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Abstract, Jackson Pollock

Gartner says NZ IT spending will reach NZ$11.4 billion in 2017. That’s up 2.3 percent on last year.

This is less than the expected 2.7 percent rise in global IT spending.

The reason for New Zealand’s underperformance is that nation’s biggest IT spending category is fixed and mobile communications services. It accounts for almost 40 percent of all NZ IT spending.

Gartner says growth in this sector is likely to be flat over the next two years.

In 2016 we spent NZ$4.36 billion on fixed and mobile communications services. Gartner’s projection puts 2017 spending at NZ$4.38 billion. That’s a rise of about 0.6 percent. The estimate for 2018 is NZ$4.43 billion.

Meanwhile spending on software will rise from NZ$1.4 billion last year to NZ$1.5 billion in 2017 and will reach almost NZ$1.7 billion in 2018.

Segment 2016 YR 2017 YR 2018 YR
Devices     1,541     1,572     1,556
Data Center Systems         400         402         398
Software     1,421     1,541     1,674
IT Services     3,442     3,518     3,599
Communications Services     4,355     4,383     4,432
Total   11,159   11,417   11,659
Gartner – all numbers in thousands of NZ dollars

Australia’s largest sector is IT services. Gartner says software will be the fastest growing sector in 2017 for both New Zealand and Australia.

Global spending is set to total US$3.5 trillion in 2017. Gartner says the year was set to see a rebound for the industry. It originally forecast 3 percent growth. However political uncertainty means the analyst company has dialled back its optimism.

Gartner research vice president John-David Lovelock says the uncertainty means there’s a wait-and-see mood with many enterprises forestalling IT investments.

Cloud, blockchain, AI all trending

He identifies the big trends as cloud, blockchain, digital business and artificial intelligence.

The analyst expects worldwide spending on devices, PCs, tablets and phones to stay flat at US$589 billion.

Gartner says a PC replacement cycle, strong pricing and functionality will help drive growth in 2018.

We’ve seen similar optimistic projections before now. Some from Gartner. It’s hard to know where that replacement cycle will come from. Technology sales have been falling for years now. Even if it does kick-in, the industry needs more than replacements to see a fresh wave of growth.

Things are strong in the IT services market. Gartner expects the global market to grow 4.2 percent in 2017. It says this will come from investments in digital business, intelligent automation and services optimisation. The report goes on to warn buyers remain cautious.

IBM says Macs cheaper than PCsThe jamf blog covers a presentation by Fletcher Previn, VP of Workplace as a Service at IBM:

In 2015, IBM let their employees decide – Windows or Mac. “The goal was to deliver a great employee choice program and strive to achieve the best Mac program,” Previn said. An emerging favorite meant the deployment of 30,000 Macs over the course of the year. But that number has grown. With more employees choosing Mac than ever before, the company now has 90,000 deployed (with only five admins supporting them), making it the largest Mac deployment on earth.

But isn’t it expensive, and doesn’t it overload IT? No. IBM found that not only do PCs drive twice the amount of support calls, they’re also three times more expensive. That’s right, depending on the model, IBM is saving anywhere from $273 – $543 per Mac compared to a PC, over a four-year lifespan.

IBM is now the biggest Mac user, so the business technology giant’s experience is important. By any standard 90,000 users is a significant sample size. The total cost of ownership matters when you measure users in tens of thousands.

And we’re talking here about the company that started the PC ball rolling 35 years ago. That must count for something too.

 

Frazer Scott Microsoft NZ“No-one has the breadth of services and offerings that Microsoft brings to bear in this space”.

— Microsoft New Zealand chief marketing and operations officer Frazer Scott

At Intergen Dynamics Day 2016, Frazer Scott outlined Microsoft’s strategy to help companies with their digital transformation. This is the context for Dynamics 365.

It all boils down to four pillars and three trends.

Scott says we are living through a fourth industrial revolution. Or, as Microsoft describes these things Industrial Revolution 4.0.

He says: “There’s a blurring of the divide between the physical and digital worlds”.

Microsoft Azure

While the trends are big data, analytics and cloud computing, Scott says cloud is the underlying technology. Hence Microsoft’s massive investment in its Azure cloud service.

Microsoft four pillars of digital transformation are:

  • Engage your customers. Scott says the goal is to have a “market segmentation of one”. This means using analytics tools to mine data for a complete view of each customer. Then gain insight into the customer before giving them a personalised experience.
  • Empower your employees. Recognise they are mobile and celebrate individual work styles. You need to realise that allowing employees to be more creative will pay off with greater responsiveness. Also use tools to give your staff better insight so they can make better decisions.
  • Optimise your operations. A modern business needs to be more responsive and agile.
  • Transform your products. Is about disrupting markets with new products and services, even by introducing new business models. Instead of looking back, you can use data and analytics to anticipate what will happen.

Speaking at Intergen Dynamics Day 2016, Jucy Group head of technology Tristin King talked about choice. 

King says there are two types of choice. The big ones are all about desire and by need.

He says: “The other type of choice is an ugly choice, it’s a burden to most of us much of the time. These are small choices and they are often really hard. They are hard because they are driven by logic, by risk and the fear of missing out — even if it is only a minor thing”. 

We make a lot of these choices. King refers to a Cornell University report which says we each make about 200 choices about food each day.

These take up a lot of time. Another study looked at more important decisions. It says adults make 27 judgements every day and we might spend as long as nine minutes making each judgement. 

King says: “That’s four hours a day we spend making choices.”

When it comes to buying a new phone, we can be overwhelmed by choice. Even once you’ve decided on a brand there are more choices to make. There are technical matters such as camera, screen resolution and so on. Then there are decisions about where is the best place to buy a phone. This can take hours.

Then many of us go through the same process when it is time to update the phone. King says: “We get in this loop of decision-making. We worry about which is the best phone and about whether we get the choice wrong.

But for a bunch of people there is no choice. They are going to buy an iPhone. King says Apple is now the world’s biggest company and makes a great margin, He the most amazing aspect of this is that Apple has just a nine percent market share but 73 percent of phone profits.

He says they did this because they removed choice. “Apple understood what people’s desires were and what they need from a device”.

On one level King’s comments on choice seem remote from enterprise technology. But it is easy to lose sight of why companies are willing to spend large sums on powerful systems and analytical tools.

King says Jucy uses tools like Microsoft Power BI to understand how and why customers make choices, then remove the painful choices and help them to enjoy memorable experiences.

NZ bosses technology

This year’s New Zealand Herald Mood of the Boardroom survey shows technology dominates business leaders’ thinking.

When asked “what factors will have the most impact on business over the next five years, two-thirds of bosses nominated technological advances. Nothing else came even close.

You can interpret the question as good or bad depending on whether your business is the disruptor or the disrupted.

In comparison, online security is unequivocal. New Zealand’s bosses named it as their number one concern.

Online security has been bubbling under the surface as an issue in recent years.

In this year’s New Zealand Herald Mood of the Boardroom survey, the nation’s bosses placed it first in a list of 16 possible concerns. And by a long way.

The Mood of the Boardroom team asked ore than 100 New Zealand business leaders to rate items on this list out of ten. A score of one meant there was no concern, a score of ten ranks as extreme concern. Cybersecurity scored 7.16.

Many leaders ranked online security at either nine or ten. It came in a lot higher than the next most pressing concern; the result of the US presidential election.

If the survey was held this week, it may have ranked even higher. Most CEOs filled out their survey responses before the news of the Yahoo email breach was public

Another ugly side of technology change came up in the question about multinational tax avoidance.

While there have always been worries about transfer pricing and other was of minimising taxes, technology companies like Google, Apple and Facebook take it to new extremes. They pay next to no tax in New Zealand because they claim transactions here actually take place elsewhere.