|Issue:||Asia-Pacific II 2009|
|Topic:||The economy and ICT innovation|
|Organisation:||AT&T Asia Pacific|
Bernard Yee, Vice President of AT&T Asia Pacific, is responsible for managing the direct sales and channel sales teams across 13 markets in the region, including Japan. Mr Yee has held the various management positions within AT&T including Regional Managing Director of Consumer Markets Division of AT&T Asia Pacific and head of Marketing and Product Management. Mr Yee joined the Internet and Online Services Division of AT&T Asia Pacific and was soon promoted to head the company’s merger and acquisition activities in Asia Pacific. Mr Yee holds a Bachelor of Commerce degree from the University of Auckland and is a Chartered Accountant of the Institute of Chartered Accountants of New Zealand.
Companies are retrenching to face the economic slowdown. They are favouring solutions that substitute capital expenditures for operational expenditures. Services such as utility computing and managed IT services, which scale up – or down – instantly to meet changing demand and are paid for according to usage are growing in popularity. The use of communications technologies that enhance productivity and accelerate business processes, such as unified communications and videoconferencing – which can reduce travel – are growing as well.
It is no secret that in these challenging economic conditions, companies are retrenching their operations and looking to do more with the resources already at their disposal, so IT budgets are constantly scrutinized. Companies are looking at ways of moving capital expenditure to operating expenses to meet the same business goals. Chief information officers (CIO) of multinational companies (MNCs) face even tougher challenges in these times. They need cost-effective IT solutions to deploy seamlessly across multiple locations in a consistent manner. As MNCs look to meet these challenges, CIOs are re-evaluating the way they manage their current resources. The outcome is likely to be a shift in their procurement strategy favouring flexible, capital-light approaches, such as utility computing and managed IT services. At the same time, with a greater emphasis placed on doing business more efficiently, there is likely to be a renewed focus on communications technologies with the potential to enhance productivity and accelerate business processes, such as unified communications and videoconferencing. Utility computing Among these technology solutions, perhaps the most compelling is utility computing. It is part of a broader trend that of remotely distributing computing resources to individuals and organizations. In simple terms, the idea behind utility computing is to provide enterprises with access to IT resources, on demand, over the network. Enterprises pay for only what they need. Utility computing can take many forms. Telecom companies offer enterprise-class value added and managed services through Internet data centres, allowing MNCs to flexibly scale up and down their computing, storage or web hosting capacities as the need arises. These services also include managed networking, managed communications environment, security management and application acceleration. Most enterprises have seasonal business cycles, but their need for computing resources can fluctuate for a variety of reasons and is often unpredictable. By providing metered, on-demand IT resources, utility computing allows companies to save costs, avoid having to make large capital outlays on IT infrastructure and squeeze a better return on investment from their existing infrastructure. These on-demand services could prove useful, for example, to online retailers gearing up for holiday sales, employers with annual open enrolment for employee benefits or game publishers running online games. Virtualization as a catalyst Utility computing is certainly not a new concept, but innovation and the proliferation of storage and server virtualization is making this service increasingly viable for MNCs. For most MNCs with globally distributed operations, building and managing multiple data centres is probably the single-most complex, resource draining and expensive component of the IT environment. Virtualization has become the key to making the most efficient use of those assets. Virtualization enables higher utilization of existing computing and storage resources. It allows MNCs to gain seamless access to alternative resources, such as utility computing services, over the network. The result is an IT environment with higher availability and scalability. Unified communications bring it together As the current economic environment has driven many enterprises to tighten travel budgets, technologies that help MNCs make better use of their human resources by facilitating remote collaboration and enhancing worker productivity have also gained prominence. Unified communications is one area that seems particularly compelling, given its potential for creating a seamless collaboration platform. Unified communications aims to integrate all forms of communications and the migration of all communications to data-centric networks has facilitated this goal. As the adoption of Internet-based telephony and videoconferencing has grown along with web-based collaborations tools, an opportunity has emerged for the development of a common platform on which voice, video and text-based communications tools, like email, can all reside together to create a unified user experience. By integrating their disparate communications mediums, enterprises can reduce communications-based disruptions and enhance collaboration among workers, leading to greater productivity. In addition, unified communications solutions can be integrated with business applications such as enterprise resource planning (ERP) and customer relationship management (CRM); this greatly enhances the ease with which workers can access business data, especially outside of the office. This could ultimately enhance operational efficiency and customer service. According to research firm Gartner, as unified communications environments become more pervasive, it will reduce the number of different communications vendors with which a typical organization works by at least 50 per cent. Videoconferencing Among the communications tools available to MNCs, high definition videoconferencing technology such as Cisco’s telepresence solution, may have a greater role to play as workforce and travel budgets shrink. Thanks to a convergence of factors – including improvements in video streaming technology, the falling prices of high definition video display panels and the proliferation of broadband connections – businesses can now offer an exceptionally lifelike and immersive videoconferencing experience. This translates to reductions in travel expenses, a smaller carbon footprint and hence a more sustainable business. In addition to enhancing the virtual meeting experience, the fine detail delivered by high definition videoconferencing also opens the doors for its use in a variety of critical applications by a wide range of industries. A garment manufacturer in China could, for example, use high definition videoconferencing to highlight – down to the last fibre – its craftsmanship to a client in the United States, or remotely collaborate in real time with design teams in other countries to put the finishing touches on a product. In healthcare, high definition videoconferencing can make medical specialists more productive by allowing them to conduct visual diagnosis of patients or remotely provide advice in live surgical operations. In the educational sector, pin sharp, life-size videoconferencing images can facilitate a more effective remote learning process. These are only a handful of the ways in which videoconferencing can help many different types of businesses work more efficiently and effectively. According to a study by Frost & Sullivan, the global videoconferencing systems and services market is likely to expand from US$1.63 billion in 2007 to US$4.2 billion by 2012. MNCs need to adopt a flexible and cost-effective IT procurement approach that transforms operational processes to do work more efficiently. The growing demand for managed IT services and advanced communications solutions serves as proof that they are responding to this challenge. On the other hand, the challenge for managed IT service providers will be to develop solutions which are tailored to fit the needs of different industry verticals, customizable for individual enterprises, and tightly integrated into business processes, while adhering to an IT best practice framework. In the coming years, there is likely to be progress on this front, as managed IT service providers continue to innovate and create value-added services designed to help improve application performance, IT governance and business value creation. In so doing, we expect managed IT service providers to move up the value chain to become the trusted IT partner to MNCs over the longer term through the managed and hosted services market.