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computing

Mandatory data breach reporting in Australia 

Mandatory data breach reporting has been on the agenda in New Zealand for some time. While they may have some ground to make up on the rugby field, it is one area where our trans-Tasman cousins have stolen a march on New Zealand.

Source: Mandatory data breach reporting in Australia | ITP Techblog

New Zealand is falling behind best practice when it comes to data breach reporting. Where other countries have laws, we have guidelines. There are no formal penalties for failing to report a breach although failure to report may be held against an organisation if there are legal consequences.

Privacy is important and is being eroded all the time. Let’s put a stop to that. It’s time to step up efforts to put a mandatory system in place with fines for non-compliance.

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computing

IBM remote work recall a red herring

IBM Gini RomettyEarlier this year IBM told remote employees they must return to the office or leave the company.

It’s a turnaround. IBM pioneered allowing employees to work from home. At times as many as more than a third of the firm’s staff worked at places away from company offices.

The company often lectures others on the merits of remote work. Company marketing describes telework as the future. Moreover, IBM sells products enabling its customers to offer remote work to their employees.

IBM’s remote work policy was popular with staff. Many talented people either opted to join the company or decided to stay put because they could work from home. It’s powerful for working women with families and just as good for dads who like to see their children more often.

Productivity or IBM’s staff costs?

The official reason for the change is that working together in one place helps productivity, teamwork and morale.

There’s something in this. Collaboration is easier when co-workers sit across the aisle. Video conference calls are productive, but so are well organised face-to-face sessions. Chance meetings at the coffee station can spark fresh thinking.

Yet, you can’t help wonder if IBM’s move is about cutting staff numbers. Many remote workers may decide it is too hard to move home in order to keep their job. Some of the office demands mean people have to move long distances to keep their jobs.

There’s research, some sponsored by IBM, showing teleworkers are more productive than office-bound workers. Which argument are we supposed to believe? Can we trust anything the company says on the subject?

Ominous

Yahoo made a similar back-to-the-office move. It was unpopular. Many talented staff members quit. We all know how well that story ended.

There’s a practical problem for IBM workers in places like New Zealand. Some specialist roles are shared with Australia. There are ANZ managers are in New Zealand, others across the Tasman. They shuttle between locations and make a lot of conference calls. What happens to them under the new rules? The fear is they will be under pressure to move closer to the regional HQ in Sydney. That will not go down well with New Zealand customers.

Remote working became popular with large companies about a decade ago as suburban broadband improved. Video conferencing went from being difficult to practical.

Senior managers across the technology and other industries loved the idea of remote work as they thought it would save costs. In theory, offices needed less real estate and fewer support services when workers were elsewhere.

Things didn’t work out that way. Few savings materialised.The other part of this equation is that management went through a stage of being output-focused. That is, they were more concerned with what employees produced than in keeping close tabs on them all day long. If someone produced a report in their pyjamas or by sitting next to the pool that wasn’t a problem so long as the work was good. It seems the pendulum has swung back to command and control.

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computing

Xero joins Silicon Valley elite as TCV invests

Xero has moved one step closer to becoming New Zealand’s first global technology giant.

Last week TCV, a Silicon Valley investment firm, bought 1.4 million Xero shares from Matrix Capital Management. The deal was worth NZ$28.5 million. That’s a little over one percent of the company.

Few people in New Zealand will have heard of TCV. Most New Zealanders will have heard of the company’s other investments. TCV owns equity in, among others, Airbnb, Facebook and Netflix.

Xero a name in Silicon Valley

Technology Crossover Ventures is based in Palo Alto, California, the epicentre of Silicon Valley.

Matrix reduced its holding in Xero from almost 10 percent of the company to around 8.5 percent.

The share transfer may not be a big deal in Silicon Vally terms or even in TCV terms. The business has close to US$10 billion invested in technology companies. The investment is from a TCV fund that focuses on mature firms that already have an impressive track record.

Yet it is significant for Xero, although not in financial terms. It’s an important vote of confidence marking Xero’s arrival in the technology premier league. That’s something no New Zealand company has managed before now.

Disruptor

The cloud accounting software company has disrupted global markets. Xero made the world sit up and look at New Zealand technology.

While Xero’s share price has fallen back from the mid-2014 high point, it has performed well so far in 2017. The price is up almost 15 percent since Christmas. In mid-December it traded at NZ$17.50, today, at the time of writing, it is NZ20.50. That’s the highest point for the company’s shares since November 2015.

Like many fast growing technology companies the business has yet to turn a profit. Although that day is now getting closer. At a recent company update founder Rod Drury said the business will soon be cashflow positive.

It continues to show strong growth in revenue. What’s more subscriber numbers continue to climb. This is a vital metric for a software-as-a-service business. At the end of March it hit the milestone of one million subscribers.

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computing

Don Christie says global IT giants all take, no give with New Zealand

Don Christie writes in the New Zealand Herald Global IT companies are taking profit here and putting nothing back:

An organisation I co-chair, NZRise, has been looking at the problem. We represent New Zealand owned digital companies who generate jobs and good incomes for tens of thousands of Kiwis. Our research shows Facebook, Google, Amazon and many other global digital companies are engaged in similar tax avoidance schemes to Apple.

Most revenues that accrue to those companies from New Zealand simply don’t get reported. They are the result of an online transaction and the money flies out of the country in the blink of an eye. No tax. No multiplier effect. No 41 per cent investment into our society.

From a business owner’s perspective it also represents a huge disincentive to invest in R&D, which is already at shockingly low levels by international standards. We find ourselves at a disadvantage to our multinational competitors.

Why create software and technical services in New Zealand when we will always be facing uneven tax playing field?

New Zealand has had a problem with multinational companies and transfer pricing for decades.

Yet the problem Christie writes about is on a different scale.

While the old multinational would shuffle money to minimise liabilities in New Zealand, they still paid some tax. They employed people, trained people and contributed to the economy in other ways. They funded university chairs, sports clubs and other worthy causes. If the new breed does any of that, it’s invisible.

Little contribution

The new multinationals pay next to no tax. They employ next to no New Zealanders. They contribute little to the economy.

Sure, you can argue that Apple products make New Zealanders more productive and that’s a positive economic contribution. The net positive economic contribution may even be greater than Apple fails to contribute in more direct ways.

That is an argument against banning or boycotting Apple products. No-one is suggesting that.

It is not an argument against taxing Apple.

After all, our roads carry Apple products to market. Our schools give people the skills people need to use Apple products. Our health system keeps Apple’s customers alive and healthy. In some cases our tax dollars buy Apple products.

Google this!

You could argue something similar about Google. Some believe Google software makes workers more productive than they would be with other software. Maybe.

Some think that Google’s activities in the advertising sector has an economic benefit. Try saying that to a New Zealand journalist or someone who works in the media.

Again, these are not arguments against taxing Google.

Google is quite happy to sell its products and services to New Zealand government departments that it doesn’t help fund.

It’s harder to argue Facebook offers any economic benefits to New Zealand. If anything it undermines productivity. It is the digital equivalent of an all-sugar diet.

Christie has a good point

There’s little change Apple, Facebook and Google will stop selling in New Zealand if we force them to pull their economic weight.

Until recently the problem was limited. Most of the non-contributors were technology companies. That’s changing with services like Uber muscling in on our markets. If things continue our economy will be hollowed out. Let’s not allow that to happen.

It’s been said that what the companies do is legal. That’s true. It doesn’t make it right. We have the power to change that. We have left this problem in the too hard basket for too long.

Categories
computing

Here’s the thing about Apple Pay and banks

Apple insists banks don’t pass on Apple Pay charges to customers. Banks accept this in most countries. But not in Australia and, by extension, New Zealand.1

Wrangling over the issue slowed Apple Pay’s progress in both countries.

Three of Australia’s four big banks asked that country’s regulator for permission to negotiate with Apple as a group.2

The fourth bank, ANZ, has its own agreement with Apple.

On Monday Westpac, Commonwealth Bank and National Australia Bank took fees off the table. In return they want Apple to open up the NFC chip in iPhone. That will allow them to run their digital wallets in direct competition to Apple Pay.

The dispute is almost academic. Digital wallet take-up rates are miniscule. For now digital wallets are a rounding error in transaction statistics. Yet everyone involved thinks they will soon be huge.

The Australian reports ANZ completed 10 million Apple Pay transactions since launching nine months ago. This compares to seven billion credit and debit card transactions in a year.

Banks and phone makers expect digital wallets to take off when they add other features. Driver’s licences, loyalty cards and membership schemes are at the front of the list. So are public transport cards.

Replacing wallets with Apple Pay

Both Apple and the Australian banks hope people will one day no longer carry conventional wallets. Both want the game to play out their way.

The key to understanding the dispute is that both sides are big, powerful semi-monopolies. Both want control and both want to clip the ticket on every transaction. It can mean rivers of gold.

The Australian banks argue that opening up the iPhone NFC chip will allow innovation to flourish. Apple argues customers will get a better digital wallet experience if it retains control. Among other things it means customers can run cards issued by different banks from a single app.

Banks elsewhere might be as uneasy with Apple Pay, but few banking markets are as tight-held as Australia and New Zealand. This gives the local big banks a clout that, say, US banks don’t have.

Customers want them all to get on with it. A handful of geeks have swapped to ANZ to use Apple Pay. If that trickle was a flood, the other banks would soon change their tune.


  1. That’s because Australia’s dominant big four banks are also New Zealand’s largest banks. ↩︎
  2. Good question. I’m glad you asked. In normal times it is illegal for competitors to collude with each other. Regulators fear this can lead to bad things for customers. ↩︎