Tech firms tap into data trends

23/10/2017 - 14:16

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SPECIAL REPORT: Rapid advances in cloud computing and data analytics are creating business opportunities.

Tech firms tap into data trends
Matt Sullivan (centre) with chief operating officer Chris McLaughlin (left) and newly recruited Cirrus WA state manager Glenn McAtee in their newly upgraded national operations centre. Photo: Attila Csaszar

When the phrase ‘internet of things’ entered the business lexicon just a few years ago, it seemed a relatively arcane concept in a rapidly developing market sector.

But a couple of numbers illustrate what this concept means in practice.

There are an estimated 8.5 billion connected devices across the world, and it is widely expected that number will jump to more than 20 billion by 2020.

These devices are deployed in virtually every industry, from sensors on conveyor belts and railway lines to rubbish bins and food warmers in commercial kitchens.

For ICT firms such as Velrada and Cirrus Networks, that creates a big opportunity.

“You think about what that means for data collection and the analytics you can pull from that,” Cirrus managing director Matthew Sullivan told Business News.

“That’s going to be a key focus for how we drive our business.”

Mr Sullivan has seen rapid changes over the past couple of years, making concepts like the internet of things, big data and analytics very real for many businesses.

“The technology to drive business wasn’t quite there two years ago,” he said.

“There are innovations that are driving those forward at a really aggressive pace.”

Velrada founder and chief executive Rob Evans said lower costs and improved technology made it increasingly easy to deploy intelligent sensors

“It’s very cheap and easy to do, you can put widgets on anything and everything,” he said.

That has been combined with the ability to gather vast quantities of data, and manipulate it and interrogate it.

Mr Evans emphasises that these trends are being driven by business imperatives, not simply the technical opportunity.

 “The engineers and managers driving those programs are much more technically savvy,” he said.

“They are a different breed of younger, more technically literate characters.”

Mr Evans is positive about the likely benefits of these trends.

“I can see this is going to have a transformational impact,” he said.

“There is a lot of hype, but there is also a lot of real opportunity.”

Mr Evans observed that operational technologies had utilised sensing for years, for instance condition monitoring of conveyors and process plants.

“They’ve often struggled to do anything with it, and there has usually been a lack of confidence in the data,” he said.

“We’re talking about something similar but applying that technology to devices that have never been monitored like this.”

Another driver was the increased use of ‘field service’ systems – home-visit nurses or maintenance technicians who use mobile devices to schedule and manage their services.

“We can then harvest the data and build a better understanding of those processes and service delivery and service metrics,” Mr Evans said.

“But without the field system in place, the rest of it isn’t possible.”

He said these examples illustrated the breaking down of barriers between operational and IT staff in many organisations, with most clients developing their analytics capacity as they deployed sensors.

“There is a shift to doing it incrementally with more agility and more immediate results,” Mr Evans said.

This was changing Velrada’s business, with less traditional consulting and more joint development in tandem with the client.

“The era of the big IT project is over, though there are still a few people perpetuating the myth,” Mr Evans said.

“Our approach is driven by the consumer experience that a lot of executives have; they get an upgrade now and they expect it will work.”

He said one of the keys was the speed of reporting, to get insights into production efficiency and intercept issues before they had systemic effects.

“The speed at which the data is made available and visualised is key to the ability to make proactive changes,” Mr Evans said.

Velrada executive director Andrew Crampton said a key factor was the responsiveness of organisations gathering more data.

“These devices just give you more information,” he said.

“If the organisation isn’t mature enough or doesn’t have the right competence or decision points, it’s a wasted effort.

“You need to combine it with the ability of the organisation to use what you learn from the field, or using analytics to give someone a prompt to take action.”

State-owned energy utility Horizon Power provides a useful example of how remote sensing technology can be deployed.

Frank Tudor wants Horizon to be the world’s leading microgrid company. Photo: Attila Csaszar

It has developed a fault call analyser, which remotely detects and helps operators investigate issues with power supply.

This is one of many initiatives flowing from a strategic review kicked off by Horizon managing director Frank Tudor in 2012.

Mr Tudor said Horizon was continuing to research and implement new technology and initiatives.

“One of our core areas of business is microgrids that work independently of the larger electricity network,” he said.

“We want to be the world’s leading microgrid company.”

The opportunity to implement technology like the fault call analyser flowed from the replacement of more than 47,000 ageing electricity meters last year with advanced meters that are read automatically.

“I believe we are leading the industry by defining the future, and investing in initiatives that will strengthen our competitive advantage,” Mr Tudor said.

Horizon was recently named one of the three most innovative electricity companies in Australia, in a review by Deloitte of 17 energy networks.

Telecommunications companies such as Vodafone are deploying networks to support these latest trends.

Vodafone announced this month it would begin trials of its commercial narrowband internet-of-things network, otherwise known as a low-power wide area network.

It is designed to wirelessly connect millions of devices that have low bandwidth requirements and, if all goes to plan, will open up opportunities that have not previously been economically sustainable.

The expected benefits include greater power efficiency, with devices able to run on batteries for 10 years or more on a single charge.

That will result in increased longevity for assets, reducing the need for site visits while devices are being used in the field.

The network will be rolled out nationally over the coming year.

Rob Evans says the speed at which data is made available and visualised is key to making proactive changes. Photo: Attila Csaszar

Risk averse

A report into the business sector’s technology investment plans released this month found that the Australian market is strongly committed to outsourcing.

ITNewcom MinterEllison technology consulting chief executive, Brendan Walsh, said this trend had been part of the broader technology landscape for two decades.

“The long-standing gradual growth of outsourcing as a proportion of IT spending looks set to continue,” he said.

“However, survey participants indicate that ‘mixed’ sourcing, that is a combination of insourced and outsourced services, remains the dominant IT sourcing strategy, particularly in the largest IT service groups being applications and infrastructure.”

As much as outsourcing is on the rise, the report found offshoring had come off the boil.

It also found clients in both the public sector and corporate Australasia were increasingly risk focused.

“They are looking for technology solutions which reduce their risk, are more cost efficient and easier to administer,” Minter Ellison lead partner Anthony Lloyd said.

Velrada’s Mr Evans said the increased use of networked devices raised serious security issues.

“These things are essentially miniaturised PCs, sitting on a network that’s connected with a bunch of other things and presents a very easy means to get into the corporate systems, which are all connected,” he said.

The report’s findings on mixed sourcing accord with the experience of Mr Sullivan and his team at Cirrus Networks.

“Some clients have completely outsourced their IT function; others want us to look after their security or data protection or back-up or storage,” Mr Sullivan said.

An example of outsourcing was equipment supplier Emeco Holdings, which has signed a three-year IT managed services contract with Cirrus.

Emeco negotiated the acquisition of two other equipment supply businesses last year and, to support that integration, will transition all of its IT services into cloud-based infrastructure.

This will utilise purpose-built cloud infrastructure Cirrus has inside NEXTDC’s and NextGen’s data centres.

Pilbara Ports Authority has a different approach; it has contracted Cirrus specifically to implement a business continuity and disaster recovery solution across all of its locations.

Deakin University in Victoria has contracted Cirrus to provide a data storage platform, which will be delivered in partnership with international vendor Pure Storage.

Mr Sullivan said the trend towards cloud computing and storage still left demand for managed services, as clients needed the correct IT architecture and implementation.

Nationally, Cirrus achieved revenue of $54 million in the year to June 2017, though by the end of the financial year its revenue was running at an annualised rate of $75 million.

To support its expected growth, the group recently recruited former Data#3 state manager Glenn McAtee to join Cirrus in the same capacity.

With its national staff numbers growing to about 100, Cirrus has also appointed its own recruiter to help fill available positions.

Flexibility

Perth-based Zetta Group has developed what it believes is an Australian first in the disaster recovery space.

Through its Zettagrid business, the group has been offering cloud infrastructure services since 2010.

Its specialist services have attracted support from small and mid-sized IT firms, with about 60 per cent of revenue in the Zettagrid business unit coming from smaller managed services providers.

By offering disaster recovery as a service, paid with a monthly fee, it allows clients to shrink and grow their usage as needed.

Late last year it launched its SecondSite service, which enables clients to replicate their in-house virtual IT environments into Zettagrid’s cloud service.

It has gone a step further this year with launch of its Interzone disaster recovery solution.

This allows clients whose IT environment is already in Zettagrid’s cloud to replicate it into other geographic zones; for example, replicate from Perth to Melbourne, or Sydney to Melbourne.

This is made possible by Zetta’s use of virtual servers inside NEXTDC and Equinex data centres.

If business operations are affected by ransomware, an administrative error or an environmental disaster, IT services can be up and running within minutes in a different geographic location until the primary site is  recovered.

Zetta chief executive Nathan Harman said his strategy was to carefully select services where his group could gain a competitive advantage.

“The spectrum is so big, as a service provider you can’t possibly hope to cover it end to end,” he said.

“We’ve chosen to pick some slices and be good at those, and stay interested in the other parts but not kid ourselves that we will be able to do that as well.”

For instance, Zetta does not claim to have expertise in the field of big data.

The privately owned business has grown to have 142 staff in Perth, with 15 positions to be filled, and Mr Harman said that scale gave the firm a good perspective.

 “The bigger you get, and the more you delve into each service area, the more you realise you don’t have the capacity to do everything end to end,” he said.

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