The managing director of the Australian branch of global software giant SAP has broken ranks dramatically with other leaders in Australia’s technology industry in their support for the Federal Government’s flagship National Broadband Network project, declaring the initiative a “wasted investment” because it doesn’t focus on wireless technology.
Global companies like IBM and Google have backed the predominantly fibre-based NBN as a crucial enabler driving productivity gains around the nation, with Google chairman Eric Schmidt going so far as to state at a conference in Spain several weeks ago that the project meant Australia was “leading the world” in understanding the importance of fibre.
However, in a speech on Tuesday to a lunch held by the American Chamber of Commerce in Australia and first reported by the Financial Review, SAP Australia managing director Tim Ebbeck (pictured) wasn’t as keen on the initiative.
Ebbeck noted that while he was “a great supporter of improved ubiquitous broadband for Australia”, the final mix of wired and wireless technologies used in the rolled out “must be tweaked”, and the total cost of the project must come down — fuelled by the use of wireless instead of fibre.
“A national broadband network that is not delivering mobility as its principal connection approach is, in my view, wasted investment and opportunity,” Ebbeck said, according to a copy of the speech distributed by SAP yesterday.
The NBN will use wireless and satellite to service a small portion of Australia’s population, but the overwhelming majority will use fibre. Most technology experts — including those from the major mobile telcos themselves — have agreed over the past few months that Australia will need both wireless and fixed broadband in future to be able to fuel its information and communications needs.
The SAP chief said according to government agency Infrastructure Australia, there was currently a ‘priority pipeline’ of $82.8 billion worth of projects to improve Australian infrastructure which needed funding, including broadband, but also a national freight network, adaptable and secure water supplier, a national energy market and so on.
“Frankly, I am tired of all the discussion being focused on the broadband network,” said Ebbeck. “It is not the most important of these infrastructure requirements, as supportive as I am of ubiquitous broadband with a strong wireless focus. I contend that water and transport infrastructure are the top priorities out of the list of seven.”
Ebbeck highlighted increased corporate adoption of the Apple iPad — which the German company is rolling out to its staff globally — as well as other enterprise mobility solutions as evidence of how technology could enhance productivity in Australia’s economy.
Other themes of the executive’s speech included the need to better capture benefits from the mining boom — which Ebbeck said had masked poor performance in the rest of the economy over the past decade, as well as the need to populate the country with skilled workers to sustain growth, and for organisations to welcome technology-fuelled innovation to increase national productivity.
Image credit: Ceiling, Creative Commons, SAP
/facepalm
How many times? Healthy wireless market, no need for government intervention.
Precisely.
Nobody is being banned from deploying wireless – far from it. Telstra, Optus and VHA are preparing to deploy upgraded wireless networks (LTE).
The NBN is also FIXED wireless, not MOBILE wireless. Completely different product.
How many times? Healthy wireless market, no need for government intervention.
You are just picking out stuff from the article. You will notice that his other argument (which I agree with) is that putting FTTH everywhere is simply put not a priority compared to all the other things that could be done, and in his opinion if they put more emphasis on wireless you could give Australia a world class wireless network (instead of having like 20/10 stable as we most likely will with Telstra’s 4G you could bump that even higher)
I would also like to see the NBN getting the labor required to build the damn thing when in the next 2 terms of NSW state government (which will almost certainly be liberal) are going to start building 2 railway lines + motorway extensions at the same time.
NBN compared to so many other things is simply put not a priority
Deteego, aside from that being a state issue, I’d love to know when the last time was that Liberals ever invested anything in infrastructure.
Fortunately Australia’s only 200 years old. Long after the invention of paper, so you probably wont need an archeologist.
Infrastructure is generally a state issue, and most state governments (up until recently) have been Labor.
I know for one thing, the NSW labor government here because they chose not to build infrastructure at all has put this state back into the dark ages
Hmmm, but yet when they announce to do so Federally, you bag them daily…?
What a laugh. Speaking as a thirty-year industry professional expressing a personal opinion, SAP imposes a heavy burden on companies’ balance sheets everywhere it is used. I have never seen an exception. SAP locks the business into a high-cost consultancy and every useful function is contained in expensive non-core modular add-ons that require consultancy to integrate them.
No wonder SAP feels threatened by a network that will supply enough reliable bandwidth to let regional and urban business use cloud-based alternatives. No wonder it wants wireless dropouts and congestion to keep businesses using and constantly maintaining in-house applications.
As to cost, as OPEL and NBN Mark I proved, wireless is only the cheapest solution for the 94th to 97th percentile of premises. Fibre to premises is cheaper than wireless all the way up to the 93rd percentile, and only 7% need to suffer the more expensive and less robust alternatives.
Most folks use their iPads in range of Wi-Fi anyway, and will preferentially roam to Wi-Fi for its cheaper data, reliable connection and usually faster bandwidth. Liberating the wireless airwaves of 99% of mobile device data consumption by fibreing 93% of premises is the solution to wireless cost and congestion. Without fibre, wireless will be prohibitively expensive. With fibre, universal wireless broadband will be cheaper to provision and less congested.
The future is fibre-supported wireless, i.e. the NBN.
Indeed Francis… I wasn’t going to mention it because it seems as though me, being an NBN supporter, is just having a go at SAP now, but…
I know of an organisation who did a 12 month feasibility study (spending $1m on top of salaries to 30 odd employees involved) into a new purchasing system/software suite from SAP.
In the end SAP was dumped and Technology One (an Aussie Company I believe) was chosen!
Didn’t O’Farrell say he’s cancelling the build of at least one of those rail lines? See, I’m not even in NSW, and I know that.
Maybe he got out that railway modelling software?
You just keep getting things incorrect.
He said he is not building the parramatta link because there is not enough labor + funds to build more then 3 railway lines plus extensions to motorways at once. Thats what happens when a labor government builds next to nothing (cancelled 11 announcements for infrastructure programs in the past 16 years)
Maybe you should, you know, stop talking about stuff you don’t know (or spend those precious seconds at least doing some god damn research). You’re ignorance increases every time you post
This is the platform (pun intended) – you questioning others credibility, when your own is non-existent, for me to AGAIN ask you deteego, to admit you were wrong in your claims about the Senate forming government.
Well…??????
You’re ignorance (and desperation to avoid this issue – which juicily, won’t go away until you do…LOL) increases every time you post!!!
3 railway2 railway
Exactly. Besides which the NBN will allow even greater competition in the wireless network by providing ubiquitous backhaul access for other wireless providers. For example, they can partner with local businesses and drop a microcell and connect to the NBN without interfering with the business’ bandwidth.
You know what is a waste? Using SAP as the payroll product for Queensland Health. A supposedly $50m solution that now costs $210m and still can’t pay people correctly. From that I conclude that Tim Ebbeck and SAP are absolute experts on waste – SAP waste tax pay money, SAP waste space (by using it) and right now they waste my time. Congrats Mr Ebbeck on your hat trick.
Haha agreed … how ironic the SAP CEO is commenting on “wasted investment”. From a developer point of view SAP is so out of date with current technology which is why it costs so much to implement.
You do mean IBM don’t you? It was SAP. IBM put in their solution which was the big stuff up. I believe they are re-looking at a SAP solution. Yes it is expensive but one of my mate works for Rio and They love the stuff. I think it’s a little over the top but Rio us it for everything!
Well most of those responsibilities are state priorities; and we all know how useless states are at the moment. Out of the top 7 things, the only thing the federal government can move on is broadband, and perhaps a national freight network. Everything else would require state cooperation which is like trying to pull teeth from hens.
SAP preaching about waste, HA HA HA!!!
And no need to worry Tim, if the market forces are as brilliant as everyone says they are, then there will be a superior and very affordable wireless service that will be delivered in at least half the time and cost and will easily out perform the NBN.
Market forces are awesome! :D
Finally a comment from an executive with no axe to grind on either side taking the information at hand and making an informed decision not an emotional one! Yes we would all love fibre in the home, but should it be priority number one?
So Mister SAP is “an executive with no axe to grind” is he? See my refutation of that furphy above.
I completely agree that decades of failure to build key dams, railways and roads has made them critical priorities. However, the NBN is off-budget and therefore not taking money from other works, because its construction cost comes from borrowings and is to be repaid from NBNCo revenues (I don’t believe it will be sold off, nor will it need to be because its revenue forecasts are laughably conservative when you simply project historical growth in data demand).
What the government does with its tax revenues is an important discussion, but one not impacted negatively by the NBN. On the contrary, health and education budgets are likely to see savings from the ubiquity of fibre to homes, so an intelligent government could fund more infrastructure with the NBN than without it because of these cost offsets.
As to the need to repopulate regional Australia with skilled workers, the NBN will be a major driver of regional development, by overcoming with communications most of the negative effects of the tyranny of distance which today force many businesses and higher socio-economic households who would prefer to move elsewhere to remain in our groaning capital cities.
SAP? Never heard of them. I have heard of IBM and Google though… bring on the fibre.
I suspect Mr Ebbeck will regret that comment. He should know better.
Can someone please tell me. Why we cant have wireless owned by the current ISP’s and fibre owned by NBN.co?
Wireless quotas will always cost more will always have less speed. I’m not saying the people who want 4g wireless or whatever its called today can’t have it.
But why do I get stuck with wireless when I’m perfectly happy with a lined connection. I just want a lined connection that doesn’t break every-time it rains.
I’m sick to death of people telling me 4g wireless is the future for everyone. You can’t game on wireless.
With the so called max speeds of 3g how come I only get 1.6Mbits speed? Lets see might become congested easily??
Tom, Although game is not seen as an important driver to the NBN I will address this from a wireless point of view. Latency has been a focus of the LTE working group and LTE has reduced the Latency to LOWER then ADSL2+! LTE advance shows promise in being even lower! Rain is an issue which Many people will put up with if there is an advantage. People who don’t support fibre are not say it’s not better just that it will have no financial return. There assumption unlike what “Francis Young” are very out landish and assume over 70% subscriber levels. What we are saying for one is with the evolution that are happening in wireless and the FACTs from Telstras stats people are moving to wireless in droves. Why would fibre change this? If I’m supporting a friend it is a lot easier to help them out in a wireless environment then a fix environment.
I have said is again and again and it appears I will need to continue to. It’s all about the cost and therefore the risk evolved in this investment. Everything appears off sheet although it is a government project with a good chance of have poor returns. Even the Telstra deal appears off the NBN co books… (who is paying for that?)
If it was such a good project why wouldn’t we be given ALL the information. Their is NO commercial interest issue they are creating a monopoly!
. Latency has been a focus of the LTE working group and LTE has reduced the Latency to LOWER then ADSL2+!
Source, and if possible, real world examples. I have seen on par in some cases, but not less than. If you can prove that the majority of the time LTE has better latency than ADSL2+, then this statement is true.
There assumption unlike what “Francis Young” are very out landish and assume over 70% subscriber levels.
What is the current subscription level for households and ADSL2+ or HFC with Telstra (but not Optus) within the Fibre Footprint? All of these customers are to be migrated to the NBN, and I’m pretty sure it currently sits at higher than 70%.
What we are saying for one is with the evolution that are happening in wireless and the FACTs from Telstras stats people are moving to wireless in droves.
Actually the facts say there is an explosion in wireless subscriptions, however there is not a decline in fixed line connections. This means that although wireless is popular, it is not ‘replacing’ the fixed line connection. Although there is an increase in the number of wireless only subscribers, which is actually expected, predicted, and compensated for by NBN Co.
Source, and if possible, real world examples. I have seen on par in some cases, but not less than. If you can prove that the majority of the time LTE has better latency than ADSL2+, then this statement is true.
Your link… it takes a while to get to the point but expect 30-50ms on adsl this is showing 20 to a test site…. http://www.youtube.com/watch?v=mjrk11sNtbA&feature=related
No one prove LTE can be faster. Multiple prove nothing as it’s the effect of bottle necks which not the point I was making Try DODO pings…..
“Which is actually expected, predicted, and compensated for by NBN Co.”
Where I have read most of the business plan and I haven’t seen anything
Actually the facts say there is an explosion in wireless subscriptions, however there is not a decline in fixed line connections.
Really not what I read from the following “Deutsche Bank analyst Andrew Anagnostellis has forecast that underlying EBITDA will decline by as much as 12.5 per cent to $4.7bn, while revenues will suffer a slight dip of 0.7 per cent to $12.2bn, as growth in mobile and data revenues is offset by the continued decline in its fixed-line telephony revenues.” http://www.theaustralian.com.au/business/industry-sectors/fixed-line-revenue-still-broken-at-telstra/story-e6frg9hx-1226001092881
How do you read that?
What is the current subscription level for households and ADSL2+ or HFC with Telstra (but not Optus) within the Fibre Footprint? All of these customers are to be migrated to the NBN, and I’m pretty sure it currently sits at higher than 70%.
What does the stats on this link point to if not a decline in fixed line numbers which could effect the viaablity of the NBN? http://www.acma.gov.au/WEB/STANDARD/pc=pc_312366 note these are LAST years stats. Most of this growth has happened THIS fiscal year!
“Really not what I read from the following “Deutsche Bank analyst Andrew Anagnostellis has forecast that underlying EBITDA will decline by as much as 12.5 per cent to $4.7bn, while revenues will suffer a slight dip of 0.7 per cent to $12.2bn, as growth in mobile and data revenues is offset by the continued decline in its fixed-line telephony revenues.” http://www.theaustralian.com.au/business/industry-sectors/fixed-line-revenue-still-broken-at-telstra/story-e6frg9hx-1226001092881
How do you read that?
…
What does the stats on this link point to if not a decline in fixed line numbers which could effect the viaablity of the NBN? http://www.acma.gov.au/WEB/STANDARD/pc=pc_312366 note these are LAST years stats. Most of this growth has happened THIS fiscal year!”
LOL I was waiting for someone to conflate fixed-line telephony with fixed-line broadband. Care to explain how telephones have any relevance to the way Australians use broadband, now or in the future? Neither of the above links have anything to do with the discussion at hand.
What is relevant however, and what nightkhaos was referring to, is the stats collected by the ABS showing Australian residential fixed-line broadband continues to grow year on year – both in terms of subscriber numbers (modest growth) and data volume (enormous growth). The important point is that this has been happening even while mobile broadband use has skyrocketed! So while you are correct to say that “people are moving to wireless in droves”, you are completely incorrect to suggest that this has any effect on the viability of the NBN. Not even Telstra’s CTO agrees with you!
Source, and if possible, real world examples. I have seen on par in some cases, but not less than. If you can prove that the majority of the time LTE has better latency than ADSL2+, then this statement is true.
Radio waves travel faster through air then electrons through copper (or light through fiber). LTE does proper latency leveraging (which 3GX does not do), so the difference between 3G and 4G in terms of latency is massive
Check verizon for real world examples
What is the current subscription level for households and ADSL2+ or HFC with Telstra (but not Optus) within the Fibre Footprint? All of these customers are to be migrated to the NBN, and I’m pretty sure it currently sits at higher than 70%.
Yeah, and a lot of those plans are also cheaper then NBN’s cheapest possbile plan. I would love to see how NBN will give line rental for anything less then 26.40 when you can get it from Telstra from $21. ADSL2+ prices (in terms of wholesale and ULL/LSS) have also been dropping sharply, ULL/LSS being reduced down to $16
@ deteego… Yeah, and a lot of those plans are also cheaper then NBN’s cheapest possbile plan?
Please supply the evidence (via a URL demonstrating this) to support the above comment…!And no, saying Google it will not suffice…!
NightKhaosSource, and if possible, real world examples. I have seen on par in some cases, but not less than. If you can prove that the majority of the time LTE has better latency than ADSL2+, then this statement is true.
deteegoRadio waves travel faster through air then electrons through copper (or light through fiber). LTE does proper latency leveraging (which 3GX does not do), so the difference between 3G and 4G in terms of latency is massive
I was going to get into this, started writing a paragraph, deleted will stick with: Propagation of EM through materials is completely, absolutely and utterly irrelevant to the latency (for human, and even super-human perception).
Unless you are talking about point-to-point wireless. IE One antenna for each customer and one antenna at each customers premises. Wireless of any kind will have worse latency than fibre.
Why? because the *way* it shares bandwidth. Again I started writing a paragraph about this.
Suffice to say, shared medium = shared bandwidth AND shared latency.
When your base latency is already higher (harder/slower to encode wireless/adsl than light pulses is my guess) and you then add sharing, your latency goes up.
I will end with this. At work, I manage a network with several buildings. Some connected by fibre (light in glass tubes – physics says it travels 30% slower!), and one connected by a laser! (its in air, should travel 99.9% speed of light! that’s fast!). I also have one connected by microwave.
I get the exact same latency over each light-based link.
My latency over the microwave is *slightly* worse (about 2times, but we are talking 1-3ms vs 2-5ms here)
I get the quoted bandwidth of each link, over each link. (1gbps over the laser/fibre, and 50mbps over the microwave – it’s only slower because we didn’t buy the spectrum for it and it is a longer connection, not because the technology *can’t* do gigabit)
Also, I would prefer it if no one ever ever mentioned the speed of light again in the NBN debate.
Tell me, what will this LTE connect to? Or do you just drop a cell antenna and walk away? Just like now, wireless will be best for mobility and fibre best for fixed locations.
Jeff,
As people have said again and again and again. Fibre should always be used for backhaul. LTE towers should be connected via fibre and big shock the Telstra towers are almost all connected that way. This is one of the main reason they DON’T currently have the issues competitors do. In many cases it’s the Backhaul to the towers that is effecting their speeds NOT the tower it’s self. Just like it’s the backhaul to RIMs (which is fibre) which is effecting subscribers off them! RIMs are a good example of where investment has stopped because Telstra would not benefit from upgrading them now when the NBN will come back and pull it out later.
And what was Telstra’s RIMs excuse pre-NBN?
SAP would see the NBN as a threat. Many businesses will be able to use a cloud based alternative if there is a *reliable* high speed broadband network. And that’s the problem with the wireless solutions – reliability and availability – always there and always delivering the throughput. Fibre can do it, Wireless has yet to demonstrate that it can.
You are kidding aren’t you? Wireless is where a large portion of the SaaS industry is coming from. We are looking at SaaS for many of our business activities… none of the them require fibre connections!!! But companies who use SAP are using it in the same way SaaS works…. and note SAP have already look into SaaS http://www.informationweek.com/news/services/saas/showArticle.jhtml?articleID=217800410
I don’t think this is a corporate SAP attitude … I think what has been broadcast here are specific views held by Tim Ebbeck himself. Why do I think this? Because I follow his Twitter account, and he often posts controversial political views there.
We already have several above-average wireless networks, Telstra regularly claim the best 3G network in the world and are upgrading it to 4G, Optus Vodafone Vivid are looking into it. Why in christ would the government invest in them, when in the fixed connection department, we rank some of the worst.
There is a reason why the government is investing in fixed communications, because the private sector failed massively there – in wireless communications, the private sector is doing okay – but regardless of how good the private sector does, it still won’t change the laws of physics, that result in wireless being a complimentary technology in most cases.
Guys
Thanks for the interest in the article. Just to clarify a couple of things as the headlines and article is not a complete representation of what I actually said. Firstly, I am a great supporter of ubiquitous broadband. Secondly, I do believe that a fibre backbone with wireless delivery is the right solution and we need to focus on that more. Thirdly, people in the tech and media world seem to think this broadband discussion is the most important issue on infrastructure based on coverage, right?. I do not believe it is. It is dwarfed by our need for transport infrastructure and water in this country. We have a mining boom and we should not let the opportunity to rebuild our core infrastructure as a foundation for the future during this period. Sure, that includes broadband. But where is the REAL discussion on spending $43bn on new ports and transport? Or on capturing and distributing water so that when we re-enter drought at some stage we are covered? These are actually bigger socio-economic issues. I love broadband but I love Australia more. As an aside, for the SAP cynics, happy to chat directly. We are a foundation for a lot off the world’s GDP today and doing some awesome stuff in new technology areas – have a look at our in-memory, mobility and cloud offerings (not announcement, offerings). Worth a read! Thanks again for your comments. Tim
Firstly, I am a great supporter of ubiquitous broadband. Secondly, I do believe that a fibre backbone with wireless delivery is the right solution and we need to focus on that more.
Right solution for what application? The are a lot of uses for “broadband” and I can assure you that being connected by wireless for these customers will be considered unacceptable.
Do you also believe that the current market in Australia is incapable of delivering wireless solutions and thus not understand how the NBN focus on only for fixed line customers, where the market is having trouble delivering to an acceptable standard to all customers?
Thirdly, people in the tech and media world seem to think this broadband discussion is the most important issue on infrastructure based on coverage, right?
I very much doubt that is their opinion, but based upon the fact that unlike all the other core infrastructure issues we have on the table the broadband issue is actually being discussed and addressed, it is my opinion that we should take advantage of the political interest in broadband to ensure that broadband is fixed.
Also it is important to note that transport infrastructure, for the most part, is a State, not Federal concern, and that it is a bad idea to get these two governmental bodies confused because you end up getting frustrated at the wrong entity for not addressing a particular issue.
Also it is important to note that transport infrastructure, for the most part, is a State, not Federal concern, and that it is a bad idea to get these two governmental bodies confused because you end up getting frustrated at the wrong entity for not addressing a particular issue.
In addition to what NightKhaos says, because of the way the NBN is funded, it’s not like it’s taking away from the government’s ability to address transportation issues, water issues or whatever your infrastructure requirements are. Just because those things need to be addresses as well, doesn’t mean we should just cancel the NBN.
Is this a representative of the same SAP that delivered Queensland Health’s payroll system?
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