IDC Outlook 2014: Top trends for New Zealand CIOs

Analyst firm lists the issues and developments that are expected to have the most significant impact on the local ICT market in the next 12 months.

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Prediction 6: Collaboration will drive the era of social business

IDC predicts that external collaboration programs will be amongst the top priorities for New Zealand organisations this year. The programs will cover a wide group of initiatives from video and unified communications platform and the development of social network tools either on-premise or cloud based.

Prediction 7: SDN investment will gain pace in this year, but deployments will be cautious as carriers prioritise other areas

Software-defined networking (SDN) separates the control layer from the underlying hardware by creating a virtual overlay that allows the network to become software programmable. The concept has been hailed as the catalyst to flexible, scalable, and intelligent networks and as the answer to the current and future issues of both the carrier and the enterprise.

IDC predicts a number of carriers will invest in SDN, initially concentrating on the data centre before extending into the WAN. Carriers face difficult investment decisions as other initiatives (4G, fibre, IPTV) may take priority in the short term. Only those operators that strive to be innovation leaders will invest in SDN, and IDC believes even those will do so on an incremental basis.

Prediction 8: Cloud brokerage will provide order to the 'Wild Wes't

The recent IDC Asia/Pacific Cloud Services study identified the cloud brokerage opportunity to be worth an estimated US$18.5 billion. While the market may not achieve this lofty height, the value of the market is compelling enough to command market attention.

“Given the lack of scale in New Zealand, the opportunity favours the first movers and the brave from an SP opportunity perspective. New Zealand has, within its ranks, a number of cloud brokerage platforms that will emerge with the global providers in the market,” says ISC. These parties include Westcon (IT distribution) and 9 Spokes. If they enable the channel to sell well, then they have as much right to the market as any of the globally established providers, says IDC.

Prediction 9: Uncertainty shrouding copper and fibre wholesale pricing will be removed through a new partnership between Chorus and the government. Telcos will move to quality of service rather than price competition

A commercial compromise will be reached, whereby Chorus provides a commercial copper broadband range between NZ$37 and NZ$40/month — higher than the regulated price for UBA (NZ$34.44) but lower than the current price (NZ$44.98) and of a higher specification than the regulated service.

IDC further predicts that price competition will continue to be intensive at a retail level. This competition, however, will change and evolve from a primary focus on pricing to include network and value-added components as quality of service becomes more important. Fibre provides a natural reconsideration point for New Zealand end users, and there is a growing push for naked connections.

Prediction 10: Large projects will fall out of favour - lean and mean is in

The past year saw a number of high-profile projects – exemplified by Novopay – that failed to deliver on expectations. Thus, IDC predicts this year large projects will fall out of favour in the market and “become scarce”.

“With the emergence of agile and lean methodology, coupled with the shortened expectation around positive ROI, we will see a more rigorous approach to the thresholds against which the project authorisation will be measured,” IDC states.

It also believes projects aligned with the elements of the third platform will take priority over legacy ‘second platform’ projects. “Only those projects that can demonstrate a high level of standardisation and simplification will manage to survive the governance requirements.”