Connectivity holds regional Australia back from the cloud

Connectivity remains a key concern for businesses in regional areas and a key obstacle from adoption of private or public cloud-based services according to Ilkka Tales, chief executive of hosted and telco services company, Anittel.

Tales told Computerworld Australia the unreliability of connectivity in areas outside of major cities meant regional businesses were hesitant to trust their data in a multi-tenant environment.

“If you mention the cloud, they ask if it’s going to rain outside,” he said. “It’s not awareness, the issue they have is connectivity. They know their connectivity to that big old internet goes on the telephone cable that runs outside their offices and invariably, every three years there’s a bushfire, their telephone poles get burnt down, they lose connectivity complete and you want me to put my data where?”

IDC statistics indicate a strong move amongst Australian businesses toward private cloud services, with 85 per cent of those surveyed expected to adopt some form of service by 2013. Key areas of interest include email and collaboration services, as well as testing and development.

However, according to Tales, businesses without a reliable connection continue to be reticent toward such services, preferring to host their data on-site or, at the most, allowing for hosted drives and servers within Anittel offices.

Tales said the National Broadband Network (NBN) rollout would likely change these priorities, as businesses in these areas would have more choice in connectivity and thereby the ability to focus on other priorities.

Townsville, Armidale, Willunga and Kiama Downs are the first regional reas expected to receive a fibre connection of more 100 megabits per second (Mbps) from early next year, with a further nine regional sites to receive a fibre-to-the-premises (FTTP) connection later in 2011 as part of the network. SMBs are expected to drop more expensive business plans in favour of more flexible consumer alternatives on the new network, with one Tasmanian pharmacist already proclaiming the benefits of the switch.

For the meantime, however, most businesses would need continue to focus on managed and connectivity services for their IT requirements rather than the cloud.

“It’s baby steps: It’s not an evolution, it’s very much a revolution from a customer perspective,” he said.

The one-stop IT shop, listed on the ASX under merged brand Hostech (ASX:HTC), has continued aggressive expansion plans into regional Australia, acquiring eight companies this year alone with the motivation to build its customer base and internal staff numbers.

The acquisitions have seen Hostech’s revenues increase from $2.4 million to $19.4 million in the six months from 31 December 2009 to 30 June 2010, and full-year earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.2 million.

While it operates in the major cities as well, it counts the majority of its customer base in regional Australia.


Copyright © 2010 IDG Communications, Inc.

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