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Tech evolution creates opportunities for CIOs

Trevor Clarke (via AFR) | Feb. 25, 2013
The rise of mobile consumer devices means companies are adding new IT procurement models to the mix, and this means that information technology departments are expanding their reach.

Yes, non-IT people are now more influential in this procurement discussion, but IT is still very much at the helm.

It is also worth noting that there is still a strong supply of servers (including new mainframes) and multiples of terabytes of storage being shipped into Australian enterprises.

While overall hardware spending is declining - by about 5 per cent in 2013 in Australia, according to technology research firm Gartner - and some of these dollars are moving into cloud services, this decline can also be partly attributed to a very mature market with evident price erosion and the consolidation of applications onto fewer servers via virtualisation technologies.

But to cut an often long debate about cloud and on-premises IT usage and procurement short, while public cloud is definitely changing the profile of technologies and services in place - and consequently demanding CIOs acquire new skills to deal with the implications - it isn't replacing on-site IT. What is happening, though, is a gradual evolution of on-premises IT to adopt similar "utility" characteristics (Commonwealth Bank's "everything-as-a-service" strategy being one notable example) and morphing into hybrid service delivery models.

"We are seeing customers create procurement initiatives which move the organisation towards an on premise utility model, rather than the historical model of a large upfront procurement cost, based on a fixed-term outsourced contract," VMware ANZ's vice-president and managing director, Duncan Bennett, says.

"This means enterprises have far greater control around cost and procurement and can pay based on actual utilisation month to month."

On the mobility front, more and more organisations have given smartphones, tablets and notebooks to their employees or enabled them to bring-your-own-device (BYOD).

This has fostered a wave of mobile applications and investment in tools to secure and manage devices and data such as mobile device management (MDM) or client virtualisation.

"Over the past two years, there has been increased demand for 'bring your own device' from customers, particularly in the financial, professional services and not for profit sectors," Optus business mobility and convergence vice-president Phil Offer says.

"The majority of tenders we work on now include a BYOD requirement."

To some extent (although this is difficult to quantify and coloured by a lot of new expenditure) this mobility explosion has also shifted spending on mobile devices - especially tablets and smartphones.

The shift has been away from traditional enterprise procurement channels and into retail stores, predominantly to the benefit of Apple.

The maker of the iPhone and iPad pulled in close to $6 billion in revenue in the 2012 financial year, which is five times more than its 2008 results, while other retailers, such as Dick Smith, David Jones and Harvey Norman have struggled with computer related sales.


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