Industry development has been a tainted idea in New Zealand since the days of Rob Muldoon and Think Big. After our near economic meltdown in 1984, it became accepted on both sides of politics that government should not intervene in the market or attempt to “pick winners”.
But, as memories of Muldoon’s big gambles fade, and as alternative strategies also fail to lift New Zealand’s economic performance, a more measured kind of industry development has been moving quietly back into favour.
A trio of tenders, from the so-called tri-lateral agencies, this month has thrown these efforts into sharp relief. The agencies (comprising New Zealand Trade and Enterprise, The Foundation for Research Science and Technology, and the Tertiary Education Commission) have gone to tender for research reports on three development opportunities. These aim to deliver lasting benefit to New Zealand and to create high-value jobs, among other benefits.
The identified opportunities include platform development in high temperature superconductors, titanium powder metallurgy, and “JAIN SLEE” software. These are all areas in which New Zealand has significant expertise and which are expected to grow into major industries internationally.
Paul Frater, director of enterprise and innovation at New Zealand Trade and Enterprise, says NZTE has been looking at various emerging technologies and opportunities.
“We’ve been scouting around and looking for projects that we think meet our criteria,” he says. These criteria are: that the project helps create a platform for development and growth; that it has international potential; that it delivers high-value employment opportunities, and that it is profitable for business.
To find these opportunities, NZTE networks with universities, crown research institutes, sector groups and others interested in local and regional development. He says opportunities appear on the horizon, then go through triage, and then, if considered worthwhile, progress further.
“Especially in ICT, we are looking for something that will take a number of New Zealand firms into international areas,” he says.
He says the background strategy is to shift New Zealand ICT efforts from custom design and build activity to “design once; sell many times” — in essence, a software publishing model — to boost productivity.
The JAIN SLEE opportunity relies on one local industry leader producing products that are robust, reliable and are widely adopted, so other firms can capitalise on the consequent software development opportunities. That company is Wellington-based OpenCloud and its major product is Rhino.
Frater says OpenCloud’s Rhino is essentially middleware. The opportunity for local developers lies in building software that uses its robust integration to deliver applications to telecommunications and other industries.
According to OpenCloud, Rhino is a “high-performance and fault-tolerant event-driven application server product suite for converged network services.” Put more simply, it allows telecommunications companies to deliver new kinds of converged services though improved integration. Services such as better integration with Outlook or real-time gaming on mobile phones can be supported.
As to the opportunity, OpenCloud is certainly making an impression and is being rolled out by carriers.
A 2006 research paper from Gartner says: “Event-driven application servers are among the most innovative evolutions in application platforms. Although still leading-edge technology, several commercial products, such as those from jNETx, OpenCloud and WareLite, are emerging in the market
“JAIN SLEE is positioned to help establish openness, agility and lower costs in the telecommunications traffic-management software systems,” the paper says. “But, conceptually, JAIN SLEE is not limited in its design to any one industry. Various JAIN SLEE implementations exist, with others under development, but adoption of compliant products is limited to mostly experimental and proof-of-concept applications.”
OpenCloud is right at the forefront of this development. Formed in 2000, it led the development of JAIN SLEE specifications, along with Sun Microsystems. Gartner describes its contribution to the development as “visionary”, but notes, as a challenge, that the development of productivity tools for the platform remains in its infancy.
OpenCloud’s vice president of engineering, David Long, says the opportunity is “very large” and not just in the telecommunications industry. He sees broader opportunities: in manufacturing; process control and financial services; RFID, and in managing sensor networks. In short, “anything that needs to manage events”.
“Gartner sees a huge growth in the number of events being tracked on telco networks,” he explains. “Telcos have to start innovating in this area to deliver higher value services, but it has been difficult for them to innovate quickly, and at the right cost.”
In effect, JAIN SLEE reduces the cost of such innovation and shifts the telcos’ return on investment calculations for such projects.
As the vanguard company in its space, OpenCloud has developed international relationships that JAIN SLEE application development companies can use to get to market.
“We have good channels for innovation that can occur in New Zealand,” Long says.
Embedding the benefits
And that’s where the “tri-lateral agencies” and their tender come in. NZTE’s Frater says the research will evaluate the opportunity further, with a view to building public-private partnerships to take advantage of the opportunity.
“It has to have the private sector taking the initiative,” he says.
But to a significant degree, government involvement is predicated on the ability to embed the benefits of support in New Zealand, he says.
“Investment would be on behalf of New Zealand, so how do you ensure New Zealand captures the benefit? It’s unlikely all of the activity will be New Zealand-based, but we can retain engineering, critical services, research and development.”
For instance, Frater says that an offshore venture capitalist that invested in OpenCloud was surprised at the value and quality of other business services in New Zealand — in marketing and other areas.
Wellington-based MediaLab is another supporter of local JAIN SLEE efforts. It provides a secretariat for the JAIN SLEE industry forum on behalf of NZTE. The company’s website shows that an ecosystem is already well on the way to forming around OpenCloud’s work. It lists companies such as World45, Zodal and Solnet as working on applications or other developments for the platform. In addition, Otago University will launch its postgraduate diploma in next generation telecommunications this year.
MediaLab’s CTO, Peter Chappell, says network operators are moving into new kinds of markets, with 3G, next generation networks, unbundled bitstream products and voice-grade broadband. Multi-service IP networks will require and enable multiple small applications.
The JAIN SLEE opportunity, he says, can be divided into three areas: consumer applications, business and services for sensor-based networks. Multiplayer games for mobile phones have already been demonstrated by Zodal, he says, and the idea can be extended to social networking, to allow a mobile phone, for instance, to be a gateway to services such as Facebook.
In business, the emergence of VoIP and unified communications is attractive, while universities are exploring the potential of open standards-based sensor engines for sensor networks.
Gartner forecasts JAIN SLEE will achieve mainstream adoption within five years. It is a multi-billion dollar opportunity and New Zealand will have to move fast and be smart to take advantage of its lead. The tri-lateral agencies will select their partner for commercial assessment of the opportunity in early February. A draft report is then expected to be completed by the end of March.