Delimiter » qantas

NBN no CommBank or Qantas, says Hockey

Renai LeMay — Thu, 17 May 2012 01:35:43 +0000

news Shadow Treasurer Joe Hockey has taken an axe to the Federal Government’s budget treatment of its National Broadband Network project, arguing that NBN Co is not an asset like previous government-owned companies such as Qantas or the Commonwealth Bank, which were eventually successfully privatised.

In a post-budget address to the National Press Club this week, Hockey said that one of the reasons why Government debt kept rising while the budget was “supposedly” in surplus was that spending on the NBN and other projects such as the Clean Energy Finance Corporation were “off-budget” and financed through increased Government borrowings. “If both entities are treated on budget then the $1.5 billion surplus forecast for next year would be a $4.3 billion deficit,” Hockey said. “Add in the $8 billion of money shuffles and the deficit would be $12 billion.”

According to a research note recently published by the Parliamentary Library of Australia last year, Labor is technically correct to account for the NBN on this matter, and the Coalition is wrong.
“Australia has adopted internationally accepted accounting standards, and these are applied in the budget treatment of the NBN,” the library’s Brian Dalzell, who works in its economics division, wrote in the report (available online here in PDF format). “While the applied accounting treatment depends on the specific transaction conducted between the Government and NBN Co, this treatment is governed by accepted accounting standards and is applied equally to all government business entities (GBEs). This treatment is not determined by the return generated by NBN Co (or any other GBE).” The NBN’s long-term return is currently projected to be between $1.93 billion and $3.92 billion.

But Hockey said he didn’t accept this explanation for the NBN’s budget treatment. “The Treasurer says this is normal accounting but the $50 billion NBN and the $10 billion CEFC are not “normal”,” he said in his speech. “Their size and asset quality are not on a par with a Qantas floated for $2 billion, Commonwealth Bank floated for $8 billion, or Medibank Private valued at around $4 billion.”

“Nor is their asset quality the same. For example the CEFC is offering taxpayer funded credit for green projects where the banks will not … and on this basis it does not seem a good business proposition. And the business case for the NBN is so poor that the government refuses to have a cost/benefit analysis.”

Hockey said if the Coalition won government, one of his earliest administrative tasks to improve public finances would be to “meet with senior public servants to identify the real commercial value of the NBN and the Clean Energy Finance Corporation and their treatment in the Budget”.

However, Communications Minister Stephen Conroy didn’t take Hockey’s comments lying down, issuing his own statement following the Shadow Treasurer’s speech. “The Coalition has won the trifecta for economic illiteracy in their claims that the National Broadband Network should be treated as spending in the budget,” Conroy said.

“In his National Press Club Speech, Mr Hockey has once again shown he is unfit to be in charge of the nation’s finances. Mr Hockey not only masterminded the Coalition’s pre-election costings debacle – where the firm hired by the Coalition to audit its election promises was later fined and reprimanded for unprofessional practices – but now he wants to ignore international accounting standards.”

“The NBN is an investment in an asset from which the Government will receive a return. It is classified by International Accounting Standards as an equity investment rather than a budget expense. This is consistent with long-standing budget treatment applied by this and previous Australian Governments. Instead of wilfully misleading the public, the Coalition should support Labor’s NBN, which will provide fast, reliable, and affordable broadband to all Australians, regardless of where they live.”

opinion/analysis
As I have previously written, I believe Conroy is factually correct in his assertion that the NBN’s costs should not be on-budget as an expense. The facts of the matter are that the NBN is expected to make a return, and the government’s funding of the project is not an expense, for accounting purposes, but an investment. The Coalition has wilfully ignored the fact that even if the NBN makes a loss, that loss will not represent the entire cost of the project, but only its revenues minus its costs. Furthermore, the Coalition has not presented any analysis for what it estimates that loss might end up being.

In this sense, the Coalition’s continual claims that the NBN should be included in the budget papers as an expense appear to be quite ridiculous. If the Government did include the cost of the NBN in the budget as an expense, then later on, when it started making money from the NBN, it would then need to include those revenues as well. Frankly, this isn’t how accounting works, to my mind, and, it would appear, the mind of the Parliamentary Library, which produced a detailed paper on the issue.

I also want to address Hockey’s comments about NBN Co not being similar to Qantas and the Commonwealth Bank.

Frankly, NBN Co is the very definition of a company which is similar to Qantas and the Commonwealth Bank. And I note that there is a third company which Hockey should have included in that comment, but chose not to — another company which was also very similar to the first two and even more similar to NBN Co, because it also rolled out a national telecommunications network with government funding. A company which was also highly successfully privatised and made a stack of cash for the government in the process, and continues to make stacks of cash for its shareholders.

I speak, of course, of Telstra.

The Government’s creation of a national fibre broadband network is directly analogous to the creation of value inherent in Telstra, the Commonwealth Bank and Qantas, and my personal feeling is that this fibre infrastructure will end up being more important than any of these three companies to the long-term future of the Australian economy.

I think if we look ahead 30 years or more — and bear in mind that this time scale is “normal”, compared with the Qantas, CommBank and Telstra examples — the NBN infrastructure will continue to be worth an incredible amount to Australia, and my feeling is that the return on its investment will continue to grow over time. The estimates of NBN Co’s long-term value which we currently have, in my view, are quite conservative estimates and don’t reflect the way that financiers and the sharemarket will view the company in three to four decades.

I think at that time, the Government of the day may find that the private sector is willing to pay a very pretty penny for a well-established national company with a giant fibre network and a monopolistic grasp on its sector, with guaranteed customers. A very pretty penny indeed.

Image credit: Office of Joe Hockey

In-flight Internet: Qantas’ failure to launch

Navina Anand, Chillibreeze — Fri, 09 Mar 2012 00:20:41 +0000

news Qantas, Australia’s biggest airline, has announced a new trial run of in-flight Internet connectivity on its superjumbo A380 for passengers on intercontinental flights between Australia and the United States. But it’s not the airline’s first attempt to bring in-flight connectivity to its passengers; in fact, Qantas has repeatedly struggled with the issue over the past decade.

In a statement this week, Qantas said six flights have been equipped with Internet technology on the Sydney-Los Angeles, and Melbourne-Los Angeles routes. Alison Webster, executive manager customer experience of Qantas, said customers would be able to access the Internet through their Wi-Fi-enabled devices such as laptops, iPhones, ipads, and BlackBerrys for the very first time.

The eight-week trial would give customers the opportunity to access the Internet in exactly the same way as a terrestrial Wi-Fi hotspot in which customers paid with their credit card to use the email, and surf the Internet, Webster said. OnAir provides the connectivity service using Inmarsat’s SwiftBroadband and global satellite-based connections, to transfer data between airborne passengers and the ground.

This trial, initially open to customers travelling First Class and Business Class, would help Qantas determine its connectivity options, and evaluate the possibility of using next generation communication platforms. Webster said that Qantas was the first airline in the world to conduct a trial of Internet services on direct flights between the US and Australia. “Over the past week Qantas has conducted some preliminary testing and is pleased to now trial the service with customers flying between Australia and Los Angeles,” Webster said.

It is only towards the end of last year that United Airlines announced its intention to have the Internet on its intercontinental flights, though domestic flights in the US had been offering the Internet for a couple of years now. At the end of 2010, Lufthansa had launched Wi-Fi on select North Atlantic routes as a beginning, before expanding to all their intercontinental routes.

Qantas was the world’s first airline to offer in-flight iPads loaded with movies, shows and music to its passengers including those in economy class, on the 767-300. Qantas used a central server on board to stream content to specially configured iPads. Interestingly these would stop working once the aircraft touched down.

However, it’s not the first time Qantas has attempted to bring in-flight Internet to its passengers. As early as 2003, as aircraft manufacturer Boeing kicked off a trial of in-flight Internet, Qantas said it was investigating in-flight email and Internet connectivity on international flights. “Qantas will therefore be watching the trial with interest,” a spokesperson for the airline told ZDNet.com.au at the time.

For several years the idea went nowhere, but by 2006 the idea had been revived at Qantas, with the airline using its website at the time to announce that it would offer in-flight Internet when it started flying its new fleet of Airbus A380 planes. At the time, the timing for Qantas’ launch was to be mid-2007.

By 2007, however, that time frame had been pushed back again to August 2008. In July 2007 Qantas announced again that it would bring wireless Internet to customers flying on its A380s. In March 2008 — although International customers still hadn’t received in-flight Internet services at that point — customers flying on domestic routes with Qantas got some hope that the airline would implement the feature on in-country flights, with the airline announcing at the time that it would introduce in-flight Internet through a mobile base station, that would allow mobile phones to access the service.

It’s not clear what happened to those plans, but Qantas certainly doesn’t encourage customers in 2012 to use their mobile phones on its planes, domestic or international. And in September 2008, the airline abandoned long-held plans to bring Internet to its international routes using the A380 craft. No real reason was given by the airline at the time, and the issue has remained fairly dormant since that time, despite the continuing interest from passangers in in-flight Internet services and the availability of such services in countries such as the US.

opinion/analysis
I will be surprised if Qantas ever manages to get in-flight Internet off the ground. The airline has been struggling with the issue for the past decade, has conducted a clutch of trials in the area, but has never quite managed to get this apparently simple technology to work well.

I regularly hear from readers who have travelled in the US on in-country flights and who have been extremely surprised to learn that in-flight Internet “just works” on some carriers there. This experience suggests that Australia’s national airline simply hasn’t been trying hard enough to bring this in-demand feature to Australia. Isn’t about time Qantas got in-flight Internet off the ground?

Image credit: Qantas. Opinion/analysis and Qantas history lesson by Renai LeMay.

Virgin Australia provides in-flight Galaxy Tabs

Nayantara Mallya, Chillibreeze — Mon, 27 Feb 2012 23:43:25 +0000

news Airline Virgin Australia has revealed plans to use Samsung’s Android-based Galaxy Tab 10.1 device to launch Phase I of its new in-flight entertainment system on most of its Boeing 737 and Embraer E190 aircraft in April 2012. Business Class guests on all sectors will be able to use the Galaxy Tab while Economy Class passengers taking flights over three hours will have access to the device.

The move comes as a response to customer demand for comprehensive in-flight entertainment on these longer sectors. In a statement on the airline’s website, Martin Daley, group executive product and guest services said that the Samsung Galaxy Tab’s high-resolution graphics and excellent sound would provide an outstanding on-board entertainment experience.

Daley said that the first phase would provide the Galaxy Tab 10.1 to guests pre-loaded with a range of movies, television and audio programs for their entertainment and information. He added that the group felt the device was the perfect choice to experience the next generation of in-flight entertainment.

Daley explained that Phase II would involve the roll-out of a leading edge Wi-Fi system developed by Lufthansa Systems. “In Phase II guests will have access to a wide range of products including video and audio streaming delivered on demand to their own personal electronic devices, Wi-Fi enabled laptops or the Samsung GALAXY Tab 10.1,” he said.

According to Daley, the increasing number of travellers carrying along their own devices opens up further potential for in-flight entertainment. The Wi-Fi in-flight entertainment system will keep Virgin Australia at the forefront of technology, including:

The capability to control and view content from personal electronic devices (PEDs) and Wi-Fi enabled laptops
An extensive range of movies, television and audio content
On demand controls to start, rewind, stop, pause and fast forward content
Selection of games for children and adults including arcade style games in future releases
Service and product information including destination/airport guides, travel offers and velocity information in future releases.

With these technology features, the Galaxy Tab constitutes the perfect companion for guests’ in-flight entertainment, according to Daley. Other features include a 16:9 screen aspect that enhances the movie viewing experience, improved screen sharpness with 149 pixels per square inch, and a lightweight (565 g) and slim (8.6 mm thickness) design that makes the device easy to hold.

Virgin Airlines is following in the footsteps of Qantas, which had started using Apple’s iPad 2 for in-flight entertainment for all passengers in Economy and Business for the duration of their flights. Australian Business Traveller had reported that the trial was slated to carry on through February under the name ‘Q Streaming’, but restricted to a single Boeing 767-300. The plan included one tablet for each of the aircraft’s 254 seats, along with sufficient spare devices. The iPads would be ‘locked down’ to ensure that they did not have any capability not approved by the airline.

Earlier, in June 2010 low-cost airline Jetstar had revealed plans to trial the iPad as an in-flight entertainment option costing customers $10 to rent on board selected domestic routes.

opinion/analysis
While all of this seems quite fine and dandy, one does wonder whether the on-board Wi-Fi will be able to keep up with the demands of streaming video to all of these tablets. In-flight entertainment systems are often sketchy at best when they feature wired connections. Will the airlines install enough Wi-Fi access points so that everyone on board can stream video to their seats simultaneously?

Image credit: Samsung. Opinion/analysis by Renai LeMay.

Telstra launches Cisco’s Android tablet

Renai LeMay — Tue, 01 Nov 2011 05:03:32 +0000

news The nation’s largest telco Telstra late last week confirmed it had started offering Cisco’s low-profile Cius Android tablet to customers as a complement to their corporate unified communications platforms.

The tablet shares a number of specifications with the current flock of consumer-focused Android tablets, shipping with a 7″ touchscreen running at a resolution of 1280×720 pixels, 802.11 b, g and n Wi-Fi support, mini-USB and HDMI ports and a camera than can record 720p HD video.

However, where the likes of the Motorola Xoom, Samsung Galaxy Tab, Acer Iconia Tab and so on are aimed at the same consumer market which Apple’s iPad has been so successful in, Cisco’s tablet falls on the other side of the fence. Cisco aims to use the device to complement its existing strengths in the corporate unified communications market, with the Cius being another endpoint for accessing corporate directories, placing and receiving calls and engaging in instant messaging and videoconferencing sessions. Advanced functions such as desktop virtualisation and integration with Cisco’s high-end TelePresence suites are also supported.

The tablet launched in Australia through Cisco a few months ago, but has a second opportunity to gain scale through the Telstra relationship unveiled last week.

In a statement issued last week, Telstra executive director Philip Jones said the tablet would assist businesses in their drive to remain better connected. “Telstra is now able to offer organisations a built-for-business tablet to keep workers connected so they can collaborate not just by email but also via IP telephony and even TelePresence away from their desk,” he said.

“Telstra’s experience and our close alliance with Cisco means organisations choosing the CIUS tablet from us can get the implementation and support they need, including management of UC applications at server level, identifying the CIUS applications relevant for their business, upgrading core systems as required, wireless LAN implementation and technical support. The CIUS Wi-Fi is the latest addition to Telstra’s Unified Communications offering and is designed to work with organisations’ latest Cisco Unified Communications platform.”

So far, Cisco has not announced any Australian customers for the Cius, although it has a number of major corporate customers who are likely to be trialling the tablet. Some of the household names which maintain Cisco unified communications infrastructure include Qantas and Westpac. A spokesperson for Telstra said the telco was currently piloting the Cius with its customers, but none had yet been announced.

Cisco’s main rival in the unified communications space, Avaya, also announced a tablet last year, but has likewise not announced any local customers. The corporate tablet market is currently dominated by the Apple iPad, despite ongoing efforts by BlackBerry maker Research in Motion to steal market share by Cupertino in the area. Telstra also markets Motorola’s Xoom to the corporate market.

opinion/analysis
Not only do I not expect Cisco’s Cius tablet to get anywhere in Australia, I expect Australian organisations to follow Jetstar’s lead over the next several years and begin actively removing physical telephony infrastructure from their workers’ desks over the next several years and deploying softphones instead.

Cisco’s promotion of the Cius will likely earn it a few early adopter customers, but I don’t expect any widespread rollouts of the tablet, except in a few specialised environments, perhaps — such as restricted environments like the Department of Defence — where the growing trend towards BYO computing will not be tolerated to the same extent as it will be in more open organisations.

In general, I would expect much of the unified computing aspect of Cisco’s offerings to undergo a radical change over the next few years. The company’s current UC business model — where organisations pay it through the nose to buy a stack of infrastructure, which their staff then use — is going to start looking quite out of date shortly.

Cisco’s new main competitor in the UC market may just be Microsoft’s purely software-based Lync platform, which I’m seeing high degrees of interest from right around Australia. At the end of the day, telephony in 2011 is just a software application … or at least, it should be.

Image credit: Cisco

Westpac poised to dump Lotus Notes

Renai LeMay — Thu, 19 May 2011 07:38:24 +0000

Westpac Banking Corporation, one of Australia’s largest users of IBM’s besieged Lotus Notes/Domino ecosystem, has finally confirmed it is ready to dump the platform in favour of Microsoft’s rival Outlook/Exchange system, in a move which constitutes the latest nail in the coffin for Notes in Australia.

The bank has been a Lotus user for more than a decade, backed by its lengthy comprehensive technology outsourcing agreement with IBM. But despite renewing its vows with Big Blue for a further five years last November, Westpac today confirmed it had filed divorce papers with its troubled email platform.

“Westpac is currently reviewing its email requirements,” a bank spokesperson said in a brief statement this afternoon, “and looking forward to migrating all Westpac staff to Microsoft Outlook.” The bank could not confirm any further details, but people with knowledge of the situation said it intended to migrate to the latest version of Microsoft’s platform — Exchange 2010 — over the next 18 months with the support of both existing partner IBM and Japanese IT services giant Fujitsu.

The move will constitute one of the largest Lotus to Exchange migrations in Australia’s history, as the bank has some 39,000 staff — dwarfing even the shift by Qantas in 2010 of its 20,000 staff to Exchange, and other rollouts such as the ones conducted by financial services giant AMP and Coca-Cola Amatil.

It is not known to what extent Westpac uses Notes’ broader functions in its operations beyond email. Many organisations who have been using the platform for years, as Westpac has, have taken advantage internally of the all-encompassing development environment which Notes provides. It can be a complex exercise for much of that functionality to be migrated onto Microsoft’s platform — often involving the use of the software giant’s SharePoint collaboration portal, for example.

Some organisations are still happy with Lotus, however — such as Australian youth charity BoysTown, which has remained with Notes/Domino and even upgraded the platform, citing the extensibility of IBM’s solution compared with that of rivals.

The next major known shift from Lotus Notes/Domino to Exchange will likely take place at new super-agency the Department of Human Services, which in June last year revealed it was likely to end the long-running relationship which some of its component agencies have had for years with Notes, as part of its massive technology consolidation — which recently received a funding boost worth hundreds of millions of dollars in the Federal Budget.

Various agencies to be consolidated — especially Centrelink and Medicare Australia — have used the ailing Notes platform for years. But in an interview last year, the department’s technology chief John Wadeson said it was likely that the new super-department would standardise on Exchange.

“I couldn’t say that it was set in stone, but we are at this minute certainly looking at moving to a Microsoft platform in that layer,” he said.

Opinions differ vastly between technology sector workers about the merits of the two platforms, with many preferring either one — or even Google’s Apps suite. However, common reasons cited by chief information officers for the ongoing migrations from Notes include the belief that it doesn’t support third-party devices such as mobile phones as well, and the powerful integration between Outlook/Exchange and the rest of Microsoft’s enterprise software stack and unified communications platforms built by vendors like Cisco (which Westpac also uses).

Image credit: Winam, Creative Commons

CIO Paul Jones flies to Qantas from Mars

Marina Freri — Thu, 24 Feb 2011 07:07:44 +0000

Australia’s largest airline Qantas today announced it had appointed a new chief information officer, picking Paul Jones — who was working in the same role for Mars Incorporated.

The news — which, it appears, was broken by CIO Magazine — is the first official CIO appointment for the airline after it axed then-CIO Jamila Gordon in March 2009 after the executive had held the role for just over a year. Executive manager of Corporate Services and Technology, David Hall, who is now Jetstar CEO, acted as an interim CIO picking up Gordon’s responsibilities. At that time Hall used to describe himself as “quasi-chief information officer”.

Last year in July, NSW Department of Education and Training chief information officer Stephen Wilson was chosen to join Qantas as its head of technology, and to report to Hall. Wilson – who worked for the NSW DET deployment of the Digital Education Revolution – joined Qantas when the airline was embarking on major cost-cutting exercise within its IT support, as well as overhauling several key systems.

Seven months later from this appointment and almost two years after Gordon’s resignation, Qantas is welcoming its new CIO who will commence to work in autumn. “Qantas has appointed Paul Jones as chief information officer, commencing at the end of April,” the company said in a statement.

A Qantas spokesperson said Jones would report to Jayne Hrdlicka — group executive of strategy and technology. “Mr Jones will have overall responsibility for delivering IT solutions across the Qantas Group,” he said. “He will join Qantas from Mars Incorporated, where he is chief information officer for Global Chocolate.”

The airline spokesperson said at Mars Incorporated Jones had had experience in defining IT strategic goals, delivering IT programs and responsibility for all IT services delivered. He said Jones has expertise which would go to the benefit of Qantas. “The appointment of Mr Jones as CIO will strengthen the alignment of business strategy and technology within Qantas under Jane Hrdlicka,” he said.

Image credit: Qantas

NSW Education appoints new CIO

Marina Freri — Mon, 17 Jan 2011 23:34:40 +0000

The NSW Department of Education and Training (DET) this morning confirmed it had appointed Victorian public servant Stephen Loquet as its new chief information officer.

According to a DET spokesperson, Loquet will take up the role of CIO from 31 January, following the resignation of Stephen Wilson in June 2010, who left after five years and is currently working as head of technology at Qantas. The news was broken first by the AustralianIT this morning.

The NSW DET runs one of the largest technology support departments in Australia. According to DET official figures, the average ratio of computers to students in schools is now 1 to 6 and is expected to improve as more computers will be delivered under the Digital Education Revolution project. With a budget of $442 million the NSW and Commonwealth Government will work to maximise the distribution of laptops across schools in the state by 2012.

The spokesperson said Loquet, who is currently a senior IT executive with the Victorian Department of Education and Early Childhood, has a strong IT background and a deep understanding of the education sector.

“Stephen is well versed in the Federal Government’s Digital Education Revolution and has successfully implemented and managed major change program and has worked effectively with a broad range of stakeholders including school principals,” the DET spokesperson said.

Wilson oversaw some dramatic changes at the department during his time at the wheel.

For starters, in 2008 DET migrated its 1.5 million school students off its Microsoft Exchange email platform and onto Gmail, in one of the largest Gmail migrations globally so far. Wilson has also been involved in the rollout of the Federal Government’s Digital Education Revolution program in the state — in March he said the department was rolling out 10,000 laptops to students per week.

A lower profile rollout recently saw a massive deployment of Microsoft’s Hyper-V software to some 437 schools across NSW, in what again constituted one of the largest deployments known in Australia of the software — a rival technology to virtualisation leader VMWare.

Image credit: Rob Owen-Wahl, royalty free

The Australian private cloud: Who’s using it, and how?

Renai LeMay — Mon, 08 Nov 2010 22:12:55 +0000

feature It’s a breezy Monday afternoon in Sydney and Komatsu Australia general manager of IT Ian Harvison is talking calmly and at length about his company’s plans for its datacentre.

“The goal is that it will be shut down in two weeks,” he says.

A few years ago, such a statement would be have been laughed out of town. Shut down a datacentre? For a large industrial equipment manufacturer like Komatsu? How would the company track its assets on their journey around Australia? Provide basic IT services to its employees? Keep the telephone lines running?

A company’s datacentre, in our modern society, is its heart, pumping blood around its widely dispersed body; its nervous system, sending signals to every employee around the nation; its muscles, pushing information to suppliers and customers. And the IT department is king of that datacentre. Several years ago, Harvison would have been considered a crazy man.

But in technology — as in every other sphere of human endeavour — often it’s the crazy ideas that are actually the most logical, in another time or place. In 2010, Harvison’s approach to Komatsu’s IT assets is in fact the most rational course of action for a company which doesn’t specialise in IT services — it specialises in building construction and mining equipment.

And it makes the executive one of a new generation of Australian CIOs who are leading the drive towards sustainable forms of cloud computing in the enterprise — particularly private cloud.

Who’s doing it
When we set out several months ago to find large Australian organisations who had started to use private cloud computing services or who had started to examine business cases to do so, we didn’t have to go far.

“There is a healthy trend towards analysing the benefits of private clouds in Australia,” says John Wadeson, long-time Centrelink IT chief and now deputy secretary (ICT infrastructure) of the Department of Human Services. “A number of large organisations are either piloting or implementing private cloud solution in Australia.”

Dimension Data’s Virtual Data Centre general manager David Hanrahan points to the strong onset of private cloud in verticals where there is a strong transactional processing element — such as financial services and the banks.

Both Westpac and the Commonwealth Bank of Australia have talked publicly about their rollouts, and while not much is known about National Australia Bank’s plans, the company last month joined a global alliance of customers and vendors created by Intel to discuss cloud computing.

The rest of the private sector is also humming with cloud deployments. Qantas chief IT architect Chris Seller says the airline is in the process of virtualising its datacentre operations (run by IBM), and by 2015, it expects to be “extensively utilising cloud-based services” — with key services being targeted for cloud delivery including collaboration and messaging, IT security, application development — and “many” other back-office and line of business applications.

And Telstra has picked up several early wins, with Visy picking the telco for a wide-ranging cloud computing deal in July 2009. Having the cardboard manufacturer on board would later on in that year be one of the main driving forces between Kohmatsu picking Telstra for its own cloud migration.

“In order to remain competitive and achieve our commercial objectives in a tough economic environment, we need to change the way in which our IT resources are utilised and look at more innovative offerings around a user-pay model with our vendors, so we can share the risk and reward and allow us to grow together,” said Visy CIO Ken Major at the time.

“We now pay a monthly fee based on what we use for not only our telecommunications needs, but also our computing and storage needs so we no longer have the concern of investing in server and storage infrastructure for the future, as this is now available from Telstra as a service on demand. The capital that was earmarked for IT upgrades will now be better deployed into revenue generating assets across the business.”

Hanrahan says there’s also “quite a bit of work” emerging in education — for example, in the universities, which are often consolidating the IT resources of different faculties and departments together into shared services centres together. Curtin University of Technology outed itself in February as an early customer of Optus’ Elevate offering, which is built upon the Vblock stack promulgated by the VMware, Cisco and EMC (VCE) alliance.

“Researchers like to have the flexibility to manage their IT requirements based on a switch on, switch off basis,” said Curtin chief information officer Peter Nikoletatos when the service launched in September. “We see a real opportunity to provision bespoke environments for researchers so they can access computing on demand. This model could also be potentially extended to students as we progress along the cloud journey.”

Government is also a logical one — agencies such as the Australian Taxation Office are often compared to the big banks in terms of their heavy reliance on technology. State and Federal Governments have been cautious in talking about cloud publicly, but there is no doubt there is action behind the scenes — particularly as the move towards shared services gains pace.

“We are actively deploying and building cloud infrastructure to meet our specific needs,” says John Taylor, leader of the Computation and Simulation Sciences division at the Commonwealth Scientific and Research Organisation (CSIRO).

Taylor believes private cloud will pay a particularly important role in Government. “Private clouds are likely to remain essential for government going forward due to the need for security,” he says — although as security issues are resolved, the executive says public clouds may become more attractive.

According to Joseph Sweeney, an advisor with local analyst firm Intelligent Business Research Services, the Australian organisations that are currently looking at private cloud services may vary from medium-sized companies all the way up to the giants such as the major banks. But they have one thing in common.

“It’s anyone that has a dedicated enterprise architecture role,” he says.

When an organisation is large enough to employ someone whose job it is to purely look at the internal technological roadmap going forward, that’s when certain industry-wide lessons start to creep in. Things like standards and best practices for management of architecture. Increasing use of virtualisation, and the ongoing abstraction of various hardware and software chunks.

These are all things which lead end users down the private cloud computing path — as their datacentres become increasingly virtualised, the same picture forms in each individual organisation.

Sweeney’s colleague James Turner puts it another way. For the analyst, private cloud is really just a way of labelling an organisation’s internal maturity in terms of how they’re providing services. “When it comes to private cloud, from my perspective, it means the IT department has hit a capability maturity point where it can deliver IT as a service,” he says.

Please take a moment to review the cloud computing services offered by our sponsor Fujitsu, without whose assistance this article series would not have been possible.

How are organisations using private cloud?
When you talk to chief information officers about private cloud services and what they’re using them for, the conversation quickly turns to several key areas: Testing and development, and messaging and collaboration.

“There’s a big application in testing, a big application in development, a lesser application in production,” said Westpac group executive of technology Bob McKinnon recently, as the bank detailed its private cloud implementation.

Komatsu’s Harvison concurs on the test & dev front. He points out that under a traditional infrastructure sourcing model, his company would need to acquire servers and storage to build environments for each project. Then as a project ramped down, utilisation of the assets would sink.

“We’d still find a utilisation model, but utilisation would drop,” he says. Under a private cloud model — or, as Harvison terms his company’s contract, infrastructure as a service — the servers and storage can simply be provisioned up and down as required and billed as operational expenditure. The resources don’t sit around on an organisation’s balance sheet if they’re not being used.

Westpac has already shifted much of its testing environments into the cloud, with chief technology officer Sarv Girn pointing out that it couldn’t afford to build a complete new traditional processing environment whenever a new technology project needed to be tested.

Another area which Australian organisations are quickly moving into the cloud is their email and collaboration products — generally software such as Microsoft’s Exchange and SharePoint suites. It’s unclear whether the shift of such products into hosted environments purely constitutes what is called ‘private cloud’ (or whether they could better be described as software as a service), but there is no doubt that some of the service providers offering such outsourced environments have platforms which share most of the attributes of private cloud.

Financial services giant AMP, for example, in July revealed it would dump its Lotus Notes/Domino installation and shift to a hosted Exchange platform with CSC. Coca-Cola Amatil is undergoing a similar move to Microsoft’s Business Productivity Online Suite, and online real estate giant REA Group has migrated its in-house staff email system to Telstra’s T-Suite platform.

However, test & dev and messaging and collaboration are generally considered ‘edge’ or non-critical services for many applications. Far more rare are the organisations which have shifted their entire production IT environments in the cloud.

When this shift comes, it tends to arrive as organisations approach the 100 percent mark in terms of virtualising their server environments.

The big shift for Kohmatsu was migrating its SAP installation off physical servers and into a fully virtualised environment with Telstra. Harvison says before the Telstra move took place, his team had virtualised “everything but SAP” internally previously.

Part of the impetus to shift, he explains, is that the actual physical servers which were running the company’s SAP platform were coming to the end of their useful life. “We actually had to make a decision about going out and buying new equipment to replenish the SAP environment, or look at something different,” he says.

It was a similar case when business support specialist Corporate Express recently took the choice to deploy Cisco’s Unified Computing System combined server and network infrastructure to create its own private cloud. The company, according to infrastructure and operations centre manager Andrew Grech, was already heading down the path towards 100 percent virtualisation — and is on track to hit that boundary before the end of this year.

When organisations reach this 100 percent mark — which IBRS would no doubt see as reflecting a relative maturity of their capability — it makes many things easier in their IT environment. Disaster recovery, backup and provisioning all become a matter of software support and changes — with the hardware mostly abstracted out of the picture.

In Kohmatsu’s case, its contract with Telstra stipulates that the telco will manage its entire environment up to and including the operating system layer in its virtualised servers — including O/S security patching and so on. Harvison’s team manages everything on top of that — the application stack.

The degree to which Harvison’s thinking has changed as his company has shifted its infrastructure out of its own datacentre is evident by the changed way he thinks about the physical servers that are actually processing Kohmatsu’s data.

“From our perspective, we don’t care what the hardware is at all,” he says — whether the servers are made by Sun, HP, IBM or whoever. “We didn’t actually talk at all with regards to the server platform,” he says of his discussions with Telstra. “At the end of the day, their relationship needs to be more with the cloud partners as opposed to the end customer.”

Harvison says although Komatsu did discuss Telstra’s virtualisation and storage platforms with the telco, in general it it’s not interested in the underlying technology beneath the services its buying — because it has “quite robust service level agreements” with the big T. “As long as Telstra delivers the SLAs … who they partner with and what they’re running on, is a Telstra-driven initiative,” he says.

Making the decision
One big question that end users will need to think about is which provider they will go with when they eventually migrate their datacentre into the cloud. Komatsu’s Harvison says that decision was the most critical thing about his company’s migration process.

Komatsu talked to three suppliers when it was making its cloud decision — HP, Telstra and Fujitsu. The company had experience working with all three in the past. Ultimately, HP declined to put in a bid for the work, and Komatsu ended up picking Telstra over Fujitsu because at that stage, Telstra’s cloud was up and running with a large existing customer — Visy.

“Instead of a proof of concept model, they had runs on the board, and they had investment in place,” says Harvison. In addition, Telstra had a different pricing model than Fujitsu was proposing.

Today, Harvison says the market is different — Fujitsu has recently formally launched its own cloud infrastructure in Australia, and other players are rapidly entering the market. But the executive says there still “aren’t that many players” in the market that have “proven solutions”.

Apart from choosing a cloud partner, Harvison says the other important thing is to make sure a supplier will stay current with the ongoing development of technology — despite the fact that you’re paying them the same amount as things progress. Komatsu has regular “technology refresh windows” where it meets with Telstra and discusses the new technology entering the market. “The last thing you want is to get stuck on old technology,” he says.

And the converse applies as well — Komatsu needs to know about any changes that are made to its underlying platform (even upgrades), so as to be able to ensure that its business applications are still supported and certified. “That’s why partnering is key — and making sure you are constantly reviewing,” he says.

Ultimately, the way that Australian CIOs are talking about private cloud in 2010 in Australia is the same way they’ve talked about any other product or service for years. It’s all about making sure the technology is aligned with the business and that good value is being gained.

The response of the CSIRO’s Taylor to the question of what he would recommend to CIOs looking at private cloud speaks volumes to this basic idea. “Establish the business case to demonstrate that their will be real benefits to the organisation,” he replies.

Just like anything else.

Image credit: BasicGov, Creative Commons

Dumped Qantas CIO finds Leighton home

Renai LeMay — Mon, 01 Nov 2010 23:50:45 +0000

High-profile technology executive Jamila Gordon has landed on her feet after losing her position as Qantas chief information officer earlier this year, picking up the equivalent role at project management and contracting giant Leighton Holdings.

Gordon was made redundant by Qantas in March 2009, as part of an extensive restructure in the business conducted by its new chief executive officer Alan Joyce. The executive was replaced by former Jetstar executive David Hall, who has returned to lead the low cost Qantas subsidiary after a period leading Qantas’ corporate services and technology operations.

A spokesperson for Leighton said Gordon’s role was a new one. In the past, each division of Leighton — and there are many, ranging from its Leighton Contractors business to Thiess, John Holland and more — was broadly responsible for its own IT strategy.

“Gordon’s role will span the Leighton Group, and she will be working closely with the operating company chief information officers in shaping the group’s IT strategy and corporate governance, as well as overseeing and evaluating IT risk,” the company said in a statement. “In addition, Ms Gordon will work with operating company CIOs to identify areas of commonality where the Leighton Group will benefit if aggregated.”

Gordon’s role will also see her responsible for the management of IT for several discrete divisions — Leighton Holdings itself (the holding company) and the Leighton Properties group.

The executive’s role will see her working closely with at least one old friend.

When Gordon fronted the press after her appointment in Qantas — she joined the airline in 2007 — she did so in company with Qantas chief financial officer Peter Gregg. And it was Gregg that took much of the responsibility for outlining Qantas’ technology strategy during that period. The CFO left Qantas in September 2008, following Joyce’s appointment, and won a position as Leighton CFO in October 2009.

At Leighton, Gordon will report directly to Gregg — as she did at Qantas.

Not a great deal is known about Leighton’s technology operations. However, scraps of information have made their way into the public domain.

In May, for example, John Holland CIO Les Oates outed the organisation as an early adopter of Sharepoint 2010. MIS Magazine, in its profile of the company published for its MIS100 edition in July 2009, listed an early trial of Windows 7 as one of its activities, and its ERP and financial systems continued to be added to where necessary, according to the company’s general manager of Strategic IT Sean Kaye. Thiess, too, has been involved in major projects — such as a consolidation project that is seeing it centralise data from some 200 operational sites into a centralised datacentre location.

Before her role at Qantas, Gordon held a number of other senior IT positions — with IBM in Europe, for example, but also with Deloitte Consuling and GIO Insurance.

Image credit: Leighton Holdings

The pathetic state of Australian in-flight internet

Renai LeMay — Wed, 27 Oct 2010 14:17:04 +0000

blog Want to use the internet on your flight on an Australian airline? That’s nice — but it’s also not yet possible, appears to be the conclusion to an extensive article on the subject published over at brand spanking new online publication Australian Business Traveller. This paragraph seems to be emblematic of the airlines’ attitude towards the subject:

A Qantas spokesperson confirmed to Australian Business Traveller that it does plan to offer internet in its A380s, though it had nothing to say at the moment about when it would be activated, or at what price. She also said Qantas had no plans to announce for internet connectivity in its other planes such as its domestic fleet.

The situation in the US, however, appears a little different:

Flying domestically in the US is an embarrassment of riches when it comes to internet access in the plane. A company called Aircell has installed EV-DO Rev. A base stations pointing at the sky on mobile towers right across continental USA. The inflight internet service is called GoGo, and aircraft from numerous airlines connect to the Aircell base stations and provide inflight internet access via WiFi at affordable rates.

Shock, horror. Once again — through no obvious reason — Australia gets left behind in the technology curve. We have planes with the facility to offer in-flight internet access and a passenger base that would happily pay for it, but airlines that can’t seem to get across the finish line.

When does Generation Y reach the management layer again?

Image credit: Qantas