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.

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

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.

profile When Australia’s technology industry thinks about the Federal Department of Immigration and Citizenship, it is overwhelmingly one project which comes to mind. A giant, lumbering mammoth of an initiative; a gargantuan behemoth which spanned half a decade, involved hundreds of staff, and soaked up many hundreds of millions of dollars in investment.

That behemoth named Systems for People.

The project was first approved in the 2006 Budget as a mammoth technology overhaul of DIAC’s IT systems, following the damning Palmer and Comrie reports — especially stemming from the unlawful detention of Cornelia Rau. The project was initially valued at $495 million but attracted several budget increases. Much of that funding went to companies like IBM, Oracle and CSC, who worked at the core of the overhaul, predominantly focused on immigration records, but slabs also went to pay a small army of staff employed by DIAC itself.

As the project wore on over the succeeding half-decade since its genesis, it would vault the public servant responsible for it into the public limelight, as similar massive IT overhauls at the Australian Taxation Office, the Australian Customs and Border Protection Service and even the Commonwealth Bank had done before it.

For five years, DIAC chief information officer Bob Correll shepherded Systems for People through its development cycle. The appointment of suppliers. Struggling to contain wage costs. The six monthly status updates with the press. And more. On and on Systems for People lumbered, like a gargantuan elephant pulling a fully-laden cart towards a Byzantine city.

But now that storm has passed over DIAC, and with its passing has gone Correll, who retired from his role in April this year. In his place was appointed a new executive, Tony Kwan (pictured, below).

Little is publicly known about Kwan. His LinkedIn profile only goes back to May this year, when he took up the DIAC role. His biography was never issued by Immigration, upon his appointment and his name does not appear in Google more than a handful of times.

But what we do know about Kwan appears to show a somewhat open and innovative character. His previous known role saw him leading the IT operation of the former Department of Education, Science and Training as its chief information officer. In 2004, in that role, Computerworld quoted Kwan in the context of Linux desktop deployments as stating that his-then department had done a lot of work looking at open source technologies — currently a major focus of the Federal Government.

“The Learning Federation has set up an open architectural framework to promote learning objects to try to maximise investments in developing learning material that’s open and re-useable,” Kwan said at the time. “We are also looking at promoting the use of open source software.”

The following year, Kwan openly spoke about the Department’s IT strategy at an event held by the Australian Information Industry Association in Canberra. He was also active in wanting to explore inter-departmental approaches to the trend of environmentally friendly computing, as well as on other cross-government committees. And in a public blog post in December 2010, Maritime Safety Authority CIO Ewan Perrin described Kwan as one of the better-known CIOs in the Government’s small agency CIO mentoring program — listing Kwan alongside well-known AGIMO first assistant secretary Glenn Archer.

In one of his first interviews since taking the Immigration role, we put it to Kwan that he had some pretty big shoes to fill following Correll’s retirement. And the CIO is quick to praise the work that has gone on at DIAC before his time.

“I’d like to acknowledge the good work the IT team in DIAC has done in the past few years,” he says. “The Systems for People program is coming to a close, the Gershon savings have been implemented and we have rationalised our IT platforms, with the consolidation of six data centres into two.”

When Department of Defence CIO Greg Farr took up his role in November 2007, one of his first actions was gathering information — speaking to stakeholders in the business to find out what Defence’s IT operation was doing well and poorly. And the same has been true of Kwan.

In his new role, the CIO notes that his first steps have been ones of communication. “My process was to touch base with key stakeholders and business areas as quickly as possible,” he says. “I checked with them what we were doing well and where we needed to improve. I’ve tried to learn as much about key issues, challenges and priorities to determine what are urgent and important and what are non-urgent.”

And where Farr found a degree of negativity about Defence’s IT support, based on its past performance, it’s possible that Correll’s broadly positive reign has generated good karma within Immigration. “I have found the environment extremely supportive,” notes Kwan.

One of the interesting things which the CIO found is that although he notes the Systems for People project was broadly completed with the implementation of what Immigration terms its generic visa portal, there is still ongoing work within Systems for People at the department.

“Systems for People was completed with the implementation of the generic visa portal (GVP) in April 2011, which was a key milestone,” says Kwan. “We have also implemented successfully further system releases, termed CR2 and CR3, as part of our ongoing systems release cycle, which included enhancements to key Systems for People systems and portals.”

Kwan says the GVP implementation gives Immigration a “solid platform” to enhance and roll in new sub-classes to the visa system which lets people travel to Australia. At the moment, the system deals with sponsorship, nomination, temporary skilled sub-class 457 and general skilled migration applications. In addition it can issue bridging visas and cancel visas. However, the CIO says the department is also currently expanding its ability to receive visa applications online, using GVP as the backend platform for that functionality.

Although we weren’t game to mention the politically sensitive refugee issue, Kwan notes that Immigration is currently also undertaking work on what he terms its “irregular maritime arrivals program”, which he says will enhance the department’s case management portals to increase the functionality and reporting capability for detention services.

Kwan notes that while the Systems for People project was broadly completed with the implementation of the initiative’s generic visa portal (GVP) in April 2011, however, some incremental work is still going on in that area.

In short, although the cyclone of activity that was Systems for People has died down a little, the project is ongoing in many senses — and a core part of Immigration’s IT work.

Beyond Systems for People
However, as with any major government department, there are also a plethora of other IT projects going on at Immigration.

Kwan notes immigration is progressing its Windows 7 desktop migration. The project — first revealed in January 2011 by ZDNet.com.au will doubtless involve the support of Unisys, which has a contract to provide outsourced desktop services to the department through 2013. The rollout will constitute one of the largest deployments of Windows 7 in the Federal Government, alongside the Department of Human Services. It will also involved the rollout of Microsoft’s latest Office 2010 software.

Immigration’s business intelligence capability is also being worked on, and as with many other organisations, virtualisation is a key issue, with Immigration already having virtualised more than 70 percent of its infrastructure, according to Kwan. The organisation is also looking at better ways to support its workforce with mobile solutions — conducting an iPad trial — and is also looking into how to provide better service to staff working in remote locations.

However, when asked what are the top-line issues affecting Immigration’s IT function, Kwan appears less interested in specifics than the overall trends — like a strategist rather than a tactician. “It’s about managing supply and demand, implementing the capital works program and responding to urgent government and departmental priorities,” he says. And the labor issue — which plagued the Systems for People project — is still one that Immigration is grappling with, with Kwan noting the problem of working out how the department can “attract the necessary staff resources, given Canberra has a tight labour market”.

The CIO appears to take the same strategic approach to some of the biggest trends impacting the IT sector as a whole at the moment.

He notes Immigration considers cloud computing a “key technology platform” that the department would like to pursue in future — “particularly in terms of infrastructure, platform and storage”. And on the potential for a cross-departmental government cloud to be created: “It’s still early days, but we are quite open to talks with other agencies and the Australian Government Information Management Office on discussions of a private cloud.”

With Immigration’s high degree of existing virtualisation, Kwan says, talk of a G-cloud comes down to the value proposition involved.

The CIO feels the same way about IT shared services, a concept which has taken a dramatic beating in Australia over the past year, as both the Queensland and Western Australian state governments have broadly walked away from their disastrous IT shared services implementations, which had suffered from a lack of disciplined governance. The Victorian Government is also known to be struggling with its IT shared services organisation CenITex.

“We have no definite plans at the moment, but we are happy to discuss with other agencies on shared services opportunities if and when appropriate,” says Kwan.

There is no doubt that Kwan will see a significant role in the future development of Federal Government IT strategy. Alongside IT leaders from the Department of Defence, the Australian Taxation Office and the Department of Human Services, Immigration is one of a number of mega-agencies whose approach to technology helps shape that of the rest of the Government. Will the CIO prove to have a dramatically different approach from his predecessor?

So far it appears not, despite some intriguing flashes of innovation the CIO displays today and in the past — as well as his awareness of current industry trends. Kwan himself appears to be content to be judged by the results he will achieve in the next few years.

“My focus is very much on the present,” he says. “I will work hard to ensure DIAC IT continues to deliver and let the outcomes speak for themselves.”

analysis This week I came back from a week’s worth of holidays to find that two of the country’s leading analyst firms had reached a complete disagreement about one of the most fascinating trends sweeping Australia’s enterprise IT landscape: Bring your own device (BYO) computing.

Firstly, a media release issued by Dimension Data trumpeted research the systems integrator had commissioned Forrester to carry out. In the release, DiData highlighted the fact that in Australia, between 10 and 18 percent of organisations recently surveyed were already providing support for employee-owned laptops, tablets and smartphones. In addition, even more local groups — between 18 and 26 percent — were planning to do so over the next two years.

As you would expect him to, given his company’s role helping organisations with such plans, DiData’s chief technology officer Ettienne Reinecke said the research showed “growing employee interest” was pushing organisations to “think differently” … perhaps an appropriate turn of phrase, given the fact that most of the tablets and many of the smartphones employees are bringing into the workplace are Apple-branded.

And yet not everyone’s so keen on the BYO device phenomenon.

A separate media release issued by Ovum took the opposite slant, claiming that “only around 10 percent” of companies it had recently surveyed said their preferred model was for employees to provide their own devices. Of course, Ovum acknowledged the BYO trend would be significant long-term, as company staff clamoured to use their iPad at work, but advised chief information officers to take a cautious approach and ensure their device management capabilities and interest in cloud computing solutions — which can aid in delivering device-agnostic services — are up to date.

Now there’s two points I want to make about these two pieces of commentary about the BYO trend in Australia. Firstly, there’s the obvious point that although they’re coming at it from different angles, both Ovum and Forrester have in fact published similar data about the adoption of BYO policies in Australia. They have both arrived at around the same figure — 10 percent — for organisations which are already supporting the trend.

But the second point is perhaps the most important one: Framing the BYO debate as a yes/no question, as both firms have done, leads to a false dichotomy.

If you read into the DiData report produced by Forrester (PDF), you’ll find that the report isn’t fundamentally about BYO computing at all; it’s about desktop virtualisation; an area much nearer and dearer to the system integrator’s heart. And in fact, the report highlighted several fascinating findings about the issue and how it’s affecting organisations.

Firstly, Forrester found that there was no doubt that organisations “of all sizes, industries and geographies” are embracing client virtualisation, with the most compelling justification for adoption of the technology being the desire to escape the “seemingly never-ending ‘rip and replace’ refresh cycle” driven by desktop infrastructure refresh projects — which are often accompanied by simultaneous operating system and application overhauls.

Secondly, the analyst firm wrote — and as I recently argued with respect to cloud computing — IT managers are embracing complex, ‘hybrid’ approaches to the issue. Very few organisations are virtualising everything on the desktop. Instead they’re taking a tactical approach, using software as a service solutions alongside thin clients, on-premise and even thick client options, depending on what approach will best fit business needs.

And lastly, and perhaps this is Forrester giving a nod to DiData, the report claimed IT managers should rely on systems integrators to support them in the process. I don’t disagree with Forrester’s argument that in many organisations, desktop virtualisation migrations are a complex procedure that neither their disparate desktop support and datacentre teams are completely prepared for; but I do think such a conclusion shouldn’t be on page 2 of a report sponsored by DiData.

At least, not if you want the report to be credible.

Way down in the report is the contention that, alongside the release of new operating systems like Windows 7, BYO strategies actually represent what Forrester describes as a “major market enabler” for desktop virtualisation. One anonymous enterprise architect’s quote sums it up well:

“About a year and a half ago, I put together an application and desktop virtualisation strategy. Unfortunately, we then sat on it for a couple of months — but virtualisation’s important re-emerged with mobile devices. We realised we needed to diversify our computing ecosystem, as we felt we had been locked into proprietary plaforms. Today we’re focused on iOS support for iPhone and iPad; next up will be Android.”

Are you noticing what’s going on here? BYO computing is not a stand-alone trend. In fact, it’s not even close to being the main issue for IT managers in administering and developing their corporate systems. But end user support for the idea — CEOs and middle-managers who want to use their iPad and iPhone at work — is providing a strong justification for IT managers and CIOs to be able to re-architect their back-end systems to meet user demand.

Without BYO computing, in short, virtual desktop business cases would have a hard problem getting off the ground.

You can see this trend in the wild, too. An article published by CIO Magazine last week highlighted Southern Health’s (located in Victoria) rollout of a BYO policy, including iPads, within its organisation. But if you delve a bit deeper (which CIO’s sister publication Computerworld did a few weeks back), you’ll find that the real activity going on at Southern Health is:

“The replacement of a number of core enterprise systems such a Patient Administration, Financial Information Management, Rostering and Payroll.” — Southern Health IT director Paul Jurman

In short, BYO computing was linked to core application replacements. iPads … were just the public face which Southern Health put on a much more systemic overhaul of its critical applications.
When you’re talking about BYO computing, it’s very easy right now to get locked into a polarised debate about whether end users should be able to bring in their own devices to workplaces. And it’s a debate which every staffer who’s locked into using a 2005-era HP desktop at work with Windows XP is interested in having — because using old technology at work, when you’ve got a 2011 MacBook Pro sitting at home — seems ludicrous.

But this is primarily an end user debate. For IT managers and CIOs, the debate is a lot more complex than ‘yes’ or ‘no’. For Australian IT managers and CIOs right now, the debate should not be “should we support BYO”, but “how can we leverage BYO to get other outcomes in the business”.

This balance between populism (“I want my iPad at work”) and pragmatic reality (“How can we architect our ageing enterprise IT systems for business agility?”) is one which IT managers will face constantly in their careers — as many other professionals will as well. Right now, with BYO computing, there’s a golden chance to balance these competing priorities out; if Australian CIOs can frame the business case right.

Brickworks business support manager Baden Bradbury has a bone to pick with Apple supremo Steve Jobs.

“We would have had them already,” the executive (pictured, below) says of his company’s plans to roll out Apple iPads to Brickworks sales staff in a major trial of the technology in the workplace. However, Bradbury says, chronic stock shortages of the iPad 2 since it launched in Australia in late March this year have left his company’s employees impatiently waiting.

Part of the problem, Baden says, is that some of the sales reps — those in Brickworks’ roof tiles division — have never had a device to take with them on the road and gain access to the documents they need. Other divisions have issued their staff laptops over time, but some employees have traditionally worked from a home system they supplied themselves, or from the office via thin client terminals.

“The main reaction is frustration at the moment,” he says in a recent interview — frustration because they’re keen to starting using the iPads.

And yet, it is this lack of current functionality which delivers some insight into why Brickworks is so keen to adopt the iPad in the first place — and why the devices may be more useful than the traditional laptops for sales associates who are often on the road.

Bradbury says when Bricks started conducting a limited trial using the first iPads some time ago with a few staff in diverse locations, the company quickly realised that the 3G-equipped tablets represented a great way to give its staff remote access to customer relationship management systems and other software on the road. The company recently adopted Salesforce.com, which is delivered through a web browser, in the fast-growing software as a service model.

When coupled with mobile access to email, and with software installed from Citrix that allows applications to be served remotely, the iPad starts to take on much of the functionality traditionally acquired through a full-fledged PC.

“But honestly, you’re going to get more out of your iPad than a laptop,” says Bradbury.

The executive points out that when it comes to accessibility, portability and speed, the iPad has other devices beat. “You hit the button, and it’s on. With a laptop, you’ve got to start it up and all that. You don’t have the speed of access which you do on the iPad,” he says.

This means, according to Bradbury, that staff are more likely to use their iPads — because they can easily flick it on, open up files and check their email — without a huge commitment in time. Staff are also more likely to enter those small details which make CRM systems complete — birth dates, appointment updates, tiny notes and so on. In this way, rolling out iPads actually becomes a way to ensure more extensive usage of CRM systems in general — because it’s easier than typing everything into a laptop.

When the iPads do arrive, they’ll be rolled out to a few dozen sales staff in Brickworks’ Bristile division, but Bradbury expects other divisions to follow suit eventually as the efficacy of the Apple device becomes apparent throughout his organisation. Eventually, hundreds of staff in the company’s full sales team could be using iPads.

“If the feedback that we get proves it over time, you can fully expect that as laptops come up for renewal, [the thinking will be] why would you buy a laptop if you could manage it with an iPad?” he says. Other people within the company will say, Bradbury reckons, that “these divisions seem to be kicking goals”.

“No one’s kididng anyone that they can sit down and do major spreadsheet development on an iPad, but to access files, emails and for us, CRM, to maintain, monitor and contact leads, it’s excellent and we’re very keen and can’t wait to get those out to everybody,” the executive says.

Caveats
Of course, like all technologies, the iPad has its weak points, and Bradbury isn’t shy about chiding Apple for a few of them.

For starters, he says, Apple’s refusal to let its devices handle Adobe’s Flash format crops up from time to time, and “it is a frustration”, with the company wanting to view training materials online for packages like Salesforce.com. Although the executive notes that the availablility of content using the rival HTML5 video format is increasing, “waiting for that to happen is a bit frustrating”.

In addition, the manageability of the iPad in an enterprise sense is still up in the air.

Bradbury says until the company has the device in the hands of more users, it can’t tell what supporting the rollout will represent in terms of a load. However, the organisation appears to have somewhat dodged a bullet in that area, because a number of its staff are already familiar with Apple’s previous iPhone device, and so are usually able to manage their own iPad as a result. “If you’ve got a user who has been using an iPhone and who has been downloading applications and been managing his phone alright, our expectation is that they’re not going to find iPad a huge leap,” says Bradbury.

“People can play their Angry Birds on it just the same way, but it’s on a big screen now.”

Staff do go through a productivity reduction of about 10 percent in the first week or two they get their new iPad, the executive notes — to play with its functionality and so on. However, after that point things return to normal.

Furthermore, the carrier which an organisation chooses to support their device rollout is important.

Bradbury says the company was previously with Vodafone for three years for its mobile device fleet, but the carrier’s “poor coverage” in locations which Bradbury said weren’t even very remote, meant that the company recently switched to Telstra, which the executive says has been a “wonderful, wonderful thing.”

Of course, the iPad is also now no longer the only device in its class. Telstra has made its intentions clear to market the hyped Motorola Xoom tablet it has local exclusivity on to large enterprise and government customers as well as small businesses, and a wave of other tablets — including the BlackBerry PlayBook — are currently landing on Australian shores.

Bradbury says Brickworks didn’t consider any other devices for its own rollout — as it was already using the iPhone, it didn’t want to confuse users. “We’re a medium-sized business and pretty stretched with resources,” he says. “It’s best to keep it as similar as possible — we didn’t want to confuse people and cause us drama and reduce take-up.”

At the moment, the future of the tablet form factor in general in organisations around Australia remains a little uncertain. IT executives are grappling with an influx of devices informally being used in the office by staff who bring them in themselves, and are reacting in different ways. The Federal Parliament, for example, still won’t allow politicians to connect the devices to its internal Wi-Fi network, while others such as Westpac and AMP are known to be making extensive use of the devices internally.

Even less certain is the future of devices which aren’t the iPad. With Apple currently dominating the tablet market, and rivals only now starting to ramp up their operations, it’s unclear what the future may hold in terms of supporting heterogenuous devices.

But if there is one thing which the Brickworks example makes clear, it’s that it’s worth testing the waters — your organisation might just find a device like the iPad fits in perfectly.

Image credit: Brickworks

This article is by MacTalk founder Anthony Agius. It was originally published on his blog and is re-published here with his permission.

analysis You’ve probably heard the rumours that the next iPhone is getting a thing called NFC. You’ve also probably read about Visa doing some funky trials with “PayWave” and iPhones. And you also probably have a credit card which supports PayWave.

Unfortunately, most of it is a bunch of hot air, but in the coming months, things are set to get much more serious. Aficionados of slim wallets will be pleased. Simply put, in the very near future, you’ll be able to use your mobile phone to pay for small items, really quickly. But how does this work? Is it voodoo magic? Can someone get hold of my phone and buy really embarrassing things that puts me on an ASIO watch list?

Let’s look at the first bit of the puzzle – credit cards, money transactions and financial institutions. Right now, if you want to buy something at the shops, you either have to use cash, or some sort of card, be it EFTPOS or a Visa-, Mastercard- or American Express-branded card. Despite the ease of using a traditional card (insert card into terminal, select account, enter PIN, press Enter), it’s the slowest way of making a transaction, plus it unfortunately trips up some of the less technological savvy amongst us. I know I’m not the only one who becomes irrationally violent when someone (typically an old person or bogan mum) takes eons to swipe her credit card, inserting it the wrong way, unsure of which account to select and then entering the wrong PIN.

Using modern technology, the boffins at Visa and MasterCard have devised a “contactless payment system”, in order to simplify and speed up the process. Why did they do this? Surely what we have now is fine? Well Visa and MasterCard hope that if the barrier to entry of their product (i.e make it fast and easy) is low, it can replace the current product leader (cash) for the area of the market they don’t own — small and quick transactions. Paying for things like fast food, groceries or petrol are generally done with cash as they’re small amounts and people are in a hurry.

Visa and MasterCard get a slice of the action every time you use your card, so naturally, they want a cut of these small transactions as well. They’ve already sewn up the bigger end of the market, so they need somewhere else to generate billions of dollars of profit. As little cogs in the financial transaction machine, we benefit from Visa and MasterCard’s efforts to make money every time money changes hands, in that we can complete a small financial transaction in under 10 seconds without having to lug cash, or for the dumber people, remember how to use an EFTPOS terminal.

MasterCard developed PayPass and Visa developed PayWave. Very similar technologies, which at first, were incompatible. So when this technology was first trialled, you had to find a merchant (credit card speak for “shop”) that had a PayPass, or PayWave terminal (credit card speak for “card reading machine thing”), depending on your card. Luckily for us, they both realised having competing standards was dumb and get in the way of them collecting a few cents each time you swipe. Out of that epiphany, EMV (Europay, MasterCard Visa) was born. It’s a set of standards that makes sure all contact-less (and contact cards) operate in the same fashion and are cross-compatible. So now, PayPass and PayWave are pretty much just marketing terms meaning “contact-less”.

At the moment, most Australian banks are issuing Visa and MasterCard credit and debit cards with this contactless technology in them. More and more merchants are getting contactless card readers too. Woolworths just announced they’re rolling them out in all their stores too. Within the next 3 to 5 years, contactless card readers will be everywhere.

The way contactless payments work currently is pretty simple. You go to buy something (under $100), take your wallet or purse out, when the terminal says “insert card”, just tap your wallet or purse on the terminal and you’re done. If you have two contactless cards (e.g: a NAB Visa and a Commonwealth Visa) you need to take the card out of your wallet. The technology doesn’t allow multiple cards to be read at once. If you’re buying something over $100, you just tap the card and then enter your PIN (or sign). Easy.

There are detailed FAQs about the technology on MasterCard’s and Visa’s websites, which explain all the details of how they work, what sort of limits there are and put to bed any security fears. This is one bogeyman people fear when using contactless and PIN-less payments. Seeing as there’s no PIN to keep secret, what’s stopping someone just taking your card and going on a shopping spree? First of all, you can only do $100 or less without a PIN. Visa and your bank have good insurance. If you say you didn’t do those sub-$100 transactions, chances are they’ll return your money with little fuss. Giving people peace of mind and using their cards without hesitation is worth way more to them than whatever it would cost in refunds and loss of trust.

Why did I bother explaining all that? What’s it got to do with the iPhone and NFC? Because what happens now with your credit card using PayWave/PayPass, is the exact same thing you’ll be doing with your iPhone when it gains an NFC chip. What’s NFC? NFC stands for Near Field Communications. It’s a very broad term given to technologies that transmit data, wirelessly, within a short range. Wikipedia has more info than you could ever want about it.

Placing an NFC chip into a mobile device gives the device the ability to communicate with all the target devices out there. A credit card terminal is just one of the things an NFC enabled device can do. Normally an NFC device would be quite dumb and only do a single specific thing (for example: a plastic card that requires no power). But thanks to the magic of software and apps, programs can be developed to give the mobile device the ability to communicate to any NFC target that you write an app for. It’s like having a Swiss army knife. Just without any sharp stuff. Or a toothpick. Or that nail file that’s always totally useless.

Visa and MasterCard (mainly Visa), have been busy getting a way to ride on the iPhone bandwagon, by applying their existing technology to the iPhone and taking advantage of the iPhone’s unique features, such as geo-location, cameras and touch screens. Their aim is to make paying for stuff really easy, so you buy more stuff using your Visa account and therefore, making Visa more money.

As of May 2011, there’s been a lot of trials and PR-type guff as to what Visa will actually do and how NFC on the iPhone and smartphones in general will enable mobile payments. A year ago, in May 2010, Visa launched a US trial to bring PayWave to the iPhone 3G. It was a case, that had a MicroSD card in it, which houses the NFC gear to communicate with the terminals. It was accompanied by an app made by Visa, which communicated with the SD card in the case and enabled it to act just like a PayWave credit card. I assume that the participants had existing Visa accounts and the app simply cloned their existing cards.

Very little detail was given about how the app worked and where the money for it came from. Overall though, it was quite clunky as you had to have the app open (multi-tasking didn’t exist) to pay, plus you needed to have that rather ugly case. If you have a phone with a MicroSD card slot though, it worked pretty well. Following that, in October 2011, Visa worked with some public transport operators in New York and New Jersey to trial using PayWave on a mobile to augment their ticketing systems. That was one of the things that intrigued me most and NFC and PayWave, because as a Melbournian, I’ve experienced our public transport ticketing system Myki and wish it worked like that. In Australia, ANZ bank just completed a four week trial of the same ancient system in April 2011. That’s the state of contactless transactions with your mobile right now. Crappy and kinda lame.

In the next few months however, things will improve immensely. In the UK, it already has. Barclaycard and Orange have released a crappy phone called the Samsung Tocco Quick Tap and it’s sole selling point is that it can do contactless payments. The phone itself is uninteresting, but it’s the first publicly available contactless mobile payment system outside of Japan, that doesn’t suck. What Orange and Barclaycard have done, is made an app for the phone which acts as a prepaid credit card. You simply add money into your Quick Tap account and that money is available to use anywhere that accepts PayWave/PayPass. So while it’s not an actual credit card, and doesn’t interface directly with your bank account like a debit card, it’s a glimpse into what the banks have planned.

Visa recently put out a press release and fluffy video outlining what they see the future of mobile payments becoming. There’s so many buzz words, it will fry your brain, so I’ll break it down for ya. Visa want to make a “digital wallet” which is an app that sits on your computer and smartphone and links to all your money pots (PayPal, your bank accounts, your credit account) and allows you to pay online by entering a username & password, which provides the merchant with all your details, so you don’t need to fill it in each time you buy online.

This same username and password is used to log into a Visa app on your iPhone, allowing you to configure how you want to pay for stuff person to person (e.g: you owe your mate $20 for lunch) or for a merchant (for example buying a can of Coke at a vending machine, a pair of Dunlop KT26s from Big W, or a new MacBook from Apple). That same app can even give you discounts and special offers, using the GPS feature, or a Foursquare style frequent customer feature.

How does that work in practice? We don’t know quite yet as it’s not out, but it’s not hard to hypothesise how it would all go down. Imagine you’re at Woolworths, buying your groceries. You go to the self serve checkout, scan all your goods and bag them. When it’s time to pay, all you do is get your iPhone out of your pocket, hover it over the payment terminal, take your stuff and leave. Only shoplifting would be easier.

On your iPhone 4S+ XP or whatever Apple call the next iPhone, there’s a Visa app. It runs in the background, working with the new fancy NFC chip embedded in the iPhone, waiting for a ping from a target device (the payment terminal). When you tap your phone to the terminal, in the background the Visa app talks to the Woolworth’s payment gateway, does all the usual credit card transaction stuff, just like a credit card would. The Visa app has preferences, in which you can set a default payment method. You can have it set to draw from your credit account by default, or your debit account (using your own money, just like EFTPOS or a Visa debit card now).

If you want to change from your default payment type, you can launch the app and do a one-off account change. Because you’re at Woolworths, your Everyday Rewards card is automatically processed, as Visa and Woolworths worked together to make sure their loyalty scheme (together with all the other loyalty schemes around) is enabled, preventing you from forgetting to scan by needing to dig that extra card out of your wallet, or leaving it at home. The receipt isn’t printed out, as it’s simply emailed to you. You can also instantly see how much money you have remaining in your account, by opening the app and seeing real-time transaction info.

The above isn’t far fetched, the technology is there and Visa probably has everything ready to go. Google’s Nexus S has an NFC chip in it and it’s available now too. But there’s no Visa app for Android that enables this. When it comes into the hands of consumers, is up to whenever Apple decide to release an iPhone with NFC. Visa and MasterCard can’t wait.

Image credit: Mike Gaines, Creative Commons

It’s 9:30 AM in one of technoloy giant IBM’s Sydney offices on a spectacular Autumn day, and a trio of Australian chief information officers are discussing the evolving future of their profession with a bevy of the journalists who cover their industry.

Back and forth the debate goes as those around the table sip their morning coffee — serious themes and ongoing issues are tossed up and passed around, jokes and laughter lighten things up, and you can see the passion in the eyes of those who care about technology and its potential to change the world.

But something’s missing this week.

Five to ten years ago — or less, in some circles — the conversation would have revolved around technology itself. Oracle versus SAP. Microsoft versus Linux. Software as a service versus on-premises deployment. Whether unified communications can deliver on its promises, and what place legacy mainframe infrastructure has in the modern business. The three letter acronyms would have buzzed around the table like a swarm of busy bees.

But this week’s discussion is different. Instead of talking about technology, the IT chiefs in the room discuss business. Leighton Contractors CIO Diane Fernley-Jones laughs with her counterpart at Boral, Greg Palmer, about how much effort it must take to administer Boral’s extensive truck fleet. Veda Advantage CIO Tony Kesby talks about the financial services industry and how legislation may shortly free up the amount of information his company can provide to its customers — major lenders.

Overall, it’s not a discussion about technology — it’s a discussion about business. And it shows how times have changed.

Fernley-Jones says if she looks back in her career, for many years the team she worked in was seen as “the guys in the back” who “turned the handle” on the systems keeping her company’s general ledger up to date. “We were not really seen as integral to the business,” she says. But those days are gone.

Today, the CIO says, other executives in her business are coming to her and asking her to work directly with them to help streamline business processes and push positive change through. “We’ve got to do things smarter,” she says. “We cannot take a business model we were using ten years ago and use it moving forward.”

It’s the same situation with Kesby, who says traditionally, the CIO role has been seen in the industry more as the “head of IT” rather than as a general executive role in the business. Now, he says, there is a definite alignment between CEOs and CIOs in businesses, with a business focus permeating throughout IT departments.

“IT people are increasingly leaving the toolkit at home and bringing the briefcase,” he says.

This alignment of organisation’s IT functions and their overall primary mission is clearly having an impact. Palmer notes that in Boral, the safety of its staff is paramount and comes into every discussion. Consequently, he says, the company’s IT team has been able to improve the safety of its trucks by using technology to track every vehicle in its fleet on its journeys — logging how long they’ve been on the road, when they stopped and so on.

Along the way, the efficiency of the fleet has also been boosted — for example, as soon as a truck unloads its cargo, it sends a signal back to head office so that time isn’t wasted between jobs.
Kesby notes his company has already done all the back-end integration work in preparation for long-awaited legislative change that will open up the amount of information it can source and provide. The way he talks about the initiative implies it’s something obvious — of course Veda’s IT team would be ahead of the wider game in its industry.

This changing role of the modern Australian CIO — from engineer to facilitator, from tech-head to business leader — is something IBM and a host of other organisations have been tracking as well. Big Blue’s strategy and change leader, Matt English, says the company’s recent study into CIOs globally (the company conducted interviews with executives around the world, including the trio who attended its roundtable on the subject this week), showed this change in action.

There was a “very strong alignment” between the views of the CEOs and CIOs in the study, he noted. Both were very focused on both the rate of change as well as the complexity coming into their work going forward.

But is that alignment new?

“I think you could almost look at this as a coming of age,” says English. “I don’t think we’ve particularly seen the closeness of alignment [before] that we’ve seen in this particular study.” Going back to a similar study in 1997, the IBM executive notes, chief executives were quite divorced from the IT priorities of their businesses.

Much of the change is coming from the recognition from all parts of businesses about how technology is changing every aspect of how modern work is conducted — from the way we communicate in the workplace, to the way business processes take place and even hiring practices.

Fernley-Jones says there’s a recognition in her business that more investment needs to be made on IT. “It isn’t just turning the handle and keeping the lights on — which perhaps is the way we were looking at it inside Leighton Contractors ten years ago,” she says.

However, all three CIOs in the room agreed that trust — to have a seat at the executive table and be part of big business decisions and projects — has to be earned by technology specialists.
According to Fernley-Jones, going back four to five years, she often received enquiries from her business about problems with its helpdesk, or about a communications link being down. CIOs need to build stability, credibility and trust, she says — larger conversations can come after the basics have been worked out.

Palmer agrees, noting that it’s an evolutionary process. An issue in his business had been getting data links and applications to perform, he says, adding his team kicked off an internal campaign to bolster its systems and get things back on track. Other issues have included focusing on keeping new systems vanilla as they’re rolled out, to ease later changes, setting up best practices in enterprise resource management and more.

“We had a two-pronged strategy of what we called front-line effectiveness and transactional efficiency,” the CIO says.

It’s obvious that serious positive change can occur in Australian organisations of any size once that trust has been earned. The Commonwealth Bank of Australia, for example, is perhaps best known in Australia’s technology industry for its gargantuan $1.1 billion revamp of its core banking platform, but it has also had a major focus — as have other banks like Westpac — over the past several years on cutting down the number of top-level, ‘Severity 1′ outages in its business. It’s possible without this level of stability, the bank’s technology team led by CIO Michael Harte might not have had as much support for the wider revamp project.

Of course, despite the role of the Australian chief information officer being more mature and aligned than in the past, there are still challenges ahead — after all, much of the enterprise technology paradigm is currently being revolutionised by the promise of cloud computing and software as a service. And some old habits will die hard.

“We used to get hammered a lot for using three letter acronyms in IT — now we solved that as we’re using five,” Kesby jokes: “CLOUD”. Some things will never change.

Image credit: Delimiter

Seven months ago when Telstra fronted a press conference to announce a flagship cloud computing partnership with IT services giant Accenture, the details about the pair’s offering were a little vague and the future of the new generation of cloud computing services in Australia was a little unclear.

At the time, both companies refused to be drawn on precisely what technology they were using to take cloud computing to customers, or what applications they would focus on. The focus in general was on the customer, rather than the offering. “We’re going into each client environment to really understand that environment, their triggers to make a move,” said Telstra Enterprise & Government chief Nerida Caesar at the time. “They each have a different reason as to why they’re heading down this path.”

It was a similar case in mid-2009 when the telco launched its partnership with Microsoft to offer the software giant’s technology (including collaboration, CRM packages and so on) to small to medium enterprise customers as its T-Suite software as a service model. Would Australian business take up the offering from a telco? The future was unclear.

Fast forward to today, with some early wins and lessons under its belt, the picture for Telstra’s cloud computing offerings is starting to firm up.

According to Telstra’s general manager of cloud services, Mark Pratley, in both of its two major cloud computing product areas, Telstra is seeing enough traction to make the offerings long-term propositions.

“What we were testing in those early days,” says Pratley of T-Suite, “was just how relevant a carrier could be in this space — how software would be delivered, from and to. What we’ve learnt is that there is certainly a place in the domestic market for that model — the businesses that are interested are showing early signs that indicate a carrier branding and positioning makes sense.”

Pratley says T-Suite for Telstra is evolving rapidly from a novelty in its business to a point where — like the half-yearly numbers it discloses around mobile phone and broadband connections — it’s a capacity, SIO-type (service in operation) growth discussion. And T-Suite is growing fast, with the executive citing 100 percent levels of growth quarterly.

It’s a similar case with what might broadly be termed Telstra’s Infrastructure as a Service offering which it launched with Accenture last year. Pratley says the company is seeing “very big adoption” from existing customers like equipment manufacturer Kohmatsu, and particularly from companies who already have relationships with Telstra for telecommunications service.

According to the executive, there’s now strong evidence and market data — Telstra’s and that of others — that the cloud computing infrastructure space will evolve into significant change for the status quo — where most large organisations manage their own technology infrastructure. For Telstra, what this translates to is a reason for the telco to look at a three to four year underlying model to invest in its cloud computing infrastructure to provision for customer growth in future.

“It’s very encouraging for us,” says Pratley about Telstra’s current cloud product suite. “If those signs weren’t there, and it was a struggle to convince people to buy, then we’d be less enthusiastic about the cloud generally.”

Lessons
So what purchasing trends is Telstra seeing amongst customers?

According to Pratley, the most popular T-Suite offerings being taken up relate to the collaboration space — hosted email and collaboration products, for example. Next after that are backup and security offerings, and last, the accounting and HR packages which come as part of T-Suite — which Pratley says have been taken up in smaller numbers and have a longer sales cycle.

The executive reasons that a number of SME customers are trialling T-Suite product lines which they understand can be delivered as a service — email and collaboration technologies — before gradually adding other products as the organisations gain in understanding and maturity.

On the Infrastructure as a Service side, Pratley is seeing a certain degree of standardisation between customers as they look to shift some of their core computing resources off the books.
Companies’ internal IT environments may have evolved in a certain way and become attached to certain suppliers of technologies, he says, but when they’re looking at outsourcing your infrastructure into a cloud, “they can reassess with a little bit more of a clear vision”. “I actually see it as a migration to a standard by default,” he says.

This means that there is “far more compliance” to the IAAS vision that Telstra is offering enterprise customers, rather than deviation from the norm. “I think the reason is that most companies at an IT level, acknowledge that the variation that they are seeking doesn’t provide any particular advantage,” he says. Having said that, Pratley notes, customers obviously don’t want to be forced to use a particular application or service.

Secondly, Pratley says the promise of the flexibility of cloud computing is delivering.

The executive cites the example of one customer who “completely changed” the dynamic over time of what Telstra was providing for it — switching a deployment of hundreds of virtualised testing and development systems around as their workload changed. In another case, Telstra’s platform enabled a customer to build a disaster recovery facility which otherwise would have been hard for it to do.

In both cases, Pratley emphasised that the functional design of what a customer deployed could be changed on the fly — a situation which would have required purchasing or getting rid of substantial chunks of hardware if the customers wanted to do it themselves.

“There’s been bar greater use by in-contract customers of flexibility than I would have thought,” he said. In general, IAAS customers were firstly trying the infrastructure out, he said, realising they had options they didn’t have before, and then deploying more products on Telstra’s infrastructure.

However, he said, despite the burgeoning levels of competition in the cloud computing infrastructure space, with companies like Optus, HP, IBM, Fujitsu, CSC and others all launching solutions over the past several years, Telstra wasn’t yet seeing formal tendering processes for cloud computing processes — more just requests for information.

“I haven’t seen one yet anyway,” he says. “I don’t think that the industry is confident enough to tender for a cloud, because they don’t really know what it is. People, I think, are still putting together the pieces of what it should be. I don’t think the language is locked down enough.”

Government and the future
One group of customers which has proven particularly tough for cloud computing service providers to crack over the past several years is the public sector — which is particularly sensitive to the need for onshore hosting. Both Victoria’s Privacy Commissioner and the Federal Defence Signals Directorate have recently warned of the dangers of cloud computing, while acknowledging that Australian government organisations were increasingly interested in shifting to the new generation of platforms.

Telstra recently made a big splash in the Federal Government arena, offering departments and agencies a free trial of cloud computing services and a chance to be comprehensively briefed in the area.

Pratley says the public sector is on the same journey, but perhaps still playing catch-up to some organisations in the commercial side of the world. The trial was taken up by a number of Canberra organisations, and the executive says he’s equally enthusiastic that Telstra’s model will work for the public sector as it appears ot be for the private — but that, contrary to only a short time ago, now government decision-makers and Telstra are now “talking in the same language”.

“To break through all of those ‘if, then, maybes, risks and issues’ takes time,” he says. “We’re well on the way to doing that.”

Overall, if you compare Telstra’s cloud journey today to where it was only last year, the telco appears to have come a long way — and Pratley is confident about the future. He notes Telstra’s cloud vision isn’t for everyone, but believes the company now has “a strong proposition which will work well for a number of years”. And most importantly, the overall market is changing.

“The inertia is not there any more,” he says. It’s time to look ahead to the future.

Image credit: Martyn E. Jones, royalty free

When renowned video game publisher Valve announced April 21 this year as the Australian launch date for the sequel to its critically acclaimed Portal title, local fans were ecstatic. After all, what could be better than getting such a highly anticipated game just before the Easter long weekend kicked in, with five whole days away from work to enjoy it?

However, as pricing on the game started to be published by various local retailers, questions started to be asked.

Questions like: Why was giant local retailer EB Games charging $88 for Portal 2, when the game could be bought directly from Valve’s digital download service Steam, for US$49.99 (AU$46.25)? Why was EB Games charging even more — in fact, more than twice as much ($108) for the Xbox 360 and PlayStation 3 versions of the game?

Even JB Hi-Fi — the king of discounting — was charging a premium for Portal 2; $79 for the PC version, and $89 for the console versions. And similar prices could be seen at other retailers. The prices were also dramatically different from those seen in the US, where Valve is headquartered. Giant US retailer GameStop, for example, was also selling the PC version of Portal 2 for just $49.99 — either digitally or via a boxed copy — while the console versions went for $59.99 each.

Spokespeople from EB Games and JB Hi-Fi couldn’t be reached last week for comment on why local prices were so much higher than in the US — or even through Valve’s Steam platform, which is accessible to Australians. But the phenomenon is not a new one — retail price increases for the local market have been a feature of the Australian video gaming scene for some time.

According to Ron Curry, the chief executive of the Interactive Games & Entertainment Association, which represents a number of large and small games manufacturers locally, there are a number of factors in general behind higher local prices for games. For starters, he said, there was the cost of getting boxed copies of games out to remote locations in Australia’s widely distributed population base.

For example, Curry said, while it may be cheap to get 100 copies of a game to a store in the Sydney suburb of Liverpool, it would cost dramatically more to get the handful of copies needed to Alice Springs, Hobart or even smaller locations like the town of Karratha in Western Australia (with a population of 11,700) for the launch day sale.

“Distribution is hellishly expensive,” Curry said — and trying to explain that fact to parent companies in the US can be “a nightmare”. Australia was fairly unique in that regard, the executive said — the distance from Sydney to Perth, he pointed out, would be akin in Europe to shipping a product from London to Moscow.

Then there’s also the cost of doing business Down Under. With large amounts of mandatory annual leave allocations, public holidays (such as the Easter long weekend just passed), superannuation, high levels of taxation, occupational health and safety insurance and more — local regulations ensured it was “very expensive” to run a company locally.

Lastly, Curry pointed out that much of the time, wholesale prices were set in the US and the UK and then imposed on Australia. If the value of the Australian dollar appreciated, Curry said, international distributors may up their price as well, to maintain their own margin on sales — with Australian retailers being caught in the middle.

One local video gamer to pick up Portal 2 last week was Ian Gardiner, the chief executive of video streaming player Viocorp. Gardiner bought Portal 2 through Steam for under $50, which he considered a fair price. “I didn’t actually look at what it cost — it was one of those ‘sub-$50, I don’t really care’ purchases,” he said.

The executive said he would have paid up to $80 for the game, but over $100 was “a bit rich”.

Would Gardiner pay more — as retailers are asking customers to with Portal 2 — for a console version of a game? “Probably,” he said, noting although he would be happier if all game distribution moved to the internet, buying games on disc for his Xbox 360 felt right. However, Gardiner noted that the price for all versions should be about the same — as development costs shouldn’t change between the three different platforms.

In general, Gardiner said the most he would pay for any game would be about $100. In comparison, he said, he took his children to see the new Thor film in 3D over the weekend. By the time his family parked and bought its tickets, the outing cost between $110 and $120 all up. “Buying a game for that price seems about right,” he said of the $100 watermark.

Even so, however, Gardiner noted if he did need to buy an Xbox game, there were other options for doing so than going direct to the major retailers on launch day. For example, he noted launch day prices would come down significantly after just a few months — and he also bought games through an online retailer on eBay, where he paid “about 20 percent less” than the big retailers would charge.

Curry said digital distribution — where games are bought and downloaded directly online through services like Steam or XBox Live — did reduce the cost of distribution, although it could vary between different business models, with the cost of doing business in Australia still hitting some.

However, he noted that in general, over the long term, game pricing in Australia had remained fairly static or even dropped a little in the long term. Brand new games had tended in the past to cost between $99 and $119, he said, whereas now they could be between $79 and $99. In one example, the eagerly anticipated Gears of War 3 game is currently available for pre-order from EBGames for $98.

In addition, Curry pointed out that the discount cycle was much faster than it used to be — with games quickly coming down in price to between $29 and $49. “We’re now in an environment where gaming is just so popular,” he said. “There’s an array of product in the market, so its quicker to push that pricing cycle down.” And some prices charged in the past would likely be considered impossible today — for example, Curry said he had recently been discussing the launch price of Mortal Kombat 3 on the Sega Megadrive — sold in 1995 for $189.

With the changing nature of distribution technology, booming video game empires on new platforms such as the iPhone and iPad and even the impact of commercial arrangements between publishers and distributors, perhaps only one thing remains certain about video game pricing in Australia — it will continue to be the subject of intense debate.

And consumers will likely continue to be on the side of standardised global pricing. “A lot of this stuff makes no sense,” said Gardiner, noting he had seen major geographical price differences in other industries — such as cycling and even sunglass retail — as well. “This whole US versus Australian pricing is becoming a joke.”

Image credit: Valve