced over the past several years, as it has established and ramped up its operations, go right to heart of the technology decision-making process.

For example, the company has faced the issue of whether to select individual best of breed solution sets and vendors for each piece of that IT puzzle (for example, telecommunications billing and service management, HR, financial, procurement, ERP and CRM systems, unified communications, server hardware and software, business analytics and more), or whether to pick a smaller number of vendors which could offer the company integrated solutions branching across various areas.

It was important that the solutions which NBN Co picked were also not fly by night options — with NBN Co’s long time frames in mind, the companies concerned would need to be along for the long haul. And they would also need to have strong partner ecosystems to aid with systems integration.

However, according to Bartnett and fellow NBN Co staffer Simon Jackson (the company’s general manager for business and commercial platforms), point out, there wasn’t much time to evaluate those products or get them up and running. In many cases, the platforms they chose would have to be up and running before the NBN Co business units were in place that would be using them.

“We stood these suites up before we had functioning business units — certainly before we had business processes,” Barnett says. The products just had to work out of the box — and they had to work quickly.

Exacerbating the situation was the fact that the staff choosing and implementing the solutions were new to NBN Co themselves. NBN Co has made a point of hiring many of the best and most experienced technical staff in Australia’s technology sector. However, if you trawl through the resumes of the hundreds of staff now working at the company (a good way to do this is by searching professional social network LinkedIn), you’ll see most of the company’s staff only have a year or so experience at the fledgling company. If you’ve been at NBN Co for more than a year, you’re a veteran — and if you’ve been there for at least two, you’ve probably already been promoted once.

Barnett says in the early days there was no established problem-solving mechanism for reaching agreement on some technical decisions — and in the “early days”, if a new staff member was hired for a particular skillset, they would need to demonstrate that expertise by using it — and quickly so. Barnett himself has only been at NBN Co since February 2010 (a scant six months after the company was established), and Jackson even less time — since January 2011.

One final factor also complicated NBN Co’s IT infrastructure design process.

Jackson says although in many ways NBN Co’s staff hadn’t anticipated the challenges they would face in designing its IT environment, aside from “very conceptual” industry standard models that it could draw on, it also didn’t want to take too much of an orthodox path in that process.

“We also want to make sure we challenge the model,” he says, noting it would be a “lost opportunity” for NBN Co’s staff to simply replicate existing IT infrastructure models without examining some of their underpinning assumptions. Staff asked themselves what “should” be best practice, he said — going back to basics and examining the business processes they were trying to map.

Some of those decisions were initially relatively easy. In late 2009, shortly after NBN Co was established, it rapidly inked a series of contracts with diversified IT products and services group Data#3 in the areas of procurement, office software, designing and implementing an office LAN/WAN environment and deploying a hosted, managed Microsoft Outlook/Exchange email platform. These were the first building blocks in what would become NBN Co’s internal IT infrastructure.

Others soon followed.

In March 2010 Accenture won the right to provide NBN Co with a hosted HR platform, in November that year NBN Co picked Global Switch’s mammoth Sydney facility as its prime datacentre, shortly after it was announced that the cloud infrastructure consortium consisting of VMware, Cisco and EMC (VCE) would kit out that datacentre, and in March 2011 one of the company’s largest deals was signed, with the announcement that IBM would build NBN Co’s business and operational support systems, in a deal worth some $200 million.

In May that year NBN Co added Citrix desktop virtualisation software to its list, and in June it handed support for the desktop systems which Data#3 rolled out to Japanese vendor Fujitsu.

And — although it was known that Oracle had been key to NBN Co for some time — in January this year it was revealed that Larry Ellison’s team would provide the software supporting NBN Co … with a plethora of Oracle applications ranging from CRM on Demand to E-Business Suite, from Business Intelligence to Identity Management 11g and even Primavera having been bedded in at NBN Co. The US software giant also named NBN Co chief information officer Claire Rawlins as CIO of the year at its OpenWorld confab in San Francisco — and with the complexity and breadth of NBN Co’s Oracle rollout, it’s not hard to see why.

And of course — although it’s outside the scope of this article, being customer-focused telco infrastructure rather than IT gear — none of this is taking into account the mammoth network infrastructure rollout contracts which NBN Co has signed with several handfuls of other firms, in areas such as fibre, wireless and satellite.

Examining why NBN Co picked Oracle for so many of its internal IT systems helps give onlookers an understanding of the way the company’s IT management has been thinking over those past few turbulent years.

Barnett and Jackson describe the vendor as a ‘strategic partner’ whose solutions in many cases can provide the bulk of what NBN Co was looking for. The company didn’t spend a lot of time looking for best of breed products — but rather for integrated suites which would provide 85 percent or more of what it needed — a “broad sweep of functionality”.

“We needed a set of very basic but mature capabilities around HR, finance and procurement,” says Jackson. “Enterprise capabilities which were very robust, highly auditable — and plug and play solutions”. He adds that NBN Co closely examined the vanilla features available from the various suites. “We don’t need to have a differentiating proposition,” he adds — NBN Co being a monopoly player in its space.

The pair won’t say specifically which vendors they examined in the crowded business software space. However, Barnett says, there are obviously “two titans” in the area — by which he likely refers to Oracle and arch-rival SAP — as well as some players “around the edges”.

Jackson says there are places for all options in the business software marketplace — and CIOs “need to make a call themselves” on what’s suitable for their business, whether that be a best of breed vendor or an integrated suite such as that provided by Oracle and SAP. In NBN Co’s case, the suite approach “really matches and supports our strategies”, he says, but for a number of organisations it may be different — they may look at a best of breed requirement instead.

However, even though NBN Co picked a large, well-supported vendor like Oracle to support many of its platforms, that doesn’t mean the US software giant won the deal easily.

Barnett and Jackson say it was important for them to examine Oracle’s (notoriously torturously complex) future development roadmap, and NBN Co is actively working with the software giant on how that roadmap would develop in future. In this light, NBN Co has an obvious and unique ability to contribute towards Oracle’s development plans — for example, helping the company develop its wholesale capabilities. NBN Co will, after all, be one of the world’s first pure wholesale telecommunications monopolies developed from scratch.

In addition, Jackson (pictured, left) says, NBN Co has developed a strong focus on internal identity management. “We’re probably one of the leaders of single sign-on globally,” he says.

Other choices which NBN Co made revolved around the choice of whether to deploy in-house, managed or completely externally hosted platforms. Notably, the company has chosen Oracle’s CRM on Demand platform, which many would consider inferior to a best of breed platform such as Salesforce.com. Oracle isn’t known for its software as a service capabilities, but recently established a CRM on Demand node with local company Harbour MSP, which also uses the Global Switch datacentre in Pyrmont, Sydney. And of course, its email platform is also remotely hosted.

“Buy versus rent is a really interesting conversation,” says Barnett. “The fact that you can take on a product with no datacentre footprint, no investment in your technical staff. I think the business case for that is incredibly compelling. I think we’re finding that the options in the market are getting rapidly more mature.”

Of course, there are still “issues around where the data is housed, and where the processing is occurring” — issues which would likely prevent NBN Co from hosting too much of its data offshore, as a quasi-government organisation. However it’s not too hard to see the company shifting some lower-priority workloads off to other partners at some stage in the future — particularly as it has had a highly virtualised IT infrastructure right from the start.

At the end of the day, NBN Co’s internal IT systems are an evolving beast. With some unique challenges — dealing with massive and rapid growth, dealing with a brand new workforce, and even dealing with a fairly unique business model — NBN Co’s is always going to be a unique IT environment which will require both orthodox and outside the box thinking.

Looming over everything, of course, is the prospect that the project may be dramatically modified if the Coalition wins the next Federal Election and changes the project’s mission — and NBN Co itself — drastically. Those who work at NBN Co are aware — and particularly so after the last knife-edge election in 2010 — that much of what they do may be for nought in a few years.

But it’s still early days for the organisation yet, and speaking to its IT executives, it’s hard not to get a sense that some great work is being done. There’s a huge sense of optimism in the air, and an appetite for facing technical challenges head-on. Apple founder Steve Jobs might have found a lot to like at NBN Co — in many ways, it appears to be a company of “A players” — the elite.

“The team that’s here, pretty much, everybody self-selected to come to this kind of environment,” says Barnett. “You don’t have anyone who’s trying to coast along with the organisation. I don’t want to sound like it’s Kumbaya … but we’re really excited about working together to get the best outcome for the business.” And in any business, that’s what building internal IT infrastructure should fundamentally be all about.

Image credit: NBN Co, Bill Barnett and Simon Jackson

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feature It’s May 2011, and Australia’s whole IT industry is buzzing, with the annual CeBIT trade fair in full swing. Tens of thousands of attendees are examining the hundreds of displays in the huge cavern of the Sydney Exhibition Centre, where the crème de la crème of Australia’s technology sector is proclaiming their wares.

However, despite the carnival atmosphere and the panopoly of offerings to be examined, many of Australia’s technology journalists are crammed into a small lecture room off to the side of the main hall, listening to one man.

The reason? This man is one of the most important executives in Australia’s technology sector. With a technology budget stretching into the billions over time and an in-house staff of thousands, Department of Human Services chief information officer John Wadeson is the centre of attention. And he’s retiring. Just a few months earlier the long-serving public servant confirmed he was on his way out. Australia’s technology press are here to witness one of his last public appearances.

Wadeson has left behind him a colossal task for his successors. The CIO used to lead Centrelink’s IT division, itself one of the largest IT end user organisations in the country. But since late 2010 he’s also been in charge of the massive IT consolidation going on as Centrelink, along with other agencies such as Medicare, are consolidated into the new DHS super-agency. In that role Wadeson has overseen the commencement of one of the nation’s largest technology integration projects — an initiative which still has many years to run.

But the humble Wadeson doesn’t predominantly speak about that project. Instead, his voice shakes with passion as he draws a vivid picture of how Centrelink used a room full of laptop PCs and a 3G mobile broadband connection to distribute close to $1 billion worth support payments during the recent Queensland floods. It’s clear the public servant is devoted to getting real outcomes for real Australians — and, after all, isn’t that what public service is all about?

Interviewing Wadeson’s successor Gary Sterrenberg (pictured, right) in a DHS office in downtown Sydney earlier this year, what struck me about the executive was how strongly this passion appears to have been passed along.

Sterrenberg doesn’t have a background in the public service. Instead, the CIO has a staunch history in the private sector, ranging from six years at global petroleum giant Shell to a position as the European IT director for advertising group McCann. The executive’s past half-decade has been spent at ANZ Bank, where he ended up being the bank’s CIO of its Australian operations. He also spent a year and a half at rival NAB. And, fitting for an IT executive of his stature, our conversation ranges across many different areas, from IT infrastructure upgrades to how technology can be aligned with the business, from Microsoft to SAP to Bring Your Own Device and back again.

However, I was surprised during our conversation about many of Wadeson’s favourite themes ended up being the focus.

When I asked Sterrenberg, for example, what technology he’s most excited about over the next five years, he doesn’t mention the magic acronyms — CRM, ERP, PC, UC or BI. Instead, he talks about social media. “For us, social media is going to be a way for us to reach into communities earlier,” he says. DHS has made strides into social media — with general manager Hank Jongen being the department’s official and highly visible Twitter point of contact for the public — but Sterrenberg hints at bigger ambitions for its social media approach.

For Sterrenberg, social media offers an opportunity for DHS, whose mandate is broadly to implement welfare programs, to touch base with Australians when the crux points in their lives occur, before their lives go off the rails. “If I understand that a person is going to lose their job, which is a bad situation … if you can provide the systems at the first step and bring the person back into the workforce using the skills that our teams have, that is the best outcome for the customer,” he says.

Jongen points out that sometimes people’s cries for help will come first via mediums such as Facebook, referring to a recent case he had seen. “There was sufficient data available via social media to know there was a problem, and the right people intervening could have solved it,” he said.

The way large organisations use social media is an evolving field, and it can backfire, as organisations such as Coles and Woolworths have recently found. Sterrenberg acknowledges it’s an area of emerging technology, and there are a lot of discussions at the moment in communities as to what is acceptable and not acceptable. However, in general the area is seeing a lot of interest, not only in Australia, but also in countries such as India, Canada and the UK — countries where DHS has links with similar government agencies.

There are other areas which Sterrenberg talks passionately about in our conversation, and as social media does, they tend to revolve around directly serving DHS’ end customers — typically Australians receiving some form of welfare through Medicare or Centrelink. For example, he talks about providing diverse ways in which Australians can get through to the agency’s support staff. Its voice telephony system is pretty advanced at the moment, but the CIO is interested in a more multi-faceted approach — using social media, images, video. Mobility comes into it as well, with Sterrenberg touching on the major banks’ use of mobile phone apps to draw their customers into Internet banking services, and text messages for easy contact with customers.

As with Wadeson, so much of what Sterrenberg talks about when given free rein to discuss his ideas revolves around meeting the needs of DHS’ customers better. And not just the sorts of internal business ‘customers’ which CIOs like to talk about alignment with — but real Australians, who depend on the agency.

Enterprise IT on a grand scale
However, as much as every CIO likes to try and focus on building innovative solutions to meet their business’ needs, a substantial part of their work is also focused around basic building blocks of IT infrastructure. And in this area, Sterrenberg has a doozy of a job ahead of him. The right kind of CIO might envy him the task — but many would not.

DHS itself was formed in December 2009, when the then-Rudd Labor Federal Government announced a colossal shake-up of the welfare portions of its agencies, merging Medicare, Centrelink, the Child Support Agency, Australian Hearing and CRS Australia into a new mega-agency. At the time, Wadeson was appointed deputy secretary of ICT infrastructure and given a massive task: Integrating the various departments’ technology assets.

In June 2010, Wadeson revealed the full scope of that project. It would touch virtually every aspect of DHS’ technology systems — integrating HR and finance systems, consolidating datacentres, rolling out a common desktop based on Windows 7, migrating off various email systems including Lotus Notes and onto Microsoft’s Outlook/Exchange, going to tender for a raft of new contracts and more. And in May 2011, the cost of that technology integration was revealed in that year’s Federal Budget — $373.6 million, as well as other funding for related areas.

And the integration cannot go wrong. Talking about DHS, Sterrenberg rattles off some incredible statistics — five million online Centrelink customers, $16.8 billion worth of Medicare payments, nine hundred branch offices. “By any scale, or any comparisonal benchmark, it is a big operation,” he says. “It’s a huge organisation, both in terms of the breadth of services that it has and the depth of how far down it goes.”

The good news is that the shop was in pretty good hands when Sterrenberg arrived. Although the CIO didn’t say this, it is apparent that Wadeson’s strong governance of Centrelink’s ICT operations and much of his team has formed the new core of DHS’ ICT operations, with lessons from Wadeson’s long tenure being cross-pollinated into the rest of the organisation.

Sterrenberg says one of his first actions upon joining DHS was to sit down with Wadeson and understand the CIO’s thinking. Then the next thirty days were all about meeting people within the organisation and understanding what was in place. “What I found was there was a lot of good foundation work that had been done,” Sterrenberg says. “John and the crew had set up some really good strategies, particularly on the infrastructure part, so there were clearly some really world-class infrastructure strategies that were in place.

And the new merged DHS team has already notched up some early wins in terms of the big IT integration piece, having integrated a SAP HR platform across its merged operations. On the desktop, in the period from October to December 2011, DHS deployed five hundred desktops using its new common desktop architecture based on Windows 7 and Outlook. “By June, we will roll out another ten thousand, and then by the end of the year, another fifteen thousand onto that,” Sterrenberg says.

Work is also proceeding on consolidating DHS’ fourteen datacentres down to two, a massive $500m+ telecommunications tender process is being worked though, the mainframes are being looked at (Centrelink is one of Australia’s largest users of mainframes, due to the massive financial data it processes — similar to a major bank), and there’s a sledload of smaller projects under way as well. Another major initiative will see DHS move away from large outsourcing deals with HP and IBM, bringing more services in-house.

But Sterrenberg says the ball is rolling. “From an execution point of view we have got momentum, and now it is just about focus and a disciplined approach,” he says. “Lots of hurdles as you can imagine, but we are tracking as well as can be — well to our current expectations on our side.”

DHS’s technology environment might be changing rapidly. But don’t expect to see anything too radical from the department any time soon. Asked about the growing trend towards employees bringing their own equipment into work, Sterrenberg says it’s not something DHS will be looking at in the short term. “Definitely for the next two or three years I don’t think so,” he says.

In terms of the BYOD trend and other current issues such Australia’s enterprise IT community is currently debating, such as cloud computing, Sterrenberg says he believes the vendor community needs to do more to make their case. “I think we need to see a lot more from the vendor community to ensure those offers and get the security right and all that sort of stuff before we can deploy it,” he says — noting DHS takes its responsibilities towards customers’ privacy very seriously — and there need to be examples that such new technologies were as robust as they needed to be.

Welcome to the bureaucracy
“Momentum” isn’t a word one often hears applied to Federal Government departments and agencies — with those working inside the public sector and those dealing with it often finding it hard to get the bureaucracy moving. In this case, it could also be expected that Sterrenberg — who hasn’t worked in the public sector before, according to his LinkedIn profile, might have an amount of difficulty adjusting to an organisation with a fundamentally different culture than that found in the usually nimbler financial services sctor.

However, the CIO says while there are differences between the two environments, there are also many things which are the same.

The key difference in working in the public sector, he says, is that there is a heightened level of scrutiny and governance, from “a broader stakeholder group”. “It’s not just the stakeholders that you’re working with,” he says, “it’s many others, including the media and others, who have an interest in how departments are using technology to drive and improve service. So that level of transparency is very, very different.” Sterrenberg’s immediate past employer, ANZ Bank, is a case in point, with the bank only very rarely giving briefings over the past few years on its use of technology. In comparison, substantially more is known about the IT projects and contracts at DHS.

However, Sterrenberg says, in terms of the level of what he describes as “process bureaucracy”, all big corporates have it — even going as far back as the turn of the decade up until 2005, when he worked at energy giant Shell. “The level is no different or worse,” he says, but some additional factors come in — such as the need to think differently about how services developed by DHS could be deployed elsewhere across the public sector.

“Again, it just makes the stakeholder group a lot larger,” the CIO says. “It does tend to take a little bit more time and we just have to make sure we have covered everybody’s interest.”

And Sterrenberg is clearly already aware of some of the more complex dynamics at play. One of the big issues across Australia’s public sector at the moment is the fact that State Governments are currently suffering a very large crisis of confidence when it comes to their ability to deliver technology projects. A series of damning audit reports in Queensland and Victoria over the past several years have called into question the ability of those states to deliver major ICT projects at all.

Sterrenberg — who has only been in his DHS role since October — is already aware of a quarterly session run between human services departments across various jurisdictions, with a view to sharing knowledge. “That happens quarterly, has for many years and will continue,” he says.

At the end of the day, the role of chief information officer at the Department of Human Services is not an easy or traditional one. The executive who holds it must straddle the needs of traditional enterprise IT infrastructure outcomes along with more business-focused needs such as engaging with Australians through new mediums such as social media. And occasionally this fickle continent will throw them a complete curveball, such as the Queensland floods. Amongst all of this walks deep issues such as technology governance and dealing with the bureaucracy and political sphere which surrounds the department.

Sterrenberg’s predecessor John Wadeson perhaps summed it up best in this June 2011 video interview with ZDNet.com.au, filmed on the sidelines of CeBIT in 2011. At the time, Wadeson was asked what advice he would pass on to his successor, whoever that may be. “IT needs a voice,” he said. “IT needs to be able to be in the senior forums of any organisation, and it does have its own voice. It’s not just some tool, as some people like to call it.”

In Sterrenberg, DHS appears to have found that voice. With much of Wadeson’s passion for the welfare portfolio, much of his humble demeanour, but also much of his underlying steel, in person there is no doubt the CIO knows what his role is and relishes the chance to get cracking at it. I’m sure I speak for many in Australia’s technology sector when I say that it will be fascinating to see what he can deliver.

For further reading about Gary Sterrenberg and his work at Human Services, we recommend you check out these articles by ZDNet.com.au and iTNews (here and here).

Image credit: Amanda Slater, Creative Commons

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analysis Several weeks ago the Victorian Ombudsman handed down one of the most damning assessments of public sector IT governance in Australia’s history, noting total cost over-runs of $1.44 billion, extensive delays and a general failure to actually deliver on stated aims in 10 major IT projects carried out by the state government over the past half-decade.

Shortly after the report landed, Delimiter published an analysis of what the state should avoid doing next. Gershon-style reviews, super-chief information officers being flown in to take charge, focusing on shifting everything into IT shared services centres; analysts agreed that these sorts of quick fix solutions would just lead to more of the same problems that Victoria has already been experiencing.

With these obvious wrong turns out of the way, the focus today turns to some positive thinking. What are the steps which the Victorian State Government should be taking decisively forward at this point? Where can it look to for inspiration and a roadmap to better IT governance?

Accountability
When we asked three leading Australian IT governance experts what Victoria should do next, one unanimous answer came back clearly and straight away: focus on accountability.

Steve Hodgkinson, a Melbourne-based research director with analyst firm Ovum and a former whole of government deputy CIO for the Victorian Government, issued a research note in the wake of the publication of the Ombudsman’s report noting that accountability in the “devolved structure” of government rests with department and agency senior executives.

“The solution should be approached from the perspective of ensuring that departmental secretaries, deputy secretaries and agency CEOs are paying adequate attention,” Hodgkinson wrote in the paper.
When such executives were paying attention, they would more carefully consider which projects were mobilised relative to their capacity to deliver, how projects were resourced and managed and how critical decisions were made, the analyst added.

Scott Stewart, a research director with Queensland-based firm Longhaus, agreed with Hodgkinson on the issue of accountability. He highlighted a project which then-US whole of government chief information officer Vivek Kundra had instigated in the first several years of the Obama administration which created an 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.

Although Kundra is no longer with the US Government, the IT dashboard lives on. And in fact, the technology behind it lives on and is publicly available so that other jurisdictions can adopt it. There is literally nothing stopping the Victorian Government from downloading the code to do so — a living example of the fact that public sector jurisdictions usually don’t compete with each other and have nothing to lose by sharing knowledge and technology.

Steve Bittinger, a government-focused research director with Gartner, also highlighted the IT Dashboard as a useful model for Victoria to adopt.

“The previous US federal government CIO, Vivek Kundra, focused substantial attention on this issue during his tenure. Notably, he established the IT Dashboard which shows status and spending information about all major US federal government projects. This is a level of transparency that we don’t yet see in Australia,” the analyst said.

Hodgkinson acknowledged that some would criticise this kind of accountability.

“At this point, some readers will react that senior executives in departments and agencies already face impossible burdens of accountability … so it is unrealistic to expect them to do more,” he wrote in his research note. “Our view, however, is that the sums of money involved in major ICT-enabled projects and their centrality to preparing departments and agencies to face future demands means that fixing this problem is now not optional.”

Re-pitching IT projects
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.

“It actually had an immediate effect,” says Longhaus’ Stewart, noting the sessions could be simple one hour sessions, but could take weeks for the departments concerned to prepare for. And if a project wasn’t re-approved through the process, it could have dramatic and decisive consequences for those running the 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. In one example, Stewart says, three separate agencies came to Kundra’s office with smartcard projects. Two of the projects ended up being cancelled and a decision was made to have one single smartcard project across government.

On the website of the US Government of the CIO, the Government credits the two methodologies — the IT Dashboard and the TechStat system with over $3 billion in cost reductions. It’s likely the decisive decision-making style the systems brought in also had a wider ‘halo’ effect on the accountability and transparency of government IT projects in general.

After all, who would want to be hauled up before Kundra and his team for an intense one-hour TechStat grilling?

Ovum’s Hodgkinson, in his note, promotes a similar system for the Victorian Government. The Ombudsman recommended that a new sub-committee of Cabinet be created to approve and review the progress of ICT-enabled projects within a state. A similar committee existed briefly in 2004/2005. Hodgkinson noted that the challenge in making this sort of system work in practice was that it was difficult to sustain the interest of Cabinet Ministers in “such low-level operational matters”.

An alternative, he said, would be for the sub-committee to only meet twice a year, and for it to focus on accountability — instead of quarterly reporting detail.

“The question that the sub-committee should ask of each secretary, deputy secretary and CEO in charge of a major ICT-enabled project is simply this: ‘Will the project be completed as per the business case and approved project plan, benefit realisation plan and funding budget?’”

If the answer was no, Hodgkinson said, then proposals should be discussed and the project must be revised and re-approved (Kundra-style) or possibly cancelled. “Disappointing the sub-committee should be very damaging for executive bonus proposals,” he wrote.

“If department secretaries and agency CEOs were expected to provide unequivocal assurance that projects were on track to a sub-committee of Cabinet, then they would actually need to know that the projects were, in fact, on track,” he added. “The knowledge of this accountability would flow through into the way decisions were made to propose projects for funding, to set up projects for success and to ensure that the right decisions are made during implementation. The result would be for focus and accountability to devolve downwards from the top.”

Furthermore, Hodgkinson added, if there was any significant change in the chain of command for an ICT project, then the project planning should have to be re-endorsed afterwards by that department’s secretary.

“If accountability is a firm expectation,” he wrote, “then executives will think twice before accepting responsibility for a poorly planned, badly scoped, under-funded, under-resourced project expected to be delivered in unrealistic timeframes. It will no longer be an excuse that the project is just stuck with a set of bad decisions made by people who have already left the building.”

Gartner’s Bittinger points out that the Federal Government already uses the P3M3 project maturity assessment model developed by the UK Government to assess projects and agency capabilities in Canberra. Perhaps this is the sort of framework which could tie in well with the accountability and rapid evaluation suggestions discussed by the other analysts. Hodgkinson also suggested looking at the areas of investment management frameworks, so-called ‘Gateway’ reviews and best practice guidelines, although he noted that the problem is not the availability of good ideas and tools … “it is the appetite of department and agency senior executives to put them into action.”

Master architect groups and skills
One idea which Longhaus managing director Peter Carr is particularly keen on is the establishment of a central architecture group to guide cross-government IT architecture decisions. This would not be a ‘super-CIO’ group, but rather one focused purely on architecture. Major Federal Government departments such as Defence are known to have a great deal of focus on key architecture decisions.
Carr draws an analogy between town planning and IT architecture development, noting that for every major city council, there is a central town planner.

“They are the master architect,” he says. “That role has key clout in terms of the master plan of the city and all town planners must flow through that. The central IT groups; they’ve been unable to achieve that same level of central governance and architectural standard for a master plan for any of this stuff. There’s no true master plan.”

Carr says there is no escaping the fact that there is “tremendous, tremendous complexity” inside the systems of a major government department, but that he doesn’t believe that kind of ‘town planning’ capacity even exists at the agency level — let along across government.

The result is that different agencies procure different solutions for IT projects which can actually be quite similar — such as the situation where multiple smartcard projects exist within the Queensland Government, just as they did in the US before Kundra stepped in.

Carr points out that if each of Australia’s states wanted to replace their driver’s licence systems, it would end up costing something like over a billion dollars in total. However, he said, if the project was architected centrally a solution could likely be built for several hundred million.

This lack of central IT architecture planning results in situations where eight agency CIOs are looking to buy a case management system individually, instead of one coordinating body saying we want a scalable case management solution across government. And that, Stewart says, plays into the hands of vendors, who would rather sell the same solution eight times than once.

The Humane Genome Project had been able to eventually succeed in the gigantic task of mapping the human genome, Carr said. “Most organisations can’t even map their IT systems or services. We’re fundamentally failing. The portfolio view, a central architecture group: We don’t have that in IT. We should have it.”

There’s also another area which Carr believes the Victorian Government can make substantial headway; on skills.

In Delimiter’s last article on this subject, Carr put forth his view that there simply isn’t enough skilled IT labor resources in Australia to go around; especially at the price which Governments are willing to pay for it — and even if you count the resources of IT services companies in the mix. Carr says one positive step forward Victoria could take is to stop ignoring the opportunity to leverage offshored resources to get its jobs done.

“Governments have largely ignored the whole opportunity to leverage offshoring,” said Carr. “They’re the first to complain when they get charged $4,000 a day by IBM or Accenture to have project managers sitting around a meeting table three times a week. But the fact, is, IBM and Accenture will continue to charge $4,000 a day while there’s a model for it.”

“Governments need to fundamentally change the underlying mechanism for it.”

Virtually every major Australian organisation uses offshored resources of some kind, especially when it comes to technology. Every major bank has partnerships with offshoring companies like Infosys, Tata, Wipro or even traditional IT outsources like IBM or HP, which also operate their own facilities in low-cost countries such as India or China. Some, such as ANZ Bank, even operate their own internal facilities in such countries, while offshored call centres are extremely standard practice in 2011.

Up until now, Australian governments have been very reluctant to use offshore resources, due to issues such as data sovereignty, the need to protect the privacy of citizens’ data and the political unsightliness of pushing jobs offshore. However, the financial services sector is also subject to harsh regulatory controls in such areas has been able to deal with many of the same issues by using technology like virtualised desktops which lets data and systems remain in Australia but work be conducted on them internationally.

It may be time Australian Governments started looking at similar options; the times are certainly desperate enough.

The cloud and innovation
One significant aspect of Hodgkinson’s analysis of the way forward for Victoria relates to the need to change the way government technologists think about technology in general. In his research note, the analyst noted that the past half-decade has seen the IT industry experience “revolutionary changes” driven by new technology in areas such as mobility, social networking, cloud computing and advanced analytics.

“The ‘art of the possible’ has significantly developed and there are now many more options for how a policy or service delivery innovation might be addressed in ways that are faster, better, less costly and less risky than the traditional major ICT-enabled project approach,” writes Hodgkinson.

“The paradox is that governments typically tend to regard new solution approaches such as cloud computing as risky because they are unfamiliar … while the reality is that the familiar solution approaches of major ICT-enabled projects too often turn out to be the biggest risk of all when they waste time and money and totally fail to meet business needs.” Hodgkinson points out that some Victorian departments already have hands-on experience with public cloud computing platforms — which have proven “highly effective” as a better alternative to more traditional ICT project approaches. However, new thinking will be required to tap into these new paradigms.

“As the proverb goes, when you have a hammer, everything looks like a nail,” concluded Hodgkinson. “The Ombudsman’s report has highlighted that the hammer of major ICT-enabled projects is failing. While the faulty hammer needs to be mended, we also need to accept that there are many alternative ways to meet business needs which don’t necessarily require the hammer at all.”

There’s no doubt Victoria’s in a difficult spot. However, there is also no doubt that a way forward exists for the state when it comes to remediating its technology governance. Some positive thinking comes from international jurisdictions such as the US and UK, where governments are grappling with extremely similar issues to Australia’s states. And some thinking comes from within Australia, where the private sector has already conquered many of the same problems which Victoria is facing. Major ICT projects are increasingly running on schedule in the banking, retail and telecommunications sectors — industries the public sector could learn from.

Things may seem dire for Victoria’s public sector technologists at this juncture. But the illness can be addressed through a combination of emergency surgery and the long and patient application of the right techniques. Stay tuned for our next report shortly profiling the key players who will be responsible for administering the medicine.

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feature This time last year, there were exactly zero music subscription services available in Australia. Zilch. Nada. Niente. We’d certainly flirted with them in the past. There was the Nokia ‘Comes with Music’ service that was tied to a couple of Nokia smartphones – still available, actually, if you’ve managed to hold onto those phones. Vodafone dabbled in the area as well a few years back MusicStation – a subscriber-only service that then quietly disappeared without so much as a cake and farewell party.

But things have ramped up in the past couple of months surprisingly quickly, and we now have no less than five music subscription services available. Sony was the first on the scene with not one but two services launched back in February: its mainstream Music Unlimited service, and the Anubis.fm service designed specifically for the Sonos music system. Samsung jumped on the bandwagon in October with the Samsung Music Hub, BlackBerry followed suit with BBM Music in early November, and the long-awaited Zune Pass from Microsoft mid-November. Anubis.fm has also since been renamed to Songl, had its ownership transferred to both Sony Music and Universal Music, and is now available on a variety of devices, not just Sonos music systems.

The big brother of music streaming services, Spotify, hasn’t launched yet in Australia, but the company is ramping up its Australian staff, and we expect it to make an announcement about an Australian launch shortly. We’ll take a look at Spotify when it launches.

The nitty gritty
Music streaming: it’s all pretty much the same, right? Not so fast. The services that each company has set up are all different, between the number of tracks available, the devices that you can access them on, pricing models and what you can do with the music once you’ve got it. There’s no simple answer as to which service is the best – it will largely depend on whether you own devices that are compatible with the service and where you do the majority of your music listening.

All of the services include music from the big four music labels (Sony Music, Universal Music, Warner Music, and EMI Music) as well as independent labels, but that doesn’t mean you’ll find exactly the same tracks in each service. Microsoft’s Zune Pass is ahead on that count with 13 million tracks, followed by Music Unlimited and BBM Music with 10 million tracks, Songl with four million tracks, and Samsung Music Hub with three million tracks.

A straightforward all-you-can-eat model is the most popular method, employed by Music Unlimited, Samsung Music Hub, Zune Pass and Songl, each of which also offers cloud-based access, mobile apps, and the ability to use the service on specific home entertainment devices. Zune Pass is a little different in that you download tracks to play when using the Zune Music Player desktop software or a Windows Phone rather than streaming them, although the Xbox 360 and web clients use the conventional streaming method.

BBM Music is more different still. Instead of the musical buffet that other services offer, BBM Music limits you to 50 songs only. A miniscule portion compared to the millions of tracks you can access on the other services, but the trick is that you can access all the music that your BBM Music friends have selected as well. This puts a social spin on the music streaming model by letting you share only your favourite tunes, and it’s an innovative way of discovering new music. Rather than just dump you at the front page and let you pick and choose your music – a method that usually results in you listening to the same tracks you’re already familiar with – it basically forces you to sample the music that other users have recommended, turning the entire community into de facto music curators – and potentially broadening your musical horizons in the process.

Music Unlimited offers the broadest access, letting you stream music from any Android smartphone or tablet, a desktop browser, the PlayStation 3, and any of Sony’s Internet-connected home entertainment devices such as TVs, Blu-ray players and home theatre systems. Songl is the dark horse in second place, supporting iPhone and Android phones, as well as the Sonos music system and desktop web browsers. Zune Pass follows close behind, with access through the Xbox 360, Windows Phones, Windows computers and desktop web browsers. Samsung Music Hub is currently available to Galaxy smartphones and tablets only, although mid-December will see it launch on desktop web browsers and Samsung Internet-connected home entertainment devices as well. BBM Music comes in dead last with access only available on BlackBerry smartphones.

So how much can you expect to pay for all of this audio goodness? Music Unlimited offers a two tiered system: the basic membership for $4.99 a month lets you stream music by ‘channels’ (categorised by genre, era and mood), while the the premium $12.99 a month membership lets you pick and choose everything you play. Samsung Music Hub and Songl offer tiered approaches as well, although these are based on device. For Samsung Music Hub, $9.99 a month (also available at $54.99 for six months and $99.99 for a year) lets you access the service on one Galaxy smartphone or tablet, and $14.99 a month (also available at $79.99 for six months and $149.99 for a year) lets you access it on four Samsung compatible products and a web browser.

Songl offers a basic membership for $8.99 a month that lets you stream from a desktop browser, and a premium membership for $12.99 a month adds streaming to iPhone, Android and Sonos, along with enhanced features like streaming at 320kbps and off-line caching. Zune Pass and BBM Music offer a simpler approaches of a single monthly fee at $11.99 (or $119.90 a year) and $5.99 a month respectively.

BBM Music
We’ve got to hand it to RIM for coming up with a service that’s completely different to anyone else’s. Whether this makes it any more appealing is the question. BBM Music has two strikes against it: the amount of music you can access is far more limited; and access is restricted to BlackBerry users only. But neither of these shortcomings are as bad as they first appear. As the success of the Apple iPod Shuffle has proven, sometimes having less access to music actually improves the experience, as you aren’t constantly hunting through available tracks to find something to play, and can therefore spend more time playing and appreciating the music you do have.

The fact that you can play all of the music that your friends have added as well provides an easy way to discover new and recommended music. We found that having to select only 50 tracks – a process we actually enjoyed – resulted in a brilliant playlist that we were more than happy to play on a daily basis. Plus, you’re able to swap out up to 25 tracks each month.

The restriction to BlackBerrys only is a double-edged sword: it means you can only listen to your music on your BlackBerry (no web or home entertainment device access) and it also means that if you don’t know many other BlackBerry users, your options for expanding your music library are limited. But the latter doesn’t necessarily prevent you from adding lots of contacts. If you know at least one other person using it (the big if!), you can then add all of their contacts – they just may not be people you know (nor is there any way to see their music before adding them). What you’ll find, as we did, is that you really only need to add one or two contacts before other people find you and start adding you, and you can end up with dozens of BBM Music requests with very little effort.

The BBM Music app is basic but straightforward, with tabs along the tab for moving between the different sections. It offers most of the features you’d want in a music service like playlists (you can include tracks from contacts), off-line access, and the ability to see recommendations based on what you’re currently playing. For BlackBerry users, there are certainly worse ways to spend $5.99 a month, and it’s not as though you’re spoilt for choice when it comes to compatible music services anyway. At the very least, it’s worth checking out the free 30-day trial.

Music Hub
There’s a good chance that most of your music listening is done on a mobile device, and if it happens to be a Samsung Galaxy smartphone or tablet, then you’ve got the privilege of having access to the cheapest unlimited music streaming service for mobile devices at $9.99 a month (with discounts for 6- and 12-month subscriptions). This is a single-device license only (a premium subscription for more devices is available), but if you’ve got a high-end Galaxy smartphone or tablet, you can take advantage of the HDMI output to play music through a HDTV anyway.

The Music Hub app is easy enough to use, with tabs across the top for navigation and a handy “Discover” section where you can browse through top 40 tracks and albums, new releases, popular artists, genres, and collections (a selection of pre-made playlists). But there are a few quirks in the app’s design that prevent it from being user-friendly. For starters, you can’t just play any song that you find – you have to add it to a playlist first. Nor do you get a choice as to which playlist the song is added to or get an option to create a new playlist on the fly – it’ll automatically add it to whatever playlist is currently loaded.

This means that if you want to play a song but not add it to the default playlist (for reasons we’ll get to in a sec), you’ll first need to go to the Playlists tab, create a new playlist, then load that playlist, navigate back to the song, and tap the add button – and then you can finally play it. The reason you wouldn’t want to add it to the default playlist is because it’s the only one that you can’t cache for off-line listening – any other playlists you create offer the option of syncing the playlist to your device, with up to 500 tracks supported.

The other strange thing about Music Hub is that it doesn’t have a Now Playing screen. Instead, there’s a prevalent music playback bar at the bottom of the screen, and a little arrow that you can tap on to navigate through thumbnails of all the other tracks in the playlist. Music discovery options are limited – there’s no ‘view similar artists’ option or even the ability to see other albums and tracks by the same artist. One feature we do like the option to create a mix from the ‘Popular Artists’ section; this builds a random 10-track sampler of music from that artist that you can then add to the currently loaded playlist (again, an option to create a new playlist here would’ve made more sense).

The app is a little buggy – we got a couple of force close errors while we were using it – but Samsung has already updated it three times since we first started using it a couple of months ago, so we’re confident that all the kinks will be worked out fairly soon. For ten dollars a month (for the basic membership), the service is good, but the app could be a lot better, and the catalogue is smaller than any of the others at only three million tracks.

Songl
It’s nowhere near as high profile as the offerings from other vendors, but Songl has the distinction of being the only Aussie unlimited music streaming service that’s currently available on the iPhone. Add to that it’s availability on Android as well as the Sonos music system and a desktop web browser, and you’ve got a service that’s accessible on a surprisingly large number of devices. If you don’t need mobile or Sonos access, Songl also offers the cheapest unlimited streaming service with its basic $8.99 membership that can be accessed from a desktop browser only.

Songl offers the most straightforward and easiest-to-use interface of all the services, eschewing flashy graphics for simple text-based lists. The only downside on both the mobile and Sonos clients is that the search function requires you to specify whether you’re searching for artists, albums or track names, and this makes searching harder than it needs to be. Say you’re looking for a particular track; instead of putting both the track name and artist name into the search field (which most of the other services let you do), the fastest avenue in Songl would be to search by artist.

A “Top Tracks” option is available for each artist that lists their top 100 tracks, but if the track you’re looking for isn’t there, you’ll then have to navigate by album, which is problematic if you don’t know which album the track is in and the artist has an extensive discography. But we do like the feature that shows you similar artists to the one you’ve searched for, and we like the fact that Songl will automatically play all the songs in the list of whatever you’re browsing through, whether it’s the top 100 tracks of a particular artist, a genre playlist or the Top Tracks from the main menu.

The Songl app on Android (we didn’t test the iOS version) has an annoying habit of automatically muting the speaker whenever we load a new playlist, but apart from that, it seemed a lot more stable than the other Android music players we tested. A cool feature in both the iOS and Android clients is the automatic off-line caching of tracks (up to 1000) once you’ve played the song for longer than 30 seconds, and the Android client has the added bonus of a manual caching feature. The Sonos interface has an extra feature as well by way of a Chart History category where you can browse through the top songs and albums by year as well as the number 1 tracks and albums on your birthday across the years.

The dated search mechanism is annoying, and the catalogue limited to four million tracks, but apart from that, Songl is a surprisingly polished service that’s really easy to use, offers lots of cool features, and has wide availability across mobile, desktop and home entertainment.

Zune Pass
Zune Pass (pictured at the top of this article) is unique in a couple of ways. First, it’s the only service that lets you buy music tracks as well as stream them (although you’ll have to wrap your head around paying for things using Microsoft Points instead of a “real” currency). Second, it’s the only service where you download tracks completely on the Windows Phone and Zune Music Player clients rather than stream them (the Xbox 360 and web interface use the standard streaming model). But the biggest distinction it has from the other music services is that it has a beautiful user interface, particularly the Windows Phone and Xbox 360 clients, which feature stunning full-screen graphics of the artist in the Now Playing screen, as well as slick menu transitions when you’re navigating through the catalogue and your music library.

Just because it’s pretty, however, it doesn’t mean that it’s easy to use. The Zune Pass worked at first in the Zune Music Player in Windows, but overnight it started throwing up usage right errors whenever we tried to play anything. If you’re downloading music straight to a Windows Phone, the fact that you have to download music in a separate app (Marketplace) to the music player is another source for confusion, as is the seeming lack of any top 10 lists beyond the three top albums shown on the main music homescreen (the rest of the lists for top artists, songs, albums, playlists and new releases are rather bizarrely hidden away under ‘More’ in the Genres section).

The Windows Phone client offers the fewest features for Zune Pass – you can’t even create new playlists or edit existing ones that you’ve transferred from the Zune Music Player on the desktop. From the Zune Music Player, you can access genre playlists, “mixtapes” (a collection of music based on theme, genre, era or artist) and celebrity mixes (currently a little lonely here with only two available), while the web client displays most played artists, songs and albums that are oddly different (yet more believable) than the ones that are shown in the Windows Phone client.

It’s strange to say, but while we love the user interface of Zune Pass, the actual usability isn’t all that great, and the Windows Phone client in particular is lacking a few important features. The Xbox 360 interface is magnificent, but you’ll need an Xbox Live Gold membership in addition to the Zune Pass subscription before you can access it – an extra $79.95 per annum (or $10.95 a month) if you aren’t already a member.

Music Unlimited
Sony’s Music Unlimited service does many things right. From the Now Playing screen, you can easily jump to other albums by the same artist, browse to similar artists, and read a detailed artist biography (if one is available). There are also premium channels (included with the premium membership) for browsing through the global top 100, local top 100, and top 100 lists for particular genres, and a “you might like” recommendation engine based on tracks in your library.

The “Music Sync” feature is unique to Music Unlimited, and lets you replicate the songs you already have on your desktop to Music Unlimited. It’s PC-only, so we couldn’t test it, but assuming all your tracks are properly tagged, you could then make use of Music Unlimited’s excellent discovery features on your existing music library to find similar artists or tracks by the same artist – an easy way to find more music that you’re likely to enjoy. Music Unlimited is also the only service that does playlists properly; when adding a song to a playlist (although you don’t need to do this to play a track), it gives you the option to create a new playlist or add to an existing one – something that Samsung would do well to copy.

The user interface for the Android client is a little amateurish, however, and like the Music Hub app, we encountered a few force close errors while testing. It’s also a little slow to load music – even over a Wi-Fi connection, music can take up to 10 seconds to start streaming (the other services start streaming almost instantly), and it would frequently take a long time to load the album art and related artists. If you regularly encounter 3G deadspots or don’t want to use up all of your data allowance with music streaming, the lack of off-line caching is a big limitation as well.

The web user interface isn’t much prettier than the Android client, although it’s nowhere near as ugly as the TV interface that you get when accessing Music Unlimited from one of their compatible Blu-ray players. You’re better off loading up Music Unlimited through a desktop web browser and connecting it to the TV, as the Blu-ray interface is tortuously slow, doesn’t display lists of tracks, even when you’re viewing an album or playlist (you have to scrub through tracks one at a time), and it stops playing music whenever you leave the Now Playing screen.

So which music streaming service should you choose? It’ll depend on your specific technology setup, habits and how much you’re willing to spend for what you use. But the good thing is the market for music streaming services in Australia is getting increasingly crowded; meaning more options for users and more competition. With the eventual launch of Spotify on the cards down under and the existing options, Australians could shortly be spoiled for choice when it comes to streaming music options.

Image credit: Various

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analysis The date of November 23, 2011, will go down in history as one of the blackest for the thousands of technology workers belonging to the many departments and agencies making up the Victorian State Government.

The State’s public sector workforce had already suffered many ignominies over the past few years. The cancellation of Victoria Police’s LINK crime database, following the departure amid allegations of contractual improprieties of its former chief information officer. The incredible series of delays, budget over-runs and shadowy claims associated with the gargantuan myki public transport smartcard overhaul, which were revealed in a series of damaging leaks.

Of course, the HealthSMART e-health overhaul, which had been quietly going off its rails for years, was also in the picture. And central IT shared services agency CenITex … let’s not even go there.

The state’s technology workforce was already aware of all of these problems — and many more — when dawn broke on Wednesday the 23rd of November 2011. But by the end of it they would be in shock all over again. That day last week marked the publication of a landmark report into ten of the state’s largest IT projects rolled out over the past half-decade and beyond. And what it found was remarkable. Total cost over-runs: $1.44 billion. Almost every project had been delayed, in some cases by up to half a decade. And in several cases, major, important IT projects had simply failed to deliver and been scrapped.

In the wake of the publication of this report, which analyst firm Ovum has branded the signal of “an emerging crisis of confidence in government ICT” in Australia, Delimiter undertook over the past week to put some thoughts as to what should take place next.

When almost every major IT project has broken its budget and its timeframe, and many have completely failed, after soaking up hundreds of millions of dollars of public money that could have been spent on health, education, cutting down crime or public transport, what happens now? Where does the Victorian State Governments and its technology workforce turn to? We’ll investigate the issue in a series of articles this week.

Don’t do it again
When we asked Australia’s top enterprise IT analysts what Victoria should do next, several of them made comments which reminded us of one of the fundamental precepts taught to all medical students as a first step when approaching any emergency medical situation: First, do no harm.

Peter Carr, the managing director of analyst house Longhaus (which has had a ringside view of similar state government IT disasters in its home state of Queensland over the past 18 months), was emphatic that the Victorian Government must not launch straight into the kind of comprehensive review of its technology operations that made Sir Peter Gershon famous (or infamous) within the Federal Government in 2008 and beyond.

“The last thing they need is a Gershon-style review,” Carr said. “They always end badly, to be honest.”

The reason for this, the analyst said, was that conducting such a review would inevitably lead the Victorian Government into repeating the cycle of technology underinvestment which led it to get into its current mess in the first place.

Carr said Longhaus had conducted research that tracked the performance of Federal Government technology operations over more than a decade — right from the establishment of the controversial Office of Asset Sales and Information Technology Outsourcing (OASITO) more than ten years ago under the Howard Government, right through to Gershon in 2008 and the fallout from the British efficiency expert’s recommendations over the recent period.

Over that period, Carr said, the Federal Government had gone through a clear cycle. The colossal IT outsourcing initiatives driven by OASITO — which saw major organisations such as the Australian Taxation Office sign multi-million-dollar outsourcing deals with companies like EDS — had been aimed at cutting billions out of public sector costs, but actually led to chronic levels of underinvestment.

Carr didn’t mention these examples, but it’s possible that it was such underinvestment which caused agencies such as the Department of Immigration and Citizenship, the Customs and Border Protection Service, the Australian Taxation Office and even Defence to be forced over the period since OASITO to kickstart IT systems overhaul projects worth billions — several of which went drastically off the rails and caused real-world impacts on industry and individual Australians, especially at Customs and the ATO.

The level of funds required always surprised the politicians involved, said Carr. “All of a sudden we’ve got a billion dollar spike in IT costs,” he said. “Forget the fact that we’ve underinvested for ten years. Suddenly some politician says: ‘They’ve screwed us again. Let’s do a Gershon review.’”

The issue, Carr said, was that the savings made from initiatives recommended by Gershon-style reviews into effiency and effectiveness weren’t reinvested in technology projects to keep systems up to date. The current Labor Federal Government had initially planned to set up a billion-dollar fund for IT reinvestment with savings stemming from the Gershon Review. But it famously canned the approach as part of the 2010 election campaign, re-allocating the funds to other budget areas and immediately justifying, Carr said, Longhaus’ theory on IT underinvestment. The analyst doesn’t want the same thing to happen in Victoria.

A once-off colossal review wouldn’t solve Victoria’s problems, Carr said. “It all starts with a continuing and mature Government investment approach, which we can’t seem to achieve.”

Don’t call in Superman
The second solution which Longhaus recommended Victoria avoid is the so-called ‘Super-CIO’ approach which has served the state poorly in the past.

In 2003, Victoria poached high-ranking Defence IT executive Patrick Hannan to become its first whole of government chief information officer. This ‘Super-CIO’ role was set up with the explicit intention of reining in the State Government’s troubled IT operations and establishing a more commercial approach to buying, implementing and maintaining IT solutions.

Hannan declared himself willing to git the task “a bloody good go” and made some headway on issues such as broadband for schools, but quickly became bogged down in interdepartmental power struggles and issues with staff misconduct in the ranks. He famously never returned to his post after a Christmas break, taking the CIO of the Department of Education and Training, Ian Paton, with him.

After that point, the state had several other high-profile executives in its central CIO group, notably another ‘Super-CIO’, Jane Treadwell, who was plucked from Centrelink’s well-regarded IT management team but suffered a similar fate as Hannan. Another high-flier was deputy state CIO Steve Hodgkinson, who landed as a senior government analyst at Ovum. We’ll hear from him on Victoria’s IT woes later this week.

However, Carr points out that in all of these cases, the ‘Super-CIOs’ concerned failed to make much of a dent in Victoria’s problems — despite the fact that high-fliers such as Treadwell and Hannan tried different approaches to the same problem — Hannan being more technically minded and Treadwell possessing more traditional management skills.

“They’ve kind of tried the high-profile CIO thing and the central governance thing and it hasn’t worked,” he says. “What are we achieving, trying that again?” The problem, according to Carr, is that the problems in the Victorian Government when it comes to IT are “systemic”. Extending his logic, a Super-CIO wouldn’t just be wrestling with the projects themselves. They’d be struggling in a quagmire of embedded practices reinforced by multiple layers of bureaucracy. And that’s not a recipe for change.

Don’t focus on shared services
Another recipe for change which has been popular amongst Australian state governments over the past decade has been the notion that government IT service delivery could be consolidated into shared services centres — one or more per state government, to serve a number of agencies. Western Australia, Queensland, the ACT and New South Wales have followed this strategy over the past decade, as well as, to a perhaps lesser extent, the other states and territories.

Victoria’s already gone a long way down this path with the 2006 creation of several IT shared services organisations by the Department of Treasury and Finance. These groups merged in 2008 and were re-badged as CenITex, an organisation which provides basic IT services to mega-departments like Health, Justice and Human Services, as well as a number of smaller agencies.

Others in scope for transitioning to CenITex are Victoria Police, VicRoads and the Department of Education and Early Childhood Development (DEECD).

However, all is not well when it comes to IT shared services strategies in Australian state governments. Over the past year, the Western Australia and Queensland governments, which had been most advanced in their IT shared services implementations, have both broadly abandoned the strategies following a series of widespread which resulted in their own massive cost over-runs, extensive delays and abject failure to deliver. Gartner distinguished analyst Andrea di Maio — a foremost global expect on government IT service delivery — recently published a blog post in Australia noting shared services as a concept was under attack globally.

“There is no doubt that duplication of services and spending across different government agencies makes little sense,” wrote di Maio. “But experience shows that there is insufficient attention to the governance aspects (agencies want to have a say in how the shared services are structured) and – more recently – to technology evolution that is making some of the technology that is being targeted through shared services more and more commoditised.”

“The challenge is no longer to put one organisation in charge of delivering shared services, but to look at how to support agencies in efficiently buying the same service from external service providers.”

Longhaus’ Carr agrees.

The analyst points out that with an rough estimate of 500,000 to 600,000 IT professionals in Australia, and something like 130,000 along being contractors, it is unlikely that enough skilled labor exists for state governments to competently run their own on-shore IT service delivery centres at cost levels which they can afford to pay.

In Victoria, CenITex has been criticised for having too high a percentage of expensive contractors in its resources base, and has over the past several years been attempting to convert some of those IT professionals into permanent staff. However, Carr points out that when Federal Government agencies tried the same thing following the publication of the Gershon Review — which slammed the Commonwealth’s high reliance on contractors, a nasty little cycle occurred.

Federal Government CIOs were forced to let contractors go, the analyst says, only to have to re-hire them when important projects came up. “There’s nobody else to do the bloody job,” he says.
And the pain is already being felt at CenITex. Inter-departmental skirmishes are currently being fought between the shared services agency and some of its clients, who just want to get the job done and have been frustrated in some cases over the past year about the agency’s inability to do it. One can only imagine what the reaction was from CenITex’s government clients in mid-October when an outage at the shared services agency left thousands of government staffers without email and other IT systems for up to a week.

Whispers are rife in the Victorian Government that some agencies are bulking up their own internal IT teams to get work done on the sly that the official CenITex resources haven’t been able to complete. And CenITex isn’t even involved in IT projects, mostly — it tends to focus on standardised service delivery such as desktop PC support.

Ultimately, the Victorian Government’s IT problems are not going to be easy to handle … in fact, that’s probably the understatement of the decade. And both a long-term view as well as short-term tactical decisions will need to be taken.

However, what we’ve tried to outline today is where the obvious and immediate pitfalls lie for the state. If analysts and the past experiences of other states and Victoria itself are to be believed, the state will not find its way out of its current mess by conducting a huge, Gershon-style review, or by relying on Super-CIOs or shared services agencies. Those methods have been tried; and broadly they have demonstratedly failed repeatedly in other jurisdictions.

“Shame on the politician who endorses a Gershon Review for Victorian Government,” said Longhaus’ Peter Carr this week. “Shame on the politician who tries to bring in some external CIO superstar. A super-CIO isn’t going to fix it, shared services isn’t going to fix it. Hiring more IT public servants isn’t going to fix it.”

We’ve heard a fair bit from Longhaus on how not to fix Victoria’s IT problems. So what will fix Victoria? Next up, we’ll hear from Ovum analyst and former Victorian deputy CIO Steve Hodgkinson as well as from veteran analyst firm Gartner on what will work and has worked in similar situations. We’re also planning to look at who is actually responsible for ICT in the Victorian Government; putting some faces and names to the task ahead.

Related posts:

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3. Federal Govt kicks off cloud purchasing cycle