Consolidation, convergence, change: the road ahead

Data consumption trends forcing network convergence

What effect, if any, will the unstable global financial markets have on technology and business in the next few years? Where to now?

The scaremonger commentators would have us believe it is all doom and gloom, but technology and telecommunications are the biggest drivers of business in the Western and, arguably, the entire world.

While investment in the technology and telecommunications sectors is coupled with the economic climate, according to a recent survey, most CIOs have a positive outlook.

With Australian companies competing globally, they are demanding efficiencies, innovation and speed like never before.

Ethernet is replacing legacy technologies such as frame relay and ATM at a lightning rate and becoming a mainstream business tool. It is much cheaper and easier for customers, and is catching up in terms of robustness. Companies are adopting Ethernet when they invest in voice over IP or to consolidate multiple ISDN links into one large Ethernet trunk. The big end of town tends to favour Ethernet over fibre, but Ethernet can also be delivered over ADSL for smaller customers.

We're also seeing an upswing in demand for data centre capacity. With new legislation governing the period companies are legally required to save e-mails, many are facing the challenge of how to archive them. Generally, documents have to be retained for up to 10 years, but in the health industry records have to be available indefinitely.

Many companies are investing in offsite storage or keeping servers in a data centre for disaster recovery. These customers require high-capacity links between the central office and the data centre. With servers and storage updating each other from dawn til dusk, such connections are being utilized constantly.

This increased investment in data centres has led to a significant shift towards the use of blade servers and virtualization for high-density computing. The hardware footprint may be shrinking, but the power density is pushing energy bills through the roof.

VoIP uptake is showing no signs of slowing as we've seen a steady decline in fixed line growth and a surge in broadband. In the last few years a wave of serious ISPs hit town and we've seen the first naked DSL offers in the market.

The emergence of mobile data as an essential business tool has confirmed the trend towards a global 24/7 work environment. It has also led to the development of dozens of applications changing forever the concept of convergence and mobility.

These trends, coupled with smaller player consolidation, tightening margins and larger players fighting for market share (at all costs) is driving the need for more flexibility among providers and greater tailoring of products and services to individual business needs.

Business customers will demand high service levels, personalized management of their technology and telecommunications infrastructures and services and the ability to adapt quickly and efficiently as new products and services come online.

Australia's telecommunications market will continue to consolidate in 2008, creating a dynamic, energized environment which will inevitably result in greater choice for customers.

Provided the regulatory framework governing our future investments enables the elusive "level playing field" environment within which all players compete on equal-footing, changes over the next 12 months will, without a doubt, shape the foundation of our economic roadmap and continue propelling the nation forward in the global marketplace.

The question is, will we get it right?

Paul Broad was appointed chief executive officer of AAPT in May 2007, after Telecom New Zealand acquired 100 percent of PowerTel in a major shake-up of the industry. Broad had been managing director of PowerTel from November 2004, following 15 years of service as managing director of some of Australia's largest energy and water companies.

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