CRN roundtable discussion: Commoditisation of IT

By David Binning on Dec 6, 2011 1:46 PM
Filed under Software

We gathered IT pros around a table to discuss the growing trend. Read on for the full transcript.

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The commoditisation of technology is certainly making IT managers nervous, but as the attendees at CRN's recent industry roundtable all attest, resellers are well placed to help them navigate the obstacles and realise the opportunities.

Grant Cleary, director of marketing – Ingram Micro

Scott Penno, country manager – Allied Telesis

Michael Costigan, vice president for marketing and business innovation – Avnet Asia Pacific

Mathew Old, inside sales manager - McAfee

Brett Stevens, CTO – Netcomm

Domenic Torre, managing director – D-Link

Anthony Carilla, national channel director – NEC

Hwei Oh, marketing manager – Sophos

Chris Kelly, director SMB, retail – Lenovo

Norman Weaver, managing director – Dataweave

Sydney Borg, CEO – PCS Australia

In the last 12 months we have seen a massive proliferation of handheld devices such as smart phones, tablets and the like coming into the corporate world in parallel with the intrusion of social media sites such as Facebook and Twitter.

Is this some sort of fad or passing phase? Or rather are we witnessing the birth of a truly new paradigm in business computing? Is Apple the nemesis of the traditional channel?

A leading group of influential Australian technology executives recently sat down with CRN to dissect and debate this most critical and immediate of business trends, outlining both the challenges and the opportunities presented by it.

Mathew: Definitely we see this as a serious wave that’s going to remain because the amount of devices, amount of applications, amount of different operating systems and the risk that comes with it – we are seeing this every day from a security point of view. So I don’t think it’s going anywhere and I think it’s going to be here for a long time.

Hwei: Absolutely and we are seeing the start of it, it’s huge, we are seeing a lot of organisations ramp up for the extent of how it’s actually going to affect them, so definitely it’s going to be very, very big.

CRN: Let’s talk about some of the security challenges created by the BYO devices in the corporate world.

Hwei: I think the issue is whether it is BYO or whether it is actually provided by the company itself, and I think the lines are very much blurred in terms of what people use these devices for. So, for example you are given a Blackberry to use at work, and then you might have your iPhone, or iPad and tablet – so we can see that the security implications of having multiple devices and how businesses are actually controlling what’s actually happening in terms of applications being downloaded, the types of data on each of the applications. 

Mathew: Also, it’s a viral effect that’s happening within companies. If one person comes in with a laptop, whether it’s a formal program or they just come in with their own Macintosh, and all of a sudden someone goes ‘I want to bring my own Mac in and I want to start to use this’ and so that’s automatically having an effect. You see iPads now everywhere you look throughout McAfee and throughout other companies, and you see a lot of these Mac devices coming in without formal structure, so it’s a challenge. You want that productivity. You want to give them that ability to use those devices, because a lot of time they’re better than the standard environment, but you don’t want to put your organisation at risk.

Norman: One of the issues with the small devices, your iPhones, iPads, you have access to huge amounts of data, a lot of applications, you are just logged in all the time. But it’s so easy to lose those devices. The gen Y workers, your friends may not have such a corporate focus mentality shall we say. If you’ve actually got somebody who’s got some malicious intent, it’s very much easier to get into the network, or access data. Things like Dropbox are great, it means you’ve got access to your data locally on your iPad, it’s the only way to get data in a lot of sense, but it means it’s there, and if you lose that device, you lose the data. So it’s now much more difficult to secure corporate data.

Mathew: Absolutely. From a CRM having a back end database, you can now get information and access just from a simple little device like that on your iPad and it’s so easy to download the free app that allows you to access that CRM and have your sales data on that device, and I don’t know how many people have lost their phone in a taxi or anywhere else.

Anthony: How do you integrate policy around the use of social media for instance with dissemination of information? It’s going to become a real challenge, because change is going to demand the integration of social media norms and how do you apply security policy and processes around that’s going to be very challenging and a real problem I would think.

Scott: When is someone acting as their own individual in fixing something, they’re doing something in their own right as a person, and when are they representing the company, because of the whole social media thing – there are a lot of positives that come out from that. There are also a lot of negatives as well, if say your branding is misrepresented in the market. At what point are you representing the organisation versus expressing a personal view?

Norman: At all times we set our company policy which is part of our employment contract, and any time of day or night they are not allowed to post anything critical of us as their employer or our customers, or our business partners. They are not allowed – if they criticise them in a social media site or whatever, they are effectively breaking their employment contract, because these days you post something like that, even if it’s in your own personal time, or on your own personal Facebook, it’s still reflecting badly on you as your employee, and you’ve got to do that. It’s still only paper and a contract or whatever, but at least it’s trying to draw their attention to it, and this is actually a serious affair.

Grant: I noted recently with the Qantas grounding the fleet, someone posted a personal message on Twitter, expressing their concern about it, that they’d been personally affected. And I thought ‘hang on Qantas are a major customer of the business you’re employed by – so is it such a good idea to be doing that?’ – and yet he would see it that he was making personal comment.

Sydney: Speaking from the reseller’s point of view, I’m starting from the roots up on this. We’re talking about the fact that people are bringing in their own hardware. My biggest concern is that if I’m not controlling the hardware in my accounts, I’ve already lost stage one and I have to tell you I’m not a fan in allowing staff to bring in their own laptops or their own personal devices to use on the network – I’ve been in this game probably too long, 35 years, and I have to tell you that I’ve been a believer that if I don’t own the hardware, and I’m not putting in the integration and all the equipment that’s going in there, I don’t have control of the account. There’s another major reason why I have to do that, and that is that I’m not an Apple reseller. The amount of Apple iPads and iPhones that are going out there stops me from selling what used to be an NEC laptop, but it stops me selling the current vendors that I support. None of those vendors are Apple orientated.  So that is a significant threat to the normal channel in my opinion. So it’s all very nice to have the protective software and all the rules and regulations, but I want to own the account.

Mathew: But does that present an opportunity for you guys as well? Look at the infrastructure that’s needed to build out something like the cloud servers, but then you’re looking at big servers, you’re looking at virtualisation in the environment, and a whole range of other things that then means that the game changes. Is that what you’re seeing as well?

Sydney: Yes, but you still have to own those other devices. If I allow Apple to come into the game, I don’t understand Apple, so that is an issue. I can pick up an Android phone and there are similarities, but if I’m not involved in that Apple scenario, then I’m allowing that organisation to get into my account and gain strength. The next thing you know there will be Apple servers going in there and the whole domain changes. I’ve seen it happen too many times, and I’m dead against it for obvious reasons.

Scott: Surely where you’ve already got telcos and service providers that are not only providing the carriage, but they're also delivering that mobile device. It’s not that you’ve lost part of the account, but there are always multiple organisations involved with that customer so it’s really all about being able to integrate with, or work with, rather than name one or the other.

Sydney: Yes, but the trick to that is, be a carrier as well. If you want to be a systems integrator, then you’ve got to be A to Z right, you’ve got to be able to carry the whole thing, and try where possible to plug every hole you can from stopping anybody else from getting in there. Because once you own the account, then you own it. The problem with our industry nowadays and it’s certainly in the channel, is knowing there isn’t a lot of time out there to go out finding a lot of new accounts, but you damn well have to maintain the ones you have, and if you hold on to what you have, then you have some guarantee of some success or surviving.

Norman: But I don’t think you need to become a carrier. What’s going to happen is that the telephony carriers, the Telstras, the Vodafones are just going to get more and more power. Already the struggle we have in managing our telephony bill because we get a new employee, I say ‘right now you’re on the corporate plan’ and they say ‘Oh no, I’ve just bought this iPhone, and I’m on a three-year contract, and I can’t get Siemens to give me an iPhone’.

Sydney: But you can sell them that service. If you become a carrier and you can be, we’re a Telstra shop as well, so at the end of the day, you’ve got to say ‘well I can provide that as well’ – so it’s not a matter of just allowing if I want my friend to buy my phone and go and buy it from another carrier, the trick is to become a carrier, become a cabler.

Norman: But that’s going contra to the whole outsourcing philosophy. The whole point is to focus on your core business.

Sydney: I’m talking from a systems integrator point of view, not the client.

Norman: But just generally then and from an enterprise computing perspective, from an organisation whether it be a Westpac or a German manufacturer, the challenge he’s got in terms of this proliferation of devices, I’m seeing the carriers are going to get more and more strength, because the device is on the end of it and gets tied to plans, so the iPad is coming with a 3G, everything is coming with a 3G or 4G card with it, and then the carriers have got the ability to bundle things together with the service delivery, and that takes away from you as a reseller, and the reseller has the power to sell the devices individually.

Sydney: Yes, but it doesn’t take it away if you provide that product. They can go to Telstra, they can go to Optus or go to Vodafone, but if they can come to PCS Australia, then I can still supply the mobile phones on a plan, on a Telstra plan or whatever, then I’ve got them.

Scott: New employees, particularly younger ones, are looking at ‘what’s in it for me?’, ‘I want to work for an employer who’s moving forward, and I want some flexibility, I want some freedom – I want to work in this Notebook or work in an iPad or work in a particular way; ‘I don’t want to have to have a BlackBerry or be locked to a PC’. To a certain extent I think some of those needs or demands or wants of prospective employees are also going to drive change in terms of you bring your own devices, and the carrier you use as well.

Sydney: This creates a massive problem from an IT department’s point of view, for maintaining all those devices. We’re throwing out exactly what we talked about years ago, when we talk about standard operating environments. There’s no such thing as an SOE any more.

Scott: Well there is because the actual operating environment is no longer the hardware, it’s the virtualising of IT.

Sydney: Sure, but when it comes to drivers and the equipment that you want to drive in the office, then it does become the hardware.

Chris: I think the problem is recognising it, and that the force we’re up against here is an irresistible object, and like you say whether it be Gen Y driving it, people demand that level of flexibility and personalisation and I think that we as players in the industry have got to work out how we best adapt to that environment. I think it’s going to happen whether we like it or not.

Norman: You are a hardware vendor. One of the challenges we find when we’re buying new notebooks for example, is Microsoft will bring out the latest version of Windows and all of a sudden it’s been a huge success, because they’re selling so many copies. Well that’s because the PC vendors will only sell you the latest version of Windows when you buy a new laptop, and it’s actually really hard to get the old version that actually works. We connect to corporate applications, or our customers connect to corporate applications ‘sorry it doesn’t support ‘x’ but guess what, it comes pre-installed on the laptop when you buy it’ and if the hardware vendors were a little more flexible in the demands of the corporate on what their SOE needed, then I think that would be a good thing.

Brett: We have got into establishing profiles and controlling what people can actually do at work on their pieces of hardware that they bring in. I think nowadays you do have this problem that people have iPads, android devices, tablets and we’re moving into an age where everything is an application. I think it’s going to be up to either the IT departments or the internet service provider, and the telco in effect, to control what is able to be consumed or used by the consumer under a profile for that particular person.

Anthony: We see the direction going very much into that integration and applications space and into the cloud space. We see that for us our customers will dictate what it is that we will provide them. So we will provide them with apps service and SLAs and we will manage that process, whether it’s cloud solutions or the applications that we require. That’s where we’re heading, so in terms of the devices, they could be any brand, any type, provided that we give them a solution that gives them this outcome, that is the direction NEC will be taking. 

Mathew: I think it’s got to tie into your policies, and the security policies that you’ve set up what you spend a lot of time to work out, are those policies in a standard operating environment and that needs to remain consistent in how to weigh and manage that.

Brett: Yes, and I think if you do have phones and you know that person is going to be leaving your organisation and accessing that data in a mobile environment, you have also got the problem that you’ve got the local carrier who’s enforcing that profile locally, and what do you do when that person goes overseas to another country, because they’re not going to have a carrier there. So I think it’s going to be profile based for security companies if you have an application on the device that has got a profile which can work anywhere in the world, then I think that’s going to be the way business is going.

Norman: We moved over to Google Apps, so we use Google corporate mail etc, and that’s easy, because when somebody leaves, I’ve got all his mail, all his data and mail on a central server. He can’t go and wipe his PC and all his history has just gone with his Outlook. I’ve got it centralised on the server and when I go to the US I’ve just got it wherever I am, and even then, when I do leave my laptop and phone on the train, etc, but it’s easy just to pick up another one and you’re there and logged on and so from that perspective cloud is a corporate environment is really good and it helps you manage security with profiles better.Scott: There are a number of clients confused there whether it be the ATO or other regulatory bodies which require that that information be held in Australia or if there’s a period of time that that information has to be retained for, and in five years’ time you go looking for some document and gee it’s not there, well whose responsibility is that? Is that the cloud service provider’s responsibility, or a federal problem.

Hwei: I was going to add on in terms of the policies. I think what’s going to be important is that the employees need to have not just a written document that they sign, but they actually have to understand the risk and implications of what they’re actually doing in using their phones, even voice data is an issue as well in terms of could they be tapped into, what’s happening there when they’re talking about confidential company information on their phones, say in a different country. A lot of companies that we’re talking to say they’re not even sure how to develop the policy, but their employees have absolutely no idea what’s going on.

Anthony: What is bothering me more though is this aspect of social media, where a lot of people now used to using Facebook have no concept of security associated with that. 

Brett: What we’re seeing in that area as an organisation, is in the last two or three years ago when we saw Facebook becoming so prolific and so popular with everyone – especially the young adults, 18 to 24. For those people it’s part of their lives; they expect to have that access in a work environment. We blocked Facebook completely, because we found that some people were spending 80 percent of the day on Facebook in the office, just having it open and doing stuff. Same with Tweeting as well, but in the last six months we’ve just completely opened that all up, purely for the fact that a lot of people are using Facebook for a business application as well now. You get to the point in an organisation where you actually start monitoring the content. So that if they are on Facebook you start doing searches on the sort of words that they’re using which is to flag, are they doing real business related to work are they doing CRM stuff and trying to increase the sales of the company?

Grant: I think the risk is though that after the message is out there, it’s then too late to moderate it.

Norman: Another question I wanted to ask people; we talked about devices, how do people feel about the fact that the lifetime of the device is just coming down and down and down, and your iPhone 3, 4 whatever, is six months, three months? How on earth do you manage a corporate policy for devices and rolling out devices, when by the time that you can actually roll out around your organisation a new device it’s obsolete?

Scott: I think this is where it’s about the application rather than the actual underlying hardware platform, because when you talk about something that’s application based or virtualised, it’s independent of the platform, but you can bring your own and you can update it for three months or three years, it doesn’t really matter.

Sydney: But they don’t all work.

Scott: That’s true, but sure you can update your phone every three months, but they don’t all work. They all come out with bugs or problems, there are issues, driving issues, features of the device. I can’t get this driver to work etc.

I think there is an increasing opportunity. I mean we’ve all talked about policies and education and there is definitely opportunity here for technology organisations, not just to be people or organisations that are talking about technology, but also providing guidance to their customers.

CRN: The other thing we are probably all guilty of is wearing rose-tinted glasses with regard to cloud applications and things like Google Apps and Google Docs. But how well do they really integrate with existing systems, the Oracle systems and SAP systems?

Norman: Well yes, so the integration is definitely a challenge. Things are getting better, but there’s no getting away from the fact that data is in several places. Google Docs is a great environment, but the formats are not truly interchangeable yet with the OS that everybody uses. We use Oracle CRM so we’ve got all our customer contact data in the CRM, but then we use Google Docs for sharing information, and people are still using Outlook on the desktops and to be quite honest, it’s a bit of a muddle and in terms of managing the data interchange between them. I’m sure it’s going to get there, but it’s still an immature technology.

Sydney: Is it really in the interest of vendors getting there? Where you have major corporates and global organisations that control swathes of the market, do you really think it’s in their interest to do this? They’ll probably actually string this out as long as they can to try and make as much money as they can.

Norman: I don’t think it’s the corporates’ desire to string it out. They’ve realised that they can’t rule everything. They’ve now realised that different organisations have got different businesses, and that’s just too hard, so they’re going out and buying the best of breed, and they’ve got a huge integration challenge, which they’re trying to address. As fast as they address it there’ll be new point applications coming out and in the same way as the lifetime of a device seems to be shrinking, the lifetime of an application seems to be shrinking. There’ll be a new CRM or a new HR system come out over here that someone’s going to want to buy and integrate that data, and I don’t know the answer, but I see it as a challenge. You’re going to have replicated data in multiple places in the cloud world and there needs to be policies and systems to manage the integration of that data, and I think that’s one of the opportunities, to have some form of integration platform to help manage it all.

CRN: Where do you think the money is for resellers? Of course the initial outlay is negligible for an organisation because people are bringing their own devices, their own knowhow, their own Facebook accounts and so on, so where does the industry actually make a dollar?

Norman: As a reseller one of the threats that we see is the move to the cloud. It’s a direct sales model – why do I need resellers? – I’ve got telesales guys and all the stuff all runs in the states. The whole cloud thing is an opportunity as well as a threat, but the whole software resale model is changing and so once again it’s going to have to be a move to services around how to migrate your business into the cloud model, and how can I retrain your sales force to make use of this online CRM and how can I set up your internal sales processes on the CRM rather than ‘here’s a piece of CRM software, let’s go and spend $2 million configuring it, good luck guys'.

Mathew: The key though is those are transactional systems that you don’t want to actually put any performance degradation on, so you need to be doing that, without actually affecting the performance.

Norman: Well either that or architect the environment to make allowance for it, because it is important. As you say security is important, and encryption is important, but it’s only one of the things that you need to look at doing.

Brett: With all the problems we have with all these devices in the office space and office environment – if you do have a person who brings their tablet or their smart phone, is it an idea to say ‘well you can use the smart phone in the office or outside the office when you are going mobile, but we would like to be able to set what the access is in terms of when you access that device. You need to also be able to have that remote wipe feature.

Mathew: And again we look at an endpoint device, regardless of what it is, as an endpoint – so having the security to actually do what you’re talking about is there and it’s being used now by many organisations that are starting to see all these iPhones and iPads, it actually forces a lot of the native security on a device to be enabled, if you want to restrict access to that environment.

Those features and functionality of mobile management are there, but to tie it all in and to lock in to your security practices and security policies, is really where you start to get the power of having one centralised management environment, and looking at endpoints and looking at security as a whole, across all devices, all machines, all laptops, all servers etc.

Chris: I think back to the question about what’s the level of education or information that needs to be processed. Your average CEO of a large corporation has probably read about it, heard about it and that would be across most of the threats and familiar with the common techniques to avoid them. I think the challenge further down the line to an SMB/SME type organisation where they don’t have that internal IT structure that’s when companies such as those represented around the table here have the opportunity to go out and advise on that policy. Information sharing has to come from the system integrated reseller community to move away from advising ‘here’s a piece of hardware you should install’ ‘here’s about how you should install it is a policy you should have across your business, and here’s an update that we’ll talk about in six months’ time and twelve months’ time beyond that. That’s how I think you get integration.

Norman: I think that’s a really, really good point, but supplementary to that, directors of a small company to a large ASX listed company, have got a fiduciary duty for governance, that’s part of the role of the director, and I think to your point, we as resellers and IT professionals shouldn’t just be educating the IT managers, we should be educating the board and institutions such as the AICD to make sure that it’s on their agenda that their directors know.

Chris: I definitely agree, and the key point I noticed, you may have it locked down today and you may be safe today, that certainly doesn’t mean that you’re going to be safe tomorrow or next year, and you’ve got to be constantly checking and monitoring and I think that’s where the ongoing education is absolutely required.

CRN: Where do you think the money is for resellers? Of course the initial outlay is negligible for an organisation because people are bringing own devices, their own knowhow, their own Facebook accounts and so on, so where does the technology industry actually make a dollar?

Norman: The margins on hardware are dropping and dropping all the time- services, it’s a competitive marketplace, services is a challenge, because your capacity is limited by the quality and capability of your people – but that’s where the opportunity and the margin is by putting services around the hardware, delivering the complete solution to meet the businesses’ needs, advise them on security, provide them the support that they need so they don’t have to employ their own security expert.

Chris: I think the opportunity also lies in what you said earlier, a company should by all rights focus on its core strengths and given how complicated this topic is becoming, and that’s [commoditisation ] a specialty on its own. So I think to answer your question of where the money is, it’s about providing not just a piece of hardware, but making it a solution and making it secure, and a solution that has longevity – and that’s where I guess the financial reward would be for companies in the IT game, to make sure that you’re up to speed and you can be that trusted adviser to a company. 

Michael: Two points I’d like to make here. In the mid-market where the money is it is all around solutions, and a lot of people this morning spoke about how it’s easier to retain the customer than it is to go and get a new customer. So picking up on Norman’s point it’s about the ability for the reseller to go and sell that solution. We’re seeing a lot of our traditional infrastructure partners coming to us, and now they’re wanting to sell solutions. They’re wanting to dip their toe into the services base, and when I say service, that’s not just technical services, it’s about educational services. There’s a lot of need out in the marketplace for education on cloud for instance – what does that mean for my organisation? – so it’s been a lot about our reseller partners driving those types of services as well. 

Anthony: I think that really from an NEC perspective we need to transition our channel to more service oriented type of business, and supporting them with a traditional platform and hardware solution, to provide them but training them to become a lot more service oriented in terms of organisations. We are also attracting a lot more systems integrators into our business, which is also I suppose reflective of the way the industry’s going, and I think that unless you’re in that space, where you can provide services by a simple integration model, I think the drop box days are well and truly over. This is going to be one of the pull-throughs of the solution, having systems there, but ultimately it’s about that service, and that personalisation of those organisations, creating that strong relationship and as you say becoming that trusted supplier.

Mathew: Naturally I think that security is a really big opportunity for the channel. Taking that away from a smaller customer and giving them the ability to leverage some of the hosted services or cloud services, it’s still all required, something that’s going to secure and protect your data from the device right up to the data centre and right into the data that you’re trying to deliver to these organisations.

CRN: So the professional service is going to change?

Norman: Yes, your consulting is going to change.

As another example, Oracle has just brought out this device the database clients. It’s got servers, it’s got storage, it’s got network, it’s got database, it’s already pre-installed. What would normally take us 10 to 15 days to install, plus the database system, is two and a half hours. You plug it in, eleven streams can figure out where you go, and so our services model is having to change. This is the tip of the wedge. We’re going to have to change, and I think a lot of resellers are going to have to change in the cloud model. It’s not just hardware, I think it’s software. The old open source model: ‘Ok I might give you a grand a month in support, but what’s this licence fee thing? In five years’ time it’s going to be like that, whether it’s open source or whether it’s still proprietary, but I can see software vendors are going to have to be moving to ‘no you don’t have to pay a licence fee, you pay a monthly subscription fee, or a support fee, or whatever you want to call it, that’s the way the model’s going to go. Where is the software licence retailer going to be.

CRN: Is this going to result in a dumbing down of the IT manager do you think?  It sounds like the IT manager himself might soon start thinking ‘why am I here, what is my purpose now’?

Norman: There’s a huge issue. The IT manager is losing power. Who buys CRM On demand? Not the IT department. The sales director goes to the IT guys, ‘oh by the way we just bought this and rolled it out to my sales force but some of my guys are having trouble running it on their laptop, they’ve got the wrong version of Internet Explorer, can you sort it out for me please’.

Anthony: However, that’s a blessing in disguise, because one of the challenges for resellers is being able to talk at the CIO, CFO and CEO level, and so this pushes up our discussion beyond the IT department to one which is driven by business outcomes. So to that degree it does change the conversation you have with your customers, and it forces you to lift up that ante because traditionally we’ve gone into that IT department or systems administrator or whomever else they’ve been sending to and that’s always been a difficult one, because I know so many organisations have gone over the top – so in that regard it’s going to force organisations to go up that tree, and start talking a different language with them.

Dominic: The other thing that may have a completely different connotation is that I actually think that other industries, such as the motor vehicle industry will start going into services more as well, because of the electrification of cars and those sort of things, and they are now leasing cars providing overall plans.

Norman: That’s right, because in the car industry, you don’t go to your dealer to buy your car, you go to your dealer to choose your car. You do some research online, you go to a few showrooms for a test drive, and then you buy it either through your leasing company or through some online people.

Scott: The other one that there is that there is a shared or communal car model, where you pay a subscription fee and use it for a certain number of hours, and when you exceed the hours on the vehicle, you pay more.

CRN: I thought it was interesting Sydney characterising these trends, particularly in regard to Apple products, like some sort of locust plague….. is anyone else as concerned about Apple? Are they now the rapacious monopoly Microsoft was once viewed as?

Scott: You can actually look at the hardware platform, and if you look at Apple as a hardware platform it’s significant, and I think that it’s great that any other mobile device hardware platform, but then you start to look at the operating environment, the operating system running on that, and between android and the IOS, there’s a pretty even split there, so I’m not convinced they’re a monopoly. They might be the trendy choice amongst those consumers that want to have a choice.

CRN: Isn’t it true there’s been far more security problems on the android platform than the IOS by a factor of double?

Hwei: Just in terms of the fact you can get applications from anywhere for android versus the locked-down Apple alternative. We’re seeing a lot of malware for androids, but then there’s that misconception that you’re completely safe on Apple.

Mathew: I heard the other day that there’s about a 70 percent increase in the number of malware attacks on the android devices. Apple tried to secure it and hold the controls whereas Google are just very open and therefore it’s not as hard to control – so what we’re starting to see is that malware showing up on the androids, a lot more than Apple and that’s going to continue to create a challenge. 

Hwei: And with all the prevalence of jail breaking on iPhones as well, we’re letting in a whole raft of things.

Norman: So I see the whole model is changing dramatically. Another example where coming back to social media, we talked about Facebook and Twitter – we haven’t talked about Linked In, which in a business context is I think even more important. It is a threat to Seek. Seek and My Career. We’ve also got a recruitment business in addition to the service systems integration business. I set that up because one of my biggest challenges to growth is finding quality people for business consultants as well as technical consultants – but these days, okay they’ll still post an ad on Seek, but they’ll get the best results by going through Linked In with a roll and say ‘I need these skills, who’s got these skills in the marketplace, what’s their experience’ and so or ‘if they don’t who do you know’ and it’s just through a network.

CRN: Dominic, you mentioned earlier that D-Link is looking at expanding its business channel – to what extent is the commoditisation of IT driving that do you think?

Dominic: What we think is the infrastructure services where the whole market is actually heading. If you look at the Australian marketplace, it’s predominantly SMB. You’ve talked a lot today about the fact that smaller organisations don’t have MIS managers, they don’t have anyone to look after their networks, so it’s an opportunity to be able to deliver services, or infrastructure as a service to these organisations. These organisations particularly wouldn’t have access to the technology that the big boys have, so the PRV systems, even email for that matter – so the ability to be able to deliver infrastructure as a service is I think one of the big things that we as a company would see an improvement in, purely because we really are predominantly an SMB company.

Norman: Do you see that there’s room for the small infrastructure as service providers, because obviously Telstra and the big boys are getting into this very heavily. Every data centre provider that I talk to is also launching infrastructure as a service, and I talk to all the telcos are launching it, and a number of my customers are saying ‘well actually we’ve downsized our business, but we’ve still got this big IT infrastructure, would you be interested in using our IT centre, and we could provide you hosting services’ and everyone seems to have it on their agenda. Is there room for all those players?

Dominic: Definitely I think so. I mean what we’ve been calling for cloud has been around for donkey’s years. What have we been waiting for? We’ve been waiting for technology or broadband to pass, we’ve been waiting for 3G, waiting for 4G, to be able to give us that mobility around the place, and you can actually access these clouds and be there.

Chris: Another thing that’s driving quite a bit of change is that the cost of storage is just decreasing all the time – so where the cost of actually processing information into the base service would almost be prohibitive in the past, because of the cost of storage and processing infrastructure, today’s storage and processing infrastructure is relatively cheap and enables you to do that with data centres, there’s so much processing power and storage to be able to host all this information and applications.

CRN: Interesting you make the point of faster network speeds, to what extent do we feel that faster broadband speeds, and in particular faster wireless broadband speeds with 4G LTE are driving these trends, and obviously people are able to access more information on their devices and downloading the richer files.

Norman: I think it’s still seen as an inhibitor. I don’t think that we’re there yet. I think that the lack of broadband, I think once 4G and higher wireless speeds get rolled out, I think you’ll see a burgeoning of applications. At the moment the applications are there, the access is there, but it’s very frustrating to use, because the download speeds, the response speeds when you’re interfacing to your back end RP applications are that slow, and the cost. And data platforms can be expensive as well.

Chris: That’s largely specific to Australia, elsewhere in the world in the same way as we’ve got the capture of ADSL, you’ve got the same sort of thing with your mobile plans.

Dominic: Yes, we hear the telcos quite often here in Australia about their speeds and feeds and how much we pay for their callback. It’s actually not that bad. You are paying for a service that you actually can’t get in some countries.

Having travelled around the world, I look at Europe alone, the broadband network there, the 3G networks there are terrible. You can’t get on the network, they’re so bad that they have to actually force you to get off the 3G network to access the data network through a wireless network that might be in a coffee shop for argument’s sake, so there’s a lot of that going on. Taiwan is the same and parts of Asia are the same, and so I’m not so sure about the speeds themselves being too slow.

I think we’ve got the speed, I think it’s more of a contention issue the number of people that are actually trying to access those services, and one of the things we talked a lot about security and we talked a lot about cloud itself, and what you can use the cloud for and so on, and not enough thought is actually being put into the actual infrastructure that might be running the network within your own office, within even the partners delivering you the cloud service. So it’s important if you want to become a cloud provider, or provide cloud infrastructure as a service, it’s important that as a reseller or an integrator that directly selecting the appropriate products to run your computer product, because there’s no point just having storage there that nobody can get onto and access.

Norman: The other thing just sitting behind the wings, behind the cloud applications, are waiting there to consume every piece of network that we can get, is VOIP, and the VOIP hasn’t seen the massive rollout yet, simply because and I think it’s your point it’s a contention issue, that the panel just isn’t there, not corporate grade at the moment, because we put VOIP in but at 3.30 every afternoon the calls would die, because Tom and Sally come home from school and get on the internet, and all of a sudden the local ADSL gets overloaded, but once we start rolling out high quality 4G wireless etc, and NBN, I think VOIP is going to go through the roof, as soon as the network can support corporate grade VOIP.

 
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CRN Magazine

Issue: 325 | March 2014

CRN Magazine looks in-depth at the emerging issues and developments for the channel, and provides insight, analysis and strategic information to help resellers better run their businesses.