Devnet Cloud View & Web Industry News

ARN - April 22 2009

Industry players from all sides of the fence have warmly welcomed the Federal Government’s plans to build the national broadband network (NBN) as a publicly-owned infrastructure project.

The popularity of on-demand computing and hosted-based services, such as cloud computing, will accelerate with next-generation broadband availability, managing director of cloud computing provider and Google partner Devnet, Craig Deveson, said. “That this decision has been made is fantastic and widely supported,” he said. “It will greatly enhance the take-up of hosted and cloud-based services. It hasn’t been as much of an issue in the city areas, but having constant networking speeds right across the country helps everybody. It’s going to be great for cloud computing and for businesses like ours.”

Melbourne IT chief technology office, Glenn Gore, was also pleased with the Government’s NBN plans and said anything that increased access and the number of services offered to 5MBs and rural people was a good thing. “The NBN won’t affect us directly, but it will create a more open market and new services, which will provide the industry with opportunities. There will be higher quality content and interactivity as a result,” he said.

Strategic planning manager for Tasmanian IT provider Tops, Robin Cox, also saw the NBN news as opening up more options for customers, particularly those state-based businesses. “We are a very-broad based company and on the telecommunications side, we align with Telstra and we will proceed as normal,” he said. “My under- standing is that Telstra can be part of this broadband solution as well, so it can only be a positive for us.”

But while it has potential, Gore warned success of the NBN was not guaranteed. “It depends on what incentives are offered as to how many people and organisations will sign on with the technology,” he said. “If you look at the other countries that do have faster networks, the uptake is there, but the higher quality media streaming and distribution content needs to be there.

Bandwidth constaints, as well as a lack of appropriately designed technology, were the bane of hosted applications in the early days of ASPs. Deveson claimed technology had matured to the point where users could now get a decent experience with current broadband offerings.

“The bandwidth issue is less restrictive with Google Apps and the like these days because the way the applications have been written means you can get a good experience with variable bandwidth, but a great experience with good bandwidth,” he said. “[This decision] is a confidence booster.”

Like-minded Australian ISPs claimed the NBN had the potential to be the most significant change the industry had seen since deregulation in 1997. Equitable pricing and access to the network would also lower barriers to entry, resulting in more providers able to invest in the local market and stimulate competition, Macquarie Telecom national executive for regulatory and government, Matt Healy, said in a statement.

“At lastwe will have a National Broadband Network that will be a network regulated for competition like other utilities such as gas or electricity. This means retailers will have equal access to the national network,” he said.

The decision also gives Telstra the ability to engage with the Government on the broadband rollout. Internode managing director, Simon Hackett, said that while it would most likely be 10 years until the NBN project was complete, given the time needed to properly run the request for tender process, having government as the majority owner with intended privatisation five years after building the network was exactly the right idea. ICT industry bodies also united behind a Government-owned wholesale- only fibre-to-the-premise (FTIP) network across Australia.

“It is what we have been wanting for years in terms of regulatory changes around the structure of the industry,” Competitive Carriers Coalition (CCC) executive director, David Forman, said. “This can take us further than if we had relied on commercial options on the table.” AliA CEO, Ian Birks, was surprised by the decision, but saw it as a positive and innovative result.

“This will provide a much needed stimulus to the ICT industry in this economic climate,” he said. “It will give a good boost to certain sectors such as software and development.” Birks lauded the job opportunities availableto the ICTcommunity as a result of the proposal. The Rudd Government claims 37,000 new jobs will be created at the outset, and an averageof 25,000 jobs per year during the course of the project.

Despite the Government corporation’s ability to assuage the ICT employment downturn, skilled workers shortage is still a lingering issue. Birks, along with ACS chairman, Kumar Parakala, saw the need to employ on a local and international scale. “I think the NBN project will have a number of well-known investors and they will overcome this shortage either by hiring locally or from overseas,” Parakala said. “When it issomething of this nature, there will always be a need for skillsfrom countries that have done it very well.”

While the long-awaited announcement may have closed a chapter in the NBN’s history, Birks stressed it is not the end.

“This marks the beginning, not the end of Australia becoming a true digital economy,” he said. “As the network is set-up, value-added services for economic growth such as eHealth, eCommerce and education reform will be put into the spotlight.