20 April 2005

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(No Transcript)
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The National ICT IndustryAn AIIA Perspective
20 April 2005
James McAdam General Manager Strategy Policy
Services AIIA
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Overview

• About AIIA
• General Issues Trends
• Key Policy Issues
• Procurement
• Local industry
• Offshoring
• iAwards

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About AIIA

• Leading ICT industry organisation
• More than 450 member companies
• Revenues of over 50B p.a.
• Employ 100,000 Australians
• Exports of 2 billion
• Members from all sectors of the industry
• Hardware, software, services
• Multinational and local Australian companies

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What AIIA does
AIIA assists the ICT industry to meet its
business objectives, locally and globally in
corporate and government markets. Together, we
set the strategic direction of our industry. We
influence public policy, engage industry
stakeholders and provide our members with
business productivity tools, advisory services
and market intelligence to accelerate their
business growth.
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Industry Outlook Key Trends

• Solid growth
• Asia continues to emerge
• CIOs seek greater business contribution
• Wireless
• Data collection
• Health

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Enterprise Spend on ICT is Growing

• US billions 2003 2004 2005 04/05
• Total Asia/Pac 174.7 193.9 208.7 7.6
• By segment
• Hardware 31.7 34.8 36.9 6.3
• Software 4.6 5.0 5.6 12.4
• Telecom 110.9 123.2 132.5 7.5
• IT Services 27.6 31.0 33.6 8.4
• Notes (1) Enterprise numbers are external spend
  and exclude internal spend on salaries etc.
• (2) Some currencies have changed versus US,
  impacting growth rates in US
• Source Gartner

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Australian Enterprise Spend-Solid Growth

• AUD billions 2003 2004 2005 04/05
• Total 37.5 39.0 40.6 4.0
• By segment
• Hardware 8.1 7.6 7.2 (5.2)
• Software 1.6 1.6 1.8 12.1
• Telecom 12.9 13.6 13.9 2.2
• IT Services 15.0 16.2 17.7 9.4
• Note (1) Numbers may not add due to rounding
• (2) Total spend in 2004 is US 27.881 billion
• Source Gartner

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Emerging Asian Tech Companies

• You are familiar with NEC, Fujitsu, Hitachi,
  Toshiba, Canon, Sony, Pioneer, Ricoh, Casio,
  Sharp, Matsushita (Panasonic, National,
  Technics), Kyocera, Seiko, (Epson), Oki, Brother,
  Sanyo, Konica, Minolta, Olympus, TDK, TEAC,
  Yamaha and other Japanese tech/electronic
  providers
• You have also likely encountered Samsung, Acer
  and perhaps LG
• More recently companies such as Infosys, TCS,
  Wipro and Satyam have emerged - but Patni, HCL,
  3i, NIIT, Mastek, Sasken, Pentasoft, Birlasoft,
  Mascot?
• Have you heard of Compal, Asustek, BenQ, Hon Hai,
  Quanta, Lite-On, Nanya, Sampo, Winbond,
  Elitegroup, Microstar, TSMC, Mitac, Arima,
  Wistron, Accton, Umax and Synnex?
• And what about Huawei, Lenovo, Haier, Neusoft,
  Datang, ZTE, TCL, Ningbo Bird, Konka, BYD,
  Galanz, Founder, Changhong, Putian, Hisense,
  Kingsoft, UFsoft, Kingdee and Stone Group?
• I am sure you have yet to hear about NCsoft,
  Webzen, Nexon, Netmarble, ICM, Hanbitsoft,
  Shanda
• And Ramco, Trend Micro, NTT Data, I-flex,
  Mphasis, Polaris?
• Source Gartner

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CIOs are leading a transformation from enablement
to contribution

• CIOs indicate the following areas of focus for
  2005
• Providing secure, high-quality IT services in
  line with business cost expectations
• Increasing the quality and use of intelligence in
  processes, products and services.
• Improving, integrating and innovating business
  processes
• Source Gartner

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Key trends - Wireless

• Pervasive Wireless coverage
• Any device, Laptop, Tablet, PDA. Always on,
  always synched, device to device synch for your
  info.
• Any network Wimax, WiFi, eVDO, 3G etc, similar to
  mobile phone, seamless handover, billing, roaming
  etc between carriers.
• Any city, metro first, then regional, then rural.
  
• WiFi on 90 of laptops in 2006, WiMax by 06/07,
  Longer battery life, Dual processor.
• Cost/Performance to be more affordable.
• Source Intel

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Key Trends - Data

• Data collection
• Driven by RFID uptake, initially in supply chain
  mgt, then in inventory mgt compliance/legal,
  (SOX, BASLE) regulations
• Examples are Retail, Health, SMS (Idol), Defence
  etc
• Store, analyse, slice, dice, manage, distribute.
  Opportunity will be for apps which can do this
  provide service to client
• Think Mega-Tera bits of data being moved,
  collected, managed etc.
• Source Intel

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Key Trends - Health

• Health
• 7 of GDP spent on healthcare delivery, moving to
  14 by 2010 (Intergenerational report)
• IT needs to be deliver cost efficiencies in
  healthcare delivery.
• Key areas Patient record mgt, smart diagnostics,
  homecare,  bedside tools, education of health
  professionals, digital hospital etc.
• Broadband pipe needed to deliver home regional
  outcomes
• Opportunity for s/w apps, training development,
  integration etc
• National e-Health Transition Authority
• Source Intel

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Key Policy Issues

• Procurement
• Contract changes
• Liability
• Intellectual Property
• Local Industry
• Building capacity
• Business skills
• Offshoring
• AIIA report - findings

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Procurement

• Changes to standard form contracts
• Federal (GITC 4.1)
• NSW (Procure IT)
• Queensland (GITC5)
• Limitation on liability
• Feds capped in all but the riskiest of
  contracts
• Talking with NSW and Vic on issue
• Intellectual Property
• Feds default position to commercialise
• Again, talking with other states

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Local Industry

• Local Industry Action Group
• SEA funds
• Strategy
• identify the key industry development issues
  confronting the local software industry
• address areas identified as critical or highly
  beneficial to the Australian software industry
• facilitate the growth of companies to enable them
  to compete internationally
• provide a software quality accreditation
  component to AIIAs current training, mentoring
  and networking program
• Modular approach
• Practical solutions (guides, toolkits etc)

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Local Industry cont

• Entrepreneur Business Skills
• 260K AusIndustry grant (Small Business Enterprise
  Culture Program)
• Equip participants with knowledge and business
  skills
• Develop an Aust-wide network
• 30 participants, 12 intensive days of workshops
  delivered by MGSM
• Monthly sessions with mentors
• Participants will complete 3-5 year Business
  Action Plans

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Global Sourcing

• AIIA report - The Status of Offshore Outsourcing
  in Australia
• Threats and opportunities
• Key findings
• CIOs pragmatic
• 1 in 6 have or are considering offshore
• While cost is important key factor was quality
• Plenty of opportunities not many opportunists

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Global Sourcing cont

• Opportunities
• 25 cheaper to run a commercial undertaking in
  Australia
• Aust viewed as low risk
• Value IP, security and privacy
• Politically, legally, culturally similar to US
  and western Europe
• World class skills and experience
• Partnering

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Global Sourcing cont

• Recommendations
• Industry Development
• Build Technology Australia and vigorously promote
  Aust as a destination for offshoring
• Encourage SMEs to position their business to take
  advantage
• Employment Adjustment
• Help displaced workers through training
• Help companies capture and leverage IP
• Offer guidance on best practice for forming
  strategic partnerships

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AIIA iAwards

• Finalists announced last week
• 18 categories
• From agriculture and primary industries through
  to tourism and hospitality
• 2 NT organisations are finalists
• Northern Territory Fire and Rescue Service
  (NTFRS)
• Inchain Northern Territory Department of Health
  Community Services

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AIIA iAwards cont

• Winners announced at gala dinner at CeBIT, May 25
• Winners go on to represent Australia in the Asia
  Pacific ICT Awards (APICTA) in Bali
• Great opportunity to raise profile both within
  Australia and internationally

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Useful Resources

• AIIA staff both local and national
• Various Commonwealth and Territory Government
  websites
• AIIA portal www.aiia.com.au

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Questions ??
Further information www.aiia.com.au Tel 6281
9444 James McAdam j.mcadam_at_aiia.com.au