Telcos business model unsustainable: IDC principal

Trend towards CFOs expecting a shorter return on investment says Peter Macaulay

The status quo for New Zealand telcos is unsustainable, says Peter Macaulay, IDC principal, executive practice.

In a presentation at the launch of SonicWall's new SuperMassive security appliance, he said telco survival was about securing the mobile end.

"Users expect more but to pay less. There's pressure for the telcos to invest in new technology but this won't deliver a lot more revenue than now," Macaulay says. "This will redefine leadership in the market. There will be new leaders as market niches develop.

"It's vital that the telcos manage their way through it. We have to look after them without providing the stupid protection of the past," says Macaulay.

He posed the question: where are CIOs going?

"I speak to 80 in New Zealand. It's intriguing. Less than 20 percent have no plans concerning the cloud. That means, obviously, 80 percent are planning to do something. In fact, 30 percent are already in that space.

"There is a big shift in return-on-investment requirement. Chief financial officers' expectations are dropping below 18 months. But you can't get there using traditional Capex models."

He says 70 percent of New Zealand and Australian organisations are planning to deploy or have deployed mobile business applications.

'Bring your own device' is being driven by the CEO bringing in his iPad.

"The biggest issue with applications is how to deliver business applications on mobiles to meet your needs.

Sixty eight percent of ANZ organisations have documented security but 80 percent take no action.

"Very few CIOs see security as a top priority [when they are responding to surveys]. But verbally they do. How do they convince the CEO?"

Further coverage of the event: Lawyer explains how to bypass file-sharing Act

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Tags business issuesIDCtelecommunication

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