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Channel leaps into the data centre as NZ organisations become more “digitally aware”

Channel leaps into the data centre as NZ organisations become more “digitally aware”

Adam Dodds, Research Manager for IT Services, IDC New Zealand provides a comprehensive overview of the software-defined market across the country, at Westcon’s LEAP into the Data Centre event in Auckland.

“If you think about that philosophy of knowing where your information is and being able to protect that information, in a new digital landscape information is absolutely the new gold.

“So much so that boards are now trying to understand how they value information. So why do they value information? Because it means they can establish the right ratio around how much they spend to protect that information.”

Dodds speculates that in operating as a New Zealand business, who values information as a top business priority, “would you put your information right out in the middle of nowhere knowing that if something happened, you wouldn’t know how to get it back?”

In alluding to this line of thinking, Dodds believes this is now the mindset that Kiwi businesses are beginning to form.

“I’m not saying that local data centre providers are safe but I’m saying for at least the next two technology refresh cycle there is opportunity to be had in that market place,” he advises.

“But what’s the deal? I go and buy infrastructure from any of the vendors on show today, how can I be assured that I’m going to establish a form of return on it? Right now, you’ve got circa six years of investment.”

Data Centre landscape

At a global level, brokerage is gaining traction, which is the ability to dynamically choose and purchase compute relative to the capacity that a business requires over time.

“Basically it’s trading data,” adds Dodds, “and that is now underway.”

The knock-on effect is that companies overseas are working on new models to evaluate the value of compute over time so people can trade data.

“What this means for service providers is that firstly, you need to become more automated because that allows you to reflect that new model that is starting to emerge and secondly you need to be more elastic in the way you provide pricing to your customers,” Dodds explains.

“And that means you need to be more flexible and avoid locking customers in for long periods of time.

“The reality is, there are still organisations within New Zealand, large ones at that, that are having big agreements with their customers and the biggest risk to that is people who are more likely to go knee-jerk and move into the public cloud as a result of this lock-in style environment.”

Across the ICT market in New Zealand, Dodds claims that the “biggest money still lies in application and infrastructure.”

As a result, from a software perspective the market is still going to have compound annual growth of around nine to ten percent for at least the next five years, leading Dodds to cite the value in such a software style business.

“When you think about software-defined around the data centre or software-defined around networking, there are strong opportunities for the channel to take advantage,” he adds, citing security as another key revenue earner.

“But let’s be really clear, the aspects of security from a monetisation point of view are very broad. We’re seeing that 70 percent of the market around security do it themselves so when you think about that from simple a resale point of view, there are great opportunities within that space.”

From a market point of view, Dodds reports that New Zealand as a country, compared to Australia, has a higher proportion of ‘do it yourself.’

“While this isn’t a surprise,” he adds, “the reason this becomes important is because that is still the way people want to transact.

‘I’m seeing so many service providers going after these standardised and repeatable products which is fine from an economics point of view but they are forgetting the way in which a customer actually wants to operate themselves.”

Crucially however, when searching for the piece that underlies all of this, the importance of the network comes to mind.

“The realities are right now that you can’t have any of this stuff without a great network and what we’ve found, and this is an interesting consideration for the market, is that those that invest in an ongoing way around network optimisation are more likely to get one cost, two time and three expectations being met with regards to their projects,” Dodds advises.

“So if you’re looking to add value, think about having a conversation around what businesses are doing to modernise their network to accommodate this new infrastructure.”

From an infrastructure perspective looking at cloud, 65 percent of the market are still looking at some form of converged or private cloud infrastructure.


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