What's in store for the Australian IT industry in 2013

With the world left unharmed by misread Maya calendars in 2012, it's time to look at what is expected from the year ahead.
Written by Spandas Lui, Contributor

Contrary to predictions by the Maya, 2012 ended apocalypse free, and 2013 has clocked over without a hitch. That leaves us with another year to scrutinise the IT industry, and another set of predictions for 2013.

Having spoken to pundits from the IT analyst and vendor communities, it would appear that old trends from 2012 will carry over into 2013. You guessed it: cloud computing, big data, and telecommunications are still the hot topics.

But before you roll your eyes and exhale an apathetic yawn, it's not merely a matter of more companies taking up more services in each of those three categories.

Changes are expected in those three areas in 2013.

Cloud computing

Cloud computing has already dominated the IT industry for several years, and 2013 will not escape this fate. With almost all IT vendors now having at least one offering with the word "cloud" slapped onto it, the term is now so overused that it has led to what has been dubbed as "cloud fatigue."

What will be different this year is just how the cloud will be perceived, and how companies choose to take up cloud-based services, according to pundits.

But what there seems to be disagreement over is exactly how much Australian businesses, particularly enterprises, have warmed up to the cloud.

According to CSC and Veeam, Australian enterprises have been relatively slow in embracing the cloud.

"Cloud adoption in Australia hasn't been as rapid or aggressive as it could have been for a number of reasons," Veeam technical director Charles Clarke told ZDNet. These reasons include enterprises being tied down by legacy IT infrastructure that they have already heavily invested in, as well as compliance complexities.

But Google's managing director for enterprise in Asia-Pacific, Doug Farber, contested this sentiment.

"Certainly at Google, we have seen great cloud-services adoption across all industry verticals and segments," he said.

Analyst firm Frost and Sullivan noted that Australia's cloud-computing market was worth US$882.4 million in 2012, with a trajectory of reaching US$3.33 billion in 2016, growing at 40.3 percent per year. The firm said that Australia is leading cloud adoption in the Asia-Pacific region.

"In Australia, 43 percent of businesses have adopted cloud computing, the highest in the region," Frost and Sullivan vice-president of IT practice Andrew Milroy said.

Regardless of who is right, this year, we can expect even more cloud services being taken up.

One item that everybody can agree on is just how the cloud business will change in 2013.

Cloud computing will no longer be viewed as a panacea to all IT woes, with companies becoming more selective on what cloud services they want to take up. In other words, companies are wising up to the technology.

"We'll finally stop saying everything is going cloud, and get real about what fits and what doesn't," analyst firm Forrester said in its 2013 IT industry predictions report. "We now have enough understanding about what makes cloud platforms different from traditional virtual infrastructures and traditional hosting environments to make architecturally sound decisions about which applications to move to the cloud."

Clarke said that IT managers are going to be more selective in terms of what they want to put in the cloud, and advises them to do their sums carefully in order to determine the right course to take with their IT infrastructure.

"What's going to happen is a lot of organisations will need to calculate for individual services, and determine which ones make economic sense in the cloud, and which ones make economic sense to be hosted in-house," he said.

According to Clarke, 2013 will also see a rise of smaller players in the cloud industry.

"Cloud is now not being perceived as a monolithic thing that it previously was," he said. "It was thought the cloud belonged to big vendors like Amazon, Google, and Microsoft — to some extent, it does — but what has been really interesting from a Veeam perspective is how the cloud, for our customers, is really a diaspora of smaller players that are providing cloud services."

Forrester also predicted that this will be the case in 2013.

"While Amazon Web Services [AWS] has opened up a substantial lead in the cloud-platforms market — arguably as large as 70 percent market share — in 2013, we'll see that market position give way to a cadre of strengthening competitors and new entrants," the analyst firm said.

Big data and storage

As per 2012, this year, we will continue to see big data play a big part in the IT industry. Those that hold data hold power, and companies will rapidly generate and gather data for analytics purposes.

According to Hitachi Data Systems (HDS), a lot of attention will be paid to secondary data that's generated from copies and backups as a result of the big-data trend. The cost of managing all of that data will drive companies to look more into consumption-based storage offerings to keep costs down, HDS Australia CTO Adrian De Luca told ZDNet.

"What we have seen from our larger customers is that they prefer to move to a utility-based model for the consumption of their storage," he said. "What they are really looking for is to have some predictability around what their storage costs will be."

De Luca harked back to the Thailand floods in 2012, which caused a global shortage of disk units, since many storage manufacturers had operations in the country. The companies that had taken up utility-based storage from service providers were unaffected, he said.

"They continued to get committed pricing from their vendors," De Luca said. "It does provide a level of certainty in times of uncertainty."

Certainly, companies are fervently capturing data, but, according to EMC, only 40 percent of the world's big-data potential is being realised. The storage vendor believes that the challenge now is to make use of the data, regardless of the size or speed that it is generated.

This means that companies need to modernise their infrastructure and applications for them to build big-data technologies and methodologies into their operations, according to EMC country manager Alister Dias.


Telecommunications companies have been facing slimmer margins in a market that has been near saturation point for some time, and all of the major players have made huge investments into offerings that are more aligned with IT than traditional telecommunications services.

Telstra and Optus have both pumped hundreds of millions of dollars into developing cloud-based services, hoping to get a cut of the lucrative cloud business. And why wouldn't they? The big players own high-speed network infrastructures that are used to connect datacentres across the country.

"However, these organisations will continue to face stiff competition from domestic and international rivals," Dias said. He highlighted AWS' move to open its first Australian datacentre in November to cater to local clients that want low-latency hosted services, and to address data-sovereignty concerns.

But telcos also have another line of business that is set to make some big bucks in 2013.

According to analyst firm Ovum, mobile broadband represents the single largest opportunity for telcos globally to claw back revenue. Ovum forecasts that mobile broadband will grow 19.2 percent per year, generating US$122.9 billion in incremental revenue from 2013 to 2016.

"The recovery from the 2009 recession has been weak, and the ongoing global fiscal crisis continues to present a risk to the telecom industry," Ovum chief forecaster John Lively said in a statement. "Over the next three to four years, both fixed and mobile operators will face the same fundamental challenge: to increase new sources of revenue fast enough to offset the decline in mature services."

(Thumbnail: Fortune teller with her crystal ball image by Aarrttuurrr, Shutterstock)

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