by Georgina Swan

NBN to drive Australian business technology

Oct 06, 2010
Cloud ComputingEnterprise ApplicationsFinance and Accounting Systems

About 70 per cent of Australian organisations think the NBN will better enable their business, particularly in the areas of video conferencing, virtual desktops and IT as a service, according to IDC research.

Speaking at the CIO Summit 2010 in Melbourne, associate vice-president for research, Tim Dillon, presented the finding as part of IDC Australia’s Forecast for Management Survey 2010.

“Most of the organisations said, ‘yes – the NBN would help their business’,” Dillon said. “So we said to the same group of organisations: ‘Where do you think that’s going to help your technology base?'”

Some 36 per cent of those consider the NBN will better enable video conferencing technologies. Virtual desktops, however, topped the list, with 68 per cent.

“Virtual desktops – it’s very high” Dillon told the audience. “I don’t necessary agree with that in terms of what an NBN environment does to enable thin clients. It will certainly support it – without question – but I’m not sure it’s a driver.

About 50 per cent of organisations consider IT as a service will come into its own under a national broadband network. Dillon said infrastructure as a service solutions were beginning to mature.

“There are some pretty good solutions out there, frankly,” he said. “The SLAs and pricing models are starting to come in place so there is some flexibility available. The pricing models are clearer but I think they are still potentially punitive. But nonetheless, from an enablement perspective, it is certainly going to drive a lot of activity.”

About 70 per cent of organisations surveyed said they thought the impact of the GFC has passed – a figure that was fairly consistent across small, medium and large organisations. This hasn’t necessarily translated to IT budgets, however.

“What we have seen is the average size of a budget increase is 2.33 per cent,” Dillon said. “It’s not a particularly big increase – it’s an average number across a disparate group of organisation. [Organisations] have all this potential optimism, but [they’re saying] we’re not going to give you the money to do it.

“As a CIO, we are expected to support business recovery. The problem is we’re not getting the dollars to do it. And this is starting to shape the spending patterns of technology.”

The survey also looked at IT spending as a percentage of Opex, a percentage of revenue and a percentage of special projects.

“I think special projects will stabilise at about four per cent,” Dillon said. Spending as percentage of revenue is also at about four per cent.

“The thing for me is IT and Opex,” Dillon said. The ‘sweet spot’ for spending on IT as percentage of Opex. is considered to be between three and six per cent; 10 per cent is considered ‘agressive’.

“I personally think we are spending too much and I’d like to think that number will trend down. How it will trend down will be interesting,” Dillon said.

Other issues identified in the survey included virtualisations, cloud, ROI, staffing and BYO computing models.