NBN blinkers for Australian businesses

Two events in Sydney this week have illustrated the growing digital divide in Australia’s business community, as many managers struggle with rapidly changing markets and workplaces.

In a modern restaurant overlooking the office towers of Circular Quay, Macquarie Telecom and Deloitte Consulting released their 2013 National Broadband Network Business Readiness Survey on Tuesday. A few hours earlier, in a refurbished 19th Century railway shed at the less fashionable south end of town, Google showed how their mapping technologies can be used by businesses.

The difference in venues and attitudes could not have been greater. The heritage rail workshops hosted an event showing how high speed and pervasive broadband is changing the way we work, while the modern building heard how businesses are still struggling to see opportunities.

In a follow up to Macquarie Telecom’s 2010 survey, Deloitte Consulting surveyed 160 Australian medium and larger enterprises on how they expected the National Broadband Network (NBN) to affect their business.

Business expectations stuck in a rut?

The surprising thing is that how little the expectations of businesses have changed between the two surveys.

In this year’s survey a little under half the respondents expected to offer different types of products as a consequence of the NBN, exactly the same as the 2010 study

The proportion of businesses that expected changes to the way they communicate with suppliers and customers dropped from 57 per cent in 2010 to just over half this year, a surprising fall given how social media use has accelerated over the last three years.

One area where attitudes have changed dramatically is the growing recognition of how the NBN will transform the workplace. The number of businesses that recognise the need for work methods to change is on the rise, with over half the managers surveyed expecting the NBN will transform where people work as opposed to only 20 per cent three years ago.

This is consistent with the Federal government’s National Digital Economy Strategy released last year which expects 12 per cent of the workforce to be teleworkers by 2020; although it’s worthwhile noting Silicon Valley’s recent backlash against remote working lead by Yahoo’s Marissa Meyer and supported by Google.

A disturbing complacency

So what’s going on with these statistics? While this year’s sample size is smaller –160 this year compared to 540 in 2010 – there’s a disturbingly relaxed attitude discernible in many businesses when it comes to the NBN.

A charitable view is that many businesses are already using the internet effectively and the benefits have already been booked. The NBN won’t make much of a difference to the way organisations work other than delivering faster and more reliable access.

However, that theory isn’t borne out by MYOB’s latest Business Monitor, released last week, which found that of the thousand Australian small to medium enterprises questioned only 16 per cent said they use cloud computing and 38 per cent have a business website.

While the businesses queried by Deloitte are bigger than those surveyed by MYOB, it appears the relaxed attitude towards the web is shared by Australian firms of all sizes.

The disruption equation

Just how ill-considered this complacency is becomes abundantly clear when one compares it to the ideas featured in the Google event. Those who attended the Google Maps Atmosphere showcase would have seen the search engine highlight how businesses around the world are using its mapping products.

Some of Google’s case studies included the American Red Cross’ use of cloud services to respond to crises and start-ups like City24/7 converting New York’s bus stops into local news centres with smart sign technology.

One of the exhibitors at the mapping event was a treadmill fitted with the iFit app that simulates runs anywhere in the world by feeding Google’s Street View into a screen in front of the jogger. The treadmill even simulates the hills you’d encounter if you were really running those roads.

The fact that something as mundane as gym equipment is now connected to the web should make every manager or business owner think of how the internet is changing their markets.

One Aussie company that did get a mention was electricity supplier Ergon Energy which is using Google’s maps to manage vegetation that might affect their transmission network.

While Ergon isn’t the lone Australian company using online services to change and improve its business, the Macquarie Telecom-Deloitte Consulting and the MYOB reports both show a large swathe of local enterprises still oblivious to the changes happening around them. This is the digital divide evolving in the Australian business community and it’s one which should worry shareholders and managers.

Regardless of which version of the NBN we end up receiving, the way we do business is going to undergo a radical change. It’s time local managers started paying attention to whether they want to seize the opportunity or lament its loss later.

More from Business Spectator


Please login or register to post comments

Comments Policy »

Sorry I have to disagree. Many of the things you listed simply are not affected by the roll out of an NBN. For example why would the NBN affect how a company communicates with suppliers and customers? We already have access to social media, email, voip and video conferencing. The NBN will lower latency times by something in the vicinity of a 10th of a second on social media and will improve the quality of video phones. Neither of these are game changers for how you communicate.

Also cloud computing is not some kind of magic pill that suits every situation. You do a needs analysis and you determine whether it is the right option. I have collaboration suites, remote access systems, and high availability clusters keeping it all running. None of which is "on the cloud". For my business latency and real-time synchronisation is the most important criteria, something which cloud computing is poor at simply by what it is.

I'm surprised at the general lack of support for NBN in these comments. Kye - glad that you have a good IT solution for your business. If you averaged the cost of running it for three years and divided it by your staff, how much are you paying per user per month?
I'm guessing your reference to latency and real-time sync refers to "private cloud" or hosting your servers. These are less of an issue when it comes to cloud software (SaaS). Faster access to SaaS apps is a great reason to get the NBN.
What's your source for that stat about the NBN lowering latency by a 10th of a second?

Kye, I totally agree with your POV, and add that, whilst far from being a fan of the NBN, the government's focus on trivial consumer 'benefits' such as faster movie downloads rather than the potentially far more valuable business and government benefits is a total mystery, unless of course it is for purely cynical (aka electoral) motives.

Yes some lack of understanding of benefits - but perhaps businesses are understandably conservative approaching new capital investment in rapidly changing technology. And or perhaps mature businesses are simply discouraged from doing anything much by a whole range of factors!

At the core of the economy are business delivering goods and services but there is a limit to what can be pushed up and down a tube of fiber.

The list of current possibilities will likely adopted in some form particularly as the next computer literate generation gains increasing power - but then not without the same divide on new possibilities.

Business like government in Australia is plain dumb. That is why Australia is always done over by overseas business. The fact that Australia has to import everything and then sell off anything of value (businesses, freehold agricultural land, etc) tells a compelling tale and then of course our dodgy business leaders need to import (cheap) labour because they do not want to pay Australians.

SO here we have the NBN. The coalition (the business side of politics) will do as its masters demand and it comes as no surprise that Malcolm Turnbull would like nothing better than to shut it down and stay with copper and wireless which will be dead in less than 10 years at which time it will all cost much more, not even counting lost opportunities in the economy.

The sooner local business is replaced by overseas competitors the better as badly run businesses do not deserve to last. Australia has suffered too much for too long under these dinosaurs.

Rambotrader, ever thought about packing you bags and moving off shore to live?

457 visas do not equate to cheap labour as you keep pushing. If employers do not meet Australian standards, they are prosecuted. Your union buddies will tell you that. And the reason we import everything is because unions have turned this country to s__t. No one wants to do business in Australia because it's to expensive. Even overseas companies are balking at coming here, with those already here winding down their Australian arm while growing the overseas arm. The ones that are coming here are predominantly retail anyway and import their product. Several months ago Gerry Harvey was screaming unfair as people were buying over the net. The reason they were doing that is because it is cheaper, up to 70% cheaper in some places. This is not because they were better business people.

You do also know that most countries are implementing broadband policies similar to the Coalition's, and seeking private, public partnerships to roll out the plan. You are aware Labor's policy gives 100% control of electronic medium to the government. But than maybe that's what you want, a socialist society.

Turnbull is not about shutting down NBN, he is giving us the choice of connection, existing copper or fibre. Please yourself what you want, I just want the chance to have a choice. You are also clutching at straws saying copper and wireless will be dead in less than 10 years. What do you base that on.

Contrary to this article, I believe business will eventually embrace fibre when they realise the true potential. It will also most likely be a tax deduction for them. I just don't see the domestic advantages of the NBN, particularly when Turnbull's policy will see speeds up 5 times what we have now. But is saying that, the Coalitions policy allows you can have fibre connection if you want.

The trouble with the coalitions policy is that the upload maximum speed is only 10mb/s which hampers the end user in using the cloud (home users will still want to upload their photos, music, videos). This is were fibre shines.

I am struggling to see why the NBN is supposed to be a game-changer in general business. The vast majority of small business are already well catered for if they have ADSL 2+. Large business is already connected by fibre. This is the falsity of the NBN argument that somehow its existence will revolutionise business and society. How? virtually everyone has internet already and the NBN will fix those dead spots and remote areas but that's all. Email, social media, web access and even skype etc all work NOW. the fact that they might work a little faster is a bonus - not a game changer. Im not anti-NBN, but I am anti-hype which has this roll-out described as the best thing ever and in reality it is no more than buying a new car to replace your 10year old one. Nicer, newer, perhaps a bit faster but still just gets you from A to B. Oh, and you have a brand new debt to deal with. The parallel is very similar.

You totally miss the point Geoff. Data requirements have been roughly doubling every year. If this continues then in 20 years time we will need 1 000 000 times as much data traffic as now. Copper is a dinosaur.

Malcolm Turnbull recently made a media appearance and stated that downloading DVDs accounted for a large amount of the date requirements. This demonstrates how out of touch Malcolm is as he cannot see the future, just like big business which pays to have this side of politics elected. It is a perverse relationship.

One has to look at the develops which occur daily in IT to appreciate the future which business is too blind to see. There will come a day in our lifetime where many people will not get up and commute to work. It is a whole changing landscape. What dinosaurs see is the past. What is coming is work from home. And business will want the other half with tele-commuting and ever increasing sophistication with software and of course the Cloud.

The reason why I have bagged out business, especially big business, in Australia is because this sector has done so much financial harm to the nation with its inability to compete in anything much other than agriculture and mining. And then we sell off the mines and our freehold agricultural land. It would be criminal in most other nations but not in the land of opportunity. The trouble is Geoff when its gone its all gone.

Maybe there will come a day when people won't even get up.

Can't wait so I can turn myself into bits and export me self down the digital highway. But before that I just want a simple Internet connection and a hard disk wired to my brain.

Having thought about it all - best I go wireless?

That argument only has validity if A) the current network is at its limit (and it is not) and B) the network cannot be incrementally upgrade (and it can).

Residential users scarcely use much of their bandwidth now so increasing it by an order of magnitude will make very little difference. If you download a lot of torrents or illegal downloads then the NBN will be quite nice but I hope you dont expect me or anyone else to be particularly sympathetic to that use.

a FTTN can be incrementally upgraded as demand increases and WHERE it increases. Half the price, twice as fast and gives evrybody what they NEED - other than pirates and porn downloaders who can still pay for the fiber connection if they want it.

I keep reading this nonsense about business needing the NBN and yet there is hardly any attempts to identify what that need is. And then there are residential users and the pretence that they all need gigabit speed multi-terabyte connections to do.... well what exactly?

That is the (unanswered) question.

Some good reasons to use the NBN:
High-quality video conversations. Yes we have Skype and the quality is generally terrible. Particularly if there is more than one party. What advantage is this to business? Sales people can build relationships and sell more deals if they can communicate over a hi-def video.
You have to see it to understand the difference.

Fast access to cloud servers. Moving images from a local device to cloud storage is hugely important to business. Amazon's Glacier archival storage costs 1c/GB/month. You can't get enterprise-grade storage for a fraction on site or hosted.

I could add more but the night is short. Ask yourself why Japan is *upgrading* to 2Gbps. Just because you can't imagine how the bandwidth could be used doesn't mean there is no use for it. Wallbank makes a great point - Australian businesses lack the imagination to take advantage of internet-based technologies. These comments prove his point.

Businesses have already been radically changed by the internet and mobile/personal devices. Look at how QANTAS, BANKS etc interact with their customers. Look at how the internet created/destroyed WOTIF/hotels, Sony/Blockbuster, gambling etc. The disruptive technology/innovation was the internet and mobile/personal devices, not the NBN, which is targeted at proving FIXED-LINE high speed access when the future is all about wireless high speed internet for mobile/personal devices at an affordable price. I haven't plugged a wire into my laptop or tablet for over 2 years, I use my mobile phone for all calls, and get all my news and entertainment over the internet. When I look at the NBN, I see higher costs and monopoly barriers that will stifle innovation. Today I get unlimited download capacity at 8Mb/s for $60 a month over the same line I used to get 20MB per month at 56kb/s for $60 a month. In the future I believe some innovative company (not Telstra or NBN) will provide me unlimited download capacity at 80Mb/s for $60 a month over the same line or wirelessly if I prefer.

Great that you have such a connection. Many businesses don't, and can't, yet they're expected to compete.