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IT price hike inquiry kicks off: Submissions wanted

Renai LeMay — Thu, 24 May 2012 03:48:51 +0000

news The Federal Parliament’s inquiry into local price markups on technology goods and services has gotten under way, with the committee overseeing the initiative issuing its terms of reference and calling for submissions from the general public on the issue.

In late April, Communications Minister Stephen Conroy confirmed the Government would hold an official parliamentary inquiry into the issue of technology companies marking up goods and services for Australia, following a long-running campaign by Federal Labor MP Ed Husic. Husic has been raising the issue in Parliament and publicly since the beginning of 2011 (he was elected in the 2010 Federal Election), in an attempt to get answers from technology giants such as Adobe, Microsoft, Apple and others as to why they felt it was appropriate to price products significantly higher in Australia (even after taking into consideration factors such as exchange rates and shipping) than the United States.

Earlier this month, for example, global software giant Adobe continued a long-running tradition of extensively marking up its prices for the Australian market, revealing that locals would pay up to $1,400 more for the exact same software when they buy the new version 6 of its Creative Suite platform compared to residents of the United States.

In a statement issued this morning, the House of Representatives Standing Committee on Infrastructure and Communications officially confirmed it would conduct an inquiry into the price differentiation of IT software and hardware in Australia compared to overseas markets.

The Chair of the Committee, Nick Champion, said “Australians are often forced to pay more for IT hardware and software than consumers in overseas markets. The Committee’s inquiry aims to determine the extent of these IT price differences and examine the possibility of limiting their impact on Australian consumers, businesses and governments. The Committee will look into the cost of computer hardware and software, including games, downloaded music, e-books, and professional software, to name a few. The Committee is looking forward to hearing from the companies who set these prices and the consumers and businesses that purchase their products.”

The terms of reference for the inquiry, which will take public submissions until 6 July, state that it will examine:

Whether a difference in prices exists between IT hardware and software products, including computer games and consoles, e-books and music and videos sold in Australia over the internet of in retail outlets as compared to markets in the US, UK and economics in the Asia-Pacific;
What those differences are;
Why those differences exist;
What the impacts of these differences might be on Australian businesses, governments and households; and
What actions might be taken to help address any differences that operate to the disadvantage to Australian consumers.

The committee consists of Champion, Husic, deputy chair and National MP Paul Neville, Liberal MP and former Optus executive Paul Fletcher, Labor MPs Stephen Jones and Mike Symon, independent Rob Oakeshott and Liberal MP Jane Prentice. In the past Shadow Communications Minister Malcolm Turnbull has also sat on the committee as a supplementary member for a matter related to telecommunications.

In a separate statement issued this morning, Husic said: “For too long, businesses and consumers have asked: why does it sometimes cost up to 80 per cent more to simply download software in Australia compared to overseas. The problem’s been IT vendors have seemed unwilling to explain why software and hardware costs more in Australia,” he added. “This Inquiry gives an opportunity for businesses and consumers to have their say on IT prices. But it also gives IT firms a chance to educate the public on the factors they take into account when shaping their pricing approach.”

Husic welcomed the breadth of the inquiry’s Terms of Reference. “This inquiry will look into the impact on a wide range of consumers – examining the cost of IT systems for business through to the cost of music and game downloads,” he said. “This just reflects the simple fact that with technology weaving its way into our lives in so many ways, people from all walks of life should have their say on this issue. I particularly hope that small businesses and young people take the chance to make a submission and have their concerns heard.”

After the inquiry was announced, Delimiter invited global vendors Adobe, Microsoft, Apple, Lenovo and Amazon, which are some of the most visible companies selling high-profile technology goods and services to Australians, whether they would commit to attending the parliamentary inquiry if invited, and whether they had any other statement to make on the matter.
Adobe said it would cooperate with the inquiry, and Microsoft said it would review the terms of reference. However, the other companies did not respond to requests for comment on the matter.

opinion/analysis
As Australia’s technology sector and — for want of a better, less hyped word — “digital economy” gradually expands, the issue of local price mark-ups is only going to grow in importance and prevalence in the debate about the nation’s innovative future. It will be fascinating to see what comes out of this inquiry, and I am sure it will be closely followed by Australia’s technology press on a blow by blow basis. There is the chance to enact some significant change here, and I encourage all those interested to make a submission to the review.

Image credit: Chris Gordon, royalty free

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SAP’s SuccessFactors deploys Aussie datacentre

Renai LeMay — Wed, 23 May 2012 02:54:42 +0000

news SAP subsidiary SuccessFactors has opened a datacentre located in Australia from which it will sell its software as a service-based human resource management and business execution software to local customers, in one of the first known deployments of such dedicated Australian infrastructure by a global SaaS vendor.

In a statement issued this morning, the company said it “today announced the opening of its new datacentre in Australia as part of its commitment to the market and the Asia-Pacific region.” The facility will be located in Sydney and is a certified facility under the Federal Government’s purchasing guidelines, as well as adhering to relevant ISO standards.

“The Sydney datacentre will host the full SuccessFactors Business Execution (BizX) suite, including Jam, Workforce Planning, Workforce Analytics, Performance & Goals, Employee Central, Recruiting Management, Succession & Development, Compensation Management and Learning Management, which will all be delivered locally in the Australian cloud to clients throughout the Asia Pacific region – the fastest growing region for SuccessFactors globally,” the company said. “With demand for cloud-based solutions growing quickly, SuccessFactors is keen to fully expand into the market and maximise its local presence.”

“The new datacentre opening comes at a perfect time as it is designed to meet the rapidly growing hosting demands of the Australian government and local businesses customers,” said Murray Sargant, SuccessFactors vice president, Asia Pacific. “We have a very strong presence in Sydney, Canberra, Melbourne and Brisbane, so many of our customers will find it helpful to have access to a datacentre which offers premium support and optimal reliability in the country. We are committed to advancing Australia as a cloud computing hub for the region and we are very excited about the growth potential the datacentre will bring to the APAC market.”

The rollout of dedicated Australian datacentre infrastructure by SuccessFactors is a rarity in the SaaS market. Companies such as Microsoft, Salesforce.com, SAP, Google and Netsuite, which all sell SaaS-based enterprise IT services into Australia, do so from datacentres located in other countries such as Singapore, Hong Kong and the US, and have repeatedly declined to build local infrastructure.

The lack of on-shore IT infrastructure is particularly seen as limiting the ability of the public and financial services sectors — which are both large consumers of IT services in Australia — from deploying SaaS-style solutions. The issue has been repeatedly debated over the past several years.

In May 2011, for example, Victoria’s privacy commissioner issued a stark warning to government agencies about the use of cloud computing, warning that it may be “impossible” to protect personal information held about Australians when it was located offshore — or even just outside Victoria.

And in April this year, the United States’ global trade representative strongly criticised a perceived preference on the part of large Australian organisations for hosting their data on-shore in Australia, claiming it created a significant trade barrier for US technology firms and was based on a misinterpretation of the US Patriot Act.

However, where companies have deployed on-shore solutions, they have often been a success. In January this year, Oracle announced that various top Australian public and private sector entities had implemented its CRM On Demand software as a service suite, which has an Australia-hosted version, unlike many of its rivals.

Local customers who have been provisioned in the local datacentre on the Oracle CRM On Demand platform include the Victorian Department of Human Services, NSW government agency NSW Businesslink, NBN Co, AJ Lucas and Suncorp. In September 2011, Oracle had announced the rollout of the CRM On Demand platform for Telstra Wholesale. Telstra had elaborated then that it had chosen Oracle CRM On Demand because of its easy integration with the company’s existing IT infrastructure, such as Oracle’s Siebel software that helps manage billing for Telstra’s retail customers.

opinion/analysis
It’s fantastic to see SuccessFactors open an Australian datacentre; I welcome the move and I congratulate SuccessFactors on sailing against the conventional wisdom in this area. I can really only view this as a move stemming from the extreme reluctance which Australian government departments have in using offshore options. The public sector would be a key target for SuccessFactors, and it’s hard to see how the organisation would have gotten much traction in that segment of the market without local hosting.

Some will see SuccessFactor’s move as a limited test which could lead to a similar local rollout by SAP, and it’s true that the company has been considering the issue recently. But I would be cautious about making this kind of assumption. SuccessFactors has remained quite separate from the rest of the SAP business, and as I’ve previously written, the argument from SAP’s management would be that Australian customers can already buy hosted SAP services from partners such as Fujitsu and Oxygen. SAP tends to be quite a rigid organisation at times, and I would be very surprised to see the company push hard into on-shore SaaS any time soon.

Image credit: SuccessFactors

Will Telstra skip Nokia’s Lumia 900?

Renai LeMay — Thu, 17 May 2012 05:38:00 +0000

blog Australian Windows Phone blog WPDownUnder has stated that it is its “firm opinion” that Telstra will not sell Nokia’s flagship Lumia 900 handset slated to launch in Australia tonight, with the handset reported to be an exclusive to the nation’s number two telco Optus. The publication reports (we recommend you click here for the full article):

“We expect the Lumia 900 will be exclusively announced on the OPTUS network for launch … We are of the firm opinion that TELSTRA will not range the Lumia 900. On the surface, it appears their focus is in pushing 4G 1800Mhz capacity and relieving some of the arising 3G 850Mhz congestion issues they have seen”

Like similar site Ausdroid, WPDownUnder is usually right in its predictions about the availability of phones in its speciality area in Australia. Personally, I think it would be incredibly idiotic of Telstra not to range the Lumia 900; I know of quite a few readers who are waiting with great interest for the device to launch in Australia, and I expect it to sell very well. Telstra was the launch partner for Windows Phone 7 in Australia, probably has the only network which can truly do justice to the Lumia 800′s capabilities, and should definitely be on board for this launch.

One possibility is that Telstra will wait for a 4G version of a top of the line Nokia model before it jumps on board again with the Finnish company. We’ve been told that the version of the Lumia 900 that will sell in Australia will not do 4G through Telstra or Optus (just dual-channel HSDPA+), so perhaps Telstra isn’t interested in it on those grounds. Occasionally in the past (and now with the HTC One series), Telstra has lagged behind its rivals when it comes to big launches, only to launch an updated version of the same smartphone with faster network access speeds later on. This could well be the case when it comes to Nokia. We’ll know more after Nokia’s swanky launch event tonight.

Update: WPDownUnder was pretty much right — see Gizmodo’s story on the launch last night.

Image credit: Nokia

Microsoft beats Salesforce to utility CRM deal

Renai LeMay — Thu, 17 May 2012 05:20:32 +0000

news Energy retailer Australian Power & Gas has picked Microsoft’s Dynamics CRM system over rivals Salesforce.com and Right CRM as the base platform for a customer relationship management overhaul to tackle incoming email complaints.

In a statement released today by Microsoft, Redmond said the utility had recently had “a surge in its customer base” to close to 350,000 customers, which created the need for a platform to maintain and track customer records.

“Australian Power & Gas received over 10,000 customer emails over the last 12 months – relating to topics including enquiries, complaints and the retention of customers,” the statement said. “With no process in place, Australian Power & Gas was manually passing these enquires to the relevant people within the business, leading to administrative problems. As a result, the business worked with Microsoft partner, CSG, to implement Microsoft Dynamics CRM to handle all of its electronic correspondence, improve its processes and ensure better customer service.”

Australian Power & Gas also evaluated competing CRM vendors Salesforce.com and Right CRM, but ended up going with the Microsoft package due to the “return on investment and ease of use”, according to Microsoft. Australian Power & Gas, CIO, Joseph Gullotta, said: “The Microsoft Dynamics CRM system is a platform that is very stable, customisable, and empowering, allowing us to take all the complexity out of what can be a very complex environment.”

“Profiling and understanding our customers is important to Australian Power & Gas which is why the CRM component has been so useful. Microsoft Dynamics offered us the versatility needed to program and change the environment to handle emails as a workflow activity. Allowing us to track, escalate and respond to each individual enquiry in a timely manner has given Australian Power & Gas an edge over our competitors,” said Mr. Gullotta.

“Moving forward, Australian Power & Gas’s data warehouse built on Microsoft SQL Server R2 is a key focus, particularly the data the business is incorporating into the warehouse,” Microsoft’s statement said. “The business is now starting to reap the rewards of the warehouse which is why it’s looking at expanding this area in support of its business intelligence, reporting and analytical capability.” Added CIO Gullotta: “We’re putting more work into our data warehouse so the ability to gather and use more information has been great.”

The news comes as it remains unclear how strong Salesforce.com’s current levels of success are in the Australian market. Several of its major rivals, including Oracle and Microsoft, have recently announced major Australian customer wins for their CRM platforms, but Salesforce.com has not.

Oracle announced in January that various top Australian public and private sector entities had implemented its CRM On Demand software as a service suite to upgrade customer service, gain access to real-time analytics, and enable speeding up of adaptive business planning. According to a statement issued yesterday by Oracle, local customers who have been provisioned in its local datacentre on the Oracle CRM On Demand platform include the Victorian Department of Human Services, NSW government agency NSW Businesslink, NBN Co, AJ Lucas and Suncorp. In September 2011, Oracle had announced a rollout of the CRM On Demand platform for Telstra Wholesale.

Some of Microsoft’s recent Australian customer wins for its Dynamics CRM platform include Curtin University Coffs Harbour City Council, Tim Davies Landscaping, Capital Transport and Relationships Australia.

Even smaller Australian competitor Technology One has been signing up major new customers for its CRM package. Among the customers signing up for the latest release of the TechnologyOne software are Mission Australia; the New Zealand Ministry for the Environment; TePou, through Wise Management Services; Tasrail; the Tasmanian Department of Health and Human Services; and other Australian government organisations.

However, Salesforce.com has not recently disclosed any significant Australian wins for its various platforms, including its CRM option. In mid-June, the company is expected to discuss its local fortunes and disclose new customers as part of its annual Cloudforce conference, which will be held in Sydney on 14 June.

opinion/analysis
The most interesting thing about Australia’s enterprise CRM market at the moment is how the traditional vendors – Oracle, Microsoft and others – appear to be making hay while Salesforce.com’s sun appears to be dimming.

If I was an IT manager in a commercial enterprise, I would be loathe to put a new Microsoft or Oracle CRM platform in at the moment. While both are good options technically, Salesforce.com has historically been the leader technologically in the software as a service cloud deployment model, and there aren’t a huge number of reasons not to deploy CRM platforms into the cloud at the moment, in my opinion.

But we’re just not hearing much from Salesforce.com in the Australian market at the moment. The company has been quiet for about 12 months now, at a time, when its rivals – even including the smaller Netsuite – have been very active in the market. I would have expected to have heard about some huge Salesforce.com deployments locally by now, as well as some innovative uses of its smaller software chunks – Chatter, Radian6, Force.com and Heroku. But the buzz around the company has died down to almost nil recently.

Is Salesforce.com actually doing really well in Australia, but just not talking about it, while the other vendors are? Perhaps, but not likely. The company has historically been quite open and transparent.

My gut tells me that Salesforce.com is struggling to convince Australian enterprises of the value of its solutions, in the face of offerings from the likes of Microsoft and Oracle, which not only have on-shore deployment models as well as off-shore SaaS platforms, but also have wider ecosystems. As Australian Power & Gas’s CIO said bluntly in this interview this week with iTNews, the company tries to go Microsoft whenever possible. And for customers who already had Oracle ERP, financials, HR, databases and so on, the same would often be true for the company’s CRM platform.

Of course, much of this is speculation. We’ll likely find out more about how Salesforce.com is doing in Australia over the next month as it Cloudforces it up in Sydney. Personally I hope the vendor is just playing its cards close to its chest and has some mega deployments it’s planning to spill shortly. But only time will tell.

Image credit: Microsoft

Three lessons ING’s private cloud teaches us

External Contributor — Tue, 15 May 2012 05:25:31 +0000

This sponsored post is written by Phil Goldie, Business Group Lead at Microsoft Australia. Click here to find out more about Microsoft’s private cloud solutions.

sponsored post If you could provision a new copy of your organisation’s entire internal application environment for development purposes in just ten minutes, and you could do whatever you liked with it, what sort of new systems and processes would you build?

That’s the question which ING Direct’s team of software developers are now facing, after the bank successfully (with the assistance of Microsoft, Cisco, NetApp and Dimension Data) implemented a private cloud solution to virtualise its entire banking platform. Combined with automated deployment tools, what this means is that the bank is literally able to provision a new copy of itself — a so-called ‘bank in a box’ — within minutes.

Now, I don’t want to go too far into detail about that deployment for this blog post; it’s already been comprehensively covered in articles on iTNews, The AustralianIT and Delimiter, as well as in a case study produced by Microsoft.

However, what I do want to do is start a bit of a discussion around what the implications are for other major organisations from this new style of deployment, and why it’s so different from the kind of advanced virtualisation or Infrastructure as a Service solutions which are what we’ve mainly been talking about in Australia over the past several years, when we talk about the term ‘private cloud’. With this in mind, here’s three things we can learn from ING’s recent private cloud deployment.

1. The cloud argument isn’t always about cost

ING Direct’s private cloud rollout wasn’t about taking cost out of the business, which is often the argument around cloud computing. Instead, it was a project driven to address a higher level business issue.

ING Direct’s basic problem was that it had a team of developers which wanted to innovate: Fixing bugs, developing new online banking features, and launching new customer applications. To do so, those developers needed development environments that were segregated from the bank’s production systems. ING Direct was capable of deploying such environments. But, given the complexity and interconnectedness of any modern banking platform, it used to take three months and eight full-time staff to deploy them. Not exactly an ideal situation.

This had created a situation where the bank’s ability to innovate and progress its systems had become stifled, with an extensive backlog of development work pending. It wasn’t easy, but through its private cloud deployment, the bank was able to get around that issue and provide a new copy of its platform to any developer who wanted it. This unlocked ING Direct’s ability to be agile and innovate; it sped up its time to market. Consequently, the project was viewed internally as a strategic business enabler, and received top-level executive support right throughout its life, rather than being viewed merely as another infrastructure project.

2. It’s OK to think big

Every time ING Direct provisions a new ‘bank in a box’ for a developer, it switches on around 220 new virtual machines in total, and duplicates around 5.5 terabytes of data. IT departments are now pretty much used to the concept of provisioning new virtual machines — even dozens of them — and allocating storage to them. But hundreds of new virtual machines? Every time a developer needs a new testing environment? Most IT managers would run in horror from such a concept. To many, it would seem like using an axe to fix a problem requiring a scalpel.

But when you consider how much effort it took ING Direct previously to stand up testing environments of this nature, the axe starts to look like a good idea. The reason this is possible is the increasing maturity of automation tools like Microsoft’s System Center 2012, which let you provision large numbers of new virtual environments in a much more streamlined fashion than was previously possible.

Right now, a new class of ‘workflow’ or ‘automation’ developers are emerging, who are building solutions on top of platforms like System Center. Their work is unlocking the value of such automation tools in sizable environments so that others can make full use of them. This means that it’s becoming increasingly possible to provision very complex environments — such as a whole ‘bank in a box’ — in an automated fashion. This would have been unthinkable only a few years ago.

3. Focus on where the pain is

Now sure, not every company has a whole banking platform sitting in their datacentre, and a team of several dozen developers who need to test against it. But there are still immediate implications from ING Direct’s style of private cloud deployment for many other types of organisations, both in Australia and globally.

In the manufacturing and retail sectors, for example, IT organisations are struggling with similar questions regarding development around their enterprise resource planning (ERP) platforms. Many government organisations operate giant databases and record-keeping systems which need to interface with each other and with the private sector. In telecommunications, it’s often billing and provisioning systems which sit at the core. Dynamic education environments such as universities sometimes have to stand up new systems in only a short period as a new campus or faculty opens, or as a new wave of courses come online.

In all of these sectors, there are times when laborious work regularly slows down organisations’ time to market. In ING’s case, it was provisioning new development environments. In other sectors, the business might have different requirements, such as provisioning a new environment for a new brand, geographic storefront rollout, or product launch. In all of these areas, automation might be able to save effort and cut the time to market. But in each case, focusing on where the pain is will help elevate the conversation around private cloud deployments beyond a discussion about IT infrastructure and towards one about direct business benefits.

Often, as was the case with ING Direct, early successes in this area can also unlock future projects. The bank’s successful private cloud rollout in Australia has stimulated an internal conversation about how the technology can be deployed globally. And it’s also looking at how it can further automate other internal applications and processes, taking advantage of the techniques it’s already developed with its banking platform. It’s this kind of ongoing revolution that cloud computing should be all about.

What good examples of cloud deployments have you seen in Australia? What do you think are the most interesting aspects of cloud computing? Click here to find out more about Microsoft’s private cloud solutions.

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NSW agencies push very hard for SaaS rollouts

Renai LeMay — Mon, 14 May 2012 05:12:44 +0000

news Several major New South Wales Government agencies have unveiled major and wide-ranging plans to imminently purchase Software as a Service-style IT solutions, in moves which have the potential to re-cast the dynamics of the perceived relationship between Australia’s public sector and the burgeoning class of SaaS-delivered IT packages.

Australia’s public sector has in the past notoriously been averse to purchasing IT solutions which are delivered as a service.

While pure play SaaS vendors such as Salesforce.com, Google, Netsuite and others have experienced a solid level of success in various aspects of Australia’s private sector with their solutions, which are typically delivered through a web browser rather than hosted on a customers’ premises, the fact that most such services have been hosted offshore has prevented such companies from making strong in-roads into Australian governments at any level — federal, state and local. Similarly, companies such as Microsoft, Oracle and SAP which offer both SaaS and on-premises models have continued to see strong public sector demand for their traditional solutions, with only slow uptake of their SaaS options.

However, if the NSW Government has its way, much of this may be about to change. Over the past few months, several major NSW Government agencies have kicked off large IT purchasing initaitives which specifically highlight a preference for SaaS solutions, as opposed to on-premises deployments.

The most recent of these tendering initiatives was kicked off in late April by the NSW Department of Trade and Investment, one of the new super-agencies, or ‘department clusters’ created when the new Coalition NSW Government won power in March 2011. In tender documents released in April, the department revealed that the creation of this new umbrella department brought together a range of “disparate systems, data and shared services provision”. “As a result,” it added, “NSW Trade and Investment is carrying significant operational risk such as effective controls, audit compliance, lack of informed decision-making capability and inadequate reporting.”

Because of this, the department wrote, it wanted to source a new overarching enterprise resource planning system, with a target date for implementation of December 2012. “The purpose of the project is to provide a prerequisite minimum capability and technology platform to integrate people, processes and technology into the new whole of cluster mode of operation,” it said. The rollout will affect some 7,000 total staff.

In the past, such initiatives would generally have been rolled out as on-premises solutions, with companies like Oracle and SAP providing the technology and integrators like IBM, Fujitsu, HP or others doing the leg work. However, in this case the department noted it specifically wanted a SaaS platform. “A SaaS ERP solution has been identified as the preferred model to transition NSW Trade and Investment to a single integrated platform,” the tender documents state.

Across town, another NSW super-agency, Transport for NSW (which was formed from the merger of the NSW RTA, maritime, transport construction authority and Country Rail groups) is also currently talking to the industry about SaaS packages.

The tender documents have now gone offline, but an article by ZDNet.com.au details the fact that in March, the agency went to the market with a proposal to abandon in-house infrastructure and migrate 35,000 email accounts, 25,000 desktop environments and some 2,000 BlackBerry devices to new systems, all labelled “as a service”. ZDNet quoted Transport NSW’s tender documents as follows:

“The group CIO is actively promoting a strategy of ‘as a service’, recognising the potential for leveraging the economies of scale and expertise of the private sector in the delivery of core technology platforms and capabilities to government.”

According to the NSW Government’s tendering site, a large group of IT suppliers have responded to the request. The companies who are interested are: AC3, Capgemini, Citrix, CPW Group, CSC, Data#3, Datacom, Dell, Dimension Data, Ethan Group, Fujitsu, HP, Housley Consulting, IBM, Microsoft, Mnet, NEC, Optus, PolicyPoint, SAP, Satyam, Sybase, Telstra, UXC and VMware.

The ZDNet article doesn’t mention whether on- or off-shore hosting is a key issue for Transport for NSW, but there is no doubt the organisation will consider the location of data hosting during its procurement process. However, if the organisation takes its lead from the NSW Department of Trade and Investment, location may not turn out to be such a headache.

In the tender documents associated with its SaaS ERP procurement effort, the NSW Department of Trade and Investment specifically explores the issue of data hosting. And there is a great deal of good news for vendors with offshore datacentres. The department notes that vendors will need to provide details of their arrangements for data hosting, including the “data storage location”. However, it also mentions that vendors should detail “options for data replication in Australia”.

This is a small, one-line clause in the department’s document, but in the wider debate about Australia’s public sector hosting data offshore, it’s an important clause. It appears to reveal that the NSW Department of Trade and Investment is working under an assumption that data will be stored offshore in an SaaS ERP scenario, with data being replicated in Australia for backup and other purposes.

This approach marks a sharp departure from the general approach taken by Australia’s public sector; which has been characterised in the past by a strong desire for data to be hosted onshore, within Australia’s legal jurisdiction. If the NSW SaaS projects are successfully rolled out over the next year, this may provide the stimulus for agencies in other jurisdictions to deploy similar SaaS projects.

The news comes as the NSW Government a little over a week ago revealed a new wide-ranging ICT strategy, which it said was slated to make it “the leader in ICT” when it came to public sector service delivery and the development of the state’s technology sector as a whole.

The strategy does mention that the state is planning to create dedicated ‘service catalogue’ of corporate IT services which departments and agencies will be able to purchase from in a standardised way, and it also mandates the implementation of virtualisation technology in all government agencies, and the development of a trusted Government private cloud. However, it does not explicitly mention the kind of software as a service solutions which Transport for NSW and the Department of Trade and Investment had already gone to tender for.

opinion/analysis
To say that I am surprised to see these kinds of SaaS-style initiatives and open-minded thinking about offshore hosting coming from within the normally slow-moving and traditionally-minded NSW Government is an understatement. The new Coalition State Government has clearly already had a major impact on how the state is running its IT operations, and this is something to be praised.

There is no doubt that the SaaS initiatives within NSW will be very closely watched by the CIOs and line of business decision-makers of other jurisdictions. The NSW departments concerned have set themselves some pretty sharp timelines for their projects, and in particular I don’t believe the SaaS ERP platform can be delivered in the timeframe which has been set for it. However, if the projects go well, they will be viewed as visionary examples of SaaS solutions being implemented in state government, and probably replicated to a certain extent elsewhere.

Are we beginning to see the cracking of the locked down control attitude which Australia’s public sector has had towards offshore hosting? Well, it’s a little early to call. But it certainly is fascinating to see things being shaken up in this manner. It will be even more fascinating to re-examine the situation 12 months down the track.

The other thing which I think is fascinating about these SaaS deployments do not appear to be about cost. And, although this will also be a benefit if they are successful, they do not appear to be about agility. What these deployments appear to be about is avoiding the disastrous problems which state governments in Queensland and Victoria appear to be suffering when it comes to IT projects. Right now, as I have written many times, Australian state governments do not appear to be capable of successfully managing IT projects, maintaining their IT infrastructure, securing their systems or managing vendors.

What NSW’s SaaS efforts appear to be based on is realising this fact; the departments concerned appear to be recognising that IT is not their core capability and that they want external specialist organisations to take care of the whole kit and caboodle for them. The tendering initiatives detailed in this article go beyond managed services or traditional outsourcing. They represent attempts by government departments to simply hand off whole chunks of their IT platforms to outside vendors.

Now, everyone has their problems with vendors, and these departments will need to establish very strong governance controls over their eventual partners in these areas to make sure they don’t screw everything up. Vendors will be vendors, after all. But overall, given the ridiculously incompetent way in which most Australian state governments appear to be managing their IT platforms at the moment, I can’t help but see what NSW is doing right now as overwhelmingly positive.

Aussie non-profits adopt Office 365 en-masse

Renai LeMay — Fri, 11 May 2012 02:26:33 +0000

news Non-profit Australian organisations such as charities are adopting Microsoft’s Office 365 Software as a Service platform in large numbers, according to non-profit technology enablement group Infoxchange, which has recently helped 20 such organisations shift into Microsoft’s cloud.

In a statement co-released with Microsoft yesterday, Infoxchange said the shift to the cloud had enabled the not-for-profit (NFP) organisations to lower their IT costs, increase productivity and strengthen the communications they had with their partners, stakeholders and donors. The organisations have benefited from special charity pricing for Office 365, which Infoxchange has negotiated with Microsoft and its Australian partner Telstra.

David Spriggs, General Manager, Infoxchange said: “Many organisations in the public, private and charitable sectors have seen that cloud computing has opened new opportunities for them to better achieve their missions and accelerate their impact. We’ve seen NFPs dramatically improve their operations through cloud technology enabling them to do what they do best – positively impact people’s lives – but more effectively, efficiently and at less cost.”

Two such organisations to have shifted into the Microsoft cloud are Brainlink Services, a Victorian organisation which is devoted to helping residents affected by brain condictions, and Leisure Networks, another Victorian group devoted to working in partnership with the community sport and recreation sector to ensure access to recreation and physical activity for all residents.
“Office 365 has empowered our staff members to forget about technology and get on with their jobs,” said Vanessa Marrama, Communications Manager, BrainLink Services. “We don’t rely as much on our in-house IT support because the cloud has proven to be so reliable and user friendly.”

“Office 365 has enabled us to future proof our investment and provide a secure, easily accessible way to bring together our information and communication systems,” added Rob McHenry, Chief Executive Officer of Leisure Networks. “What is important to us is to have an easy to use system and central place for all the information we need when we are working from our main office, at home or somewhere around regional Victoria.”

Some of the key benefits which the NFP organisations are deriving from the shift to Office 365 included access to the platform from home or via mobile devices (with NFP staff often working away from their head office), reliability, manageability and cost aspects of Office 365 (most smaller NFPs do not have a dedicated IT team), the ability to access document management and collaboration tool Sharepoint, often for the first time, and access to data in emergency situations, such as during floods.

In addition, organisations are also benefiting from access to shared calendars and online meetings.

The news isn’t the first time Microsoft has been publicly known to be involved in Australia’s NFP/charity sector over the past year. In March, the company revealed it would give a $10 million grant to the Australian Red Cross to modernise its infrastructure. The group last upgraded its IT systems in 2002 and had been running on outdated infrastructure.

opinion/analysis
Of course, while the pair do have some altruistic motives, Microsoft and Telstra aren’t involved in this kind of initiative totally out of the goodness of their hearts. In Australia over the past several years, software as a service suites such as Office 365 have had their most success in deployments where organisations often need to provide IT infrastructure to people such as students who need to access such IT resources but may not need the kind of full-on desktop enterprise support which is so standard in large enterprises such as banks and government departments.

The non-profit sector is another example of this kind of deployment. These organisations typically need quite standardised IT infrastructure, they often have a lot of workers who commit part-time hours, work from home, change roles relatively frequently and so on. Because of this, and their lack of resources in general, productivity suites delivered online are going to be a very quick and easy solution for these groups to get access to decent IT infrastructure.

Along the way, Microsoft and Telstra get the chance to entrench a whole sector with their values and working habits; habits that often cross-over into the commercial or public sectors. This is the kind of deep seeding initiative which will ensure Microsoft’s dominance over Australian desktops for decades to come, and which will help drive acceptance of the SaaS model as a valid one in much larger organisations.

Why do Australians pay more for Office 365?

Renai LeMay — Thu, 10 May 2012 03:33:16 +0000

blog A great analysis piece was published on local cloud computing media outlet BoxFreeIT last month on why Australians pay more for Microsoft’s Office 365 software as a service suite. It goes through various issues such as the exchange rate (and Microsoft’s internal exchange rate), taxes, support, Telstra’s support and sales costs, billing, the partner channels and so on.

The author of the article, Microsoft Office 365 MVP Loryan Strant, outlines his thinking on the issue further on his personal blog, The Cloud Mouth:

“Like many Microsoft partners I agree that the price of Office 365 is substantially high when compared to that of the rest of the world. I have to explain this to about 10% of prospective customers that I speak to. The difference between myself and many of the other partners “selling” Office 365 is that I can explain why the price is higher using logic and reason … and facts. How did I get these facts? I asked. They made logical sense to me.”

You can find more information on Microsoft’s Office 365 pricing markups last year here. The company, along with its partner Telstra, has, however, recently cut its Office 365 prices in Australia, in line with similar international cuts. I don’t buy Strant’s argument on this front entirely, but his thoughts do make for interesting reading in the context of the Federal Government’s plans to hold an IT price hike inquiry shortly.

Image credit: Microsoft

Rackspace promises Aussie datacentre

Renai LeMay — Tue, 08 May 2012 07:51:45 +0000

blog If you talk to US-based companies about hosting providers, they’re likely to rabbit on and on about the unholy dominant duo of the US market: Amazon and Rackspace. Amazon. Rackspace. Rackspace. Amazon. It gets to be a bit repetitive at times. If you’re not with one, you’re with the other. Or both. And now both are (reportedly) expanding into Australia.

Like Amazon, Rackspace recently opened an Australian office and starting hiring local staff. Like Amazon, Rackspace has already notched up some Australian customers. And also like its eternal rival, Rackspace’s appeal to Australian customers has been somewhat limited by the fact that it doesn’t have any Australian infrastructure. But as iTNews reports today (we recommend you click here for the full article), all that may be about to change, as Rackspace follows Amazon in yet another way: Australian infrastructure. The publication quotes Rackspace chief operating officer Mark Roenigk:

Roenigk told iTnews this week that an Australian data centre was “a possibility in the next year”. “As you know, we have a sales office in Australia, and we will open a data centre in Australia in the next 12 to 18 months.”

Now Rackspace is a little more than a pure hosting company. I would say that, like a handful of companies in Australia such as Hostworks, the company doesn’t really specialise in the commodity web hosting hosting space but pushes up more towards the premium area; delivering managed service and cloud-computing type services, and even Software as a Service platforms such as Sharepoint.

If it does invest in its own datacentre infrastructure in Australia (probably becoming a tenant in a facility such as that offered by Global Switch rather than deploying its own physical facility, it could become a strong local player; bringing a maturity to the hosting and cloud infrastructure market which is still somewhat lacking locally, with most rival companies in the space still gradually working out the technology back-end to make this kind of service scalable.

Of course, we’ve heard various promises and speculative hints about Australian datacentres from a number of global companies over the past few years. There was Amazon.com. There was Salesforce.com. There was Netsuite. And even Telstra has expressed its desire to host Microsoft cloud infrastructure on shore. None of this has eventuated so far; it will be interesting to see whether Rackspace can be the global cloud provider to break the trend. We await the outcome with bated breath.

Image credit: Whrelf Siemens, royalty free

Vendors unimpressed by IT price hike inquiry

Renai LeMay — Tue, 08 May 2012 05:30:36 +0000

news A number of global technology vendors likely to be hauled before Australia’s Parliament to justify their local price markups have grudgingly and briefly signalled their acceptance of the proceedings and willingness to participate, although some have completely refused to comment on the issue.

Husic (pictured right) has been raising the issue in Parliament and publicly since the beginning of 2011 (he was elected in the 2010 Federal Election), in an attempt to get answers from technology giants such as Adobe, Microsoft, Apple and others as to why they felt it was appropriate to price products significantly higher in Australia (even after taking into consideration factors such as exchange rates and shipping) than the United States.

Just last week, for example, global software giant Adobe continued a long-running tradition of extensively marking up its prices for the Australian market, revealing that locals would pay up to $1,400 more for the exact same software when they buy the new version 6 of its Creative Suite platform compared to residents of the United States.

“Adobe Systems will co-operate with any parliamentary inquiry as required,” said an Adobe spokesperson. “We are not making any further statement at this time.”

Microsoft is charging Australian software developers about 83 percent more than their US counterparts to access subscription services associated with its Microsoft Developer Network (MSDN) platform, and also charges higher prices for software products and cloud computing offerings.

A spokesperson for the Redmond, US-based company said: “Microsoft will review the Parliamentary Committee’s terms of reference when available and will respond to the Inquiry.”

Lenovo and Amazon are both represented in Australia by the public relations agency Text100. The company acknowledged the receipt of queries on the matter of the price inquiry, but did not respond with comments on the matter. Spokespeople for Apple did not acknowledge the receipt of Delimiter’s queries and did not issue a comment on the matter.

PC manufacturer Lenovo has in the past attempted to defend of its Australian pricing, despite in 2011 launching its flagship new ThinkPad X1 laptop in Sydney for$560 more than the same hardware will cost in the United States. Apple also commonly charges more for its products in Australia, although the company has made some moves towards international price harmonisation over the past year. Amazon’s prices are the subject of less complaints by Australians than the other vendors mentioned in this article, but price differences on the company’s extremely popular eBooks offerings do exist, despite the content being the same between jurisdictions.

The Australian Competition and Consumer Commission (ACCC), which has indicated that it is following the issues the IT price hike inquiry is raising, is also interested in the eBook issue. In mid-April, the regulator noted it was considering its options on the issue of eBook pricing, following a lawsuit filed by the US Justice Department against Apple and five global book publishers on the issue of price fixing.

opinion/analysis
I am disappointed in the muted reaction which we’ve seen from these massive technology vendors on the issue of IT price hikes in Australia so far. This is an issue for the entire technology sector to ponder, and we really need these companies to be open and honest about how they set pricing so the debate on the issue can be on an honest grounding.

It is possible that the parliamentary inquiry approved by Conroy will broadly find that vendors such as Adobe and Microsoft have been doing nothing wrong when it comes to their Australian pricing, and that their honest testimony will vindicate their actions. We need to keep an open mind with respect to this possibility. But the unwillingness of the vendors to comment on the issue will only lead to an impression that they have something to hide.

Image credit: Still from Gladiator