Friday Fry Up: Cyber security and the IT pro, Working-from-hardware, Sky TV rugby and broadband

Friday Fry Up is Computerworld New Zealand’s weekly look at the world of IT.

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Cyber security and the IT professional

“Steal a little and they throw you in jail, steal a lot and they make you king.” That old Bob Dylan line rang true during an online cyber security session hosted by IT Professionals this week.

IT Professionals CEO Paul Matthews made the point that if a group of people stood outside NZX and threw rocks at the building, the police would arrest them. But when an attack happens in cyber space, companies can find themselves fighting off the attackers all by themselves. Is the GCSB adequately resourced? Keen readers of Fry Up will know that we sought to answer that question last week, with the GCSB Minister Andrew Little noting that the total GCSB budget for 2020-21 is $221.3 million. Not really a patch on the Australian government’s $1.3 billion spend on cyber defence. Matthews says the GCSB needs to turn from an advisory body into a cyber-crime-fighting body.

The featured guest on the webinar was RedShield CEO Andy Prow, whose been involved in combatting the recent cyber attacks but told the audience he wasn’t going to get into specifics. He did however describe the recent activity as “global scale attacks”.

“The DDoS that we’ve been seeing—imagine you have a web app doing 20,000 to 30,000 transactions a day. It’s now doing tens of thousands of transactions a second.”

To date the largest recorded “global scale attack” was against Amazon Web Services earlier this year, where the peak traffic volume was 2.3Tbps. To put that into perspective, total peak traffic recorded by Chorus—which includes most of the country—during the first lockdown in April was around 2.7Tbps.

Working-from-home hardware

Netflix founder and co-CEO Reed Hastings (a bit more on him later) hates all this working-from-home (WFH) business. When asked how soon the Netflix workforce will return to the office, he replied: “12 hours after the COVID-19 vaccine is released”. He’s a big fan of the “radical candour” that face-to-face discussions enable.

His aversion to WFH is not about a shortage of hardware, despite the strain on supply chains as reported in Computerworld New Zealand this week.

One of the reasons IDC cites for the leap in PC sales in New Zealand is the Ministry of Education’s $87.7 million distance-learning package, which included the purchase of PCs for students in households without appropriate devices.

Ministry of Education Deputy Secretary Sean Teddy says that in August, in response to Auckland returning to Level 3 lockdown, a further $5.5 million was invested in buying an additional 8,000 computer devices for students in Year 9 and above.

Which brings the total to 35,500 computer devices that have been bought for students across New Zealand. “This includes a range of Chromebooks and laptops from several brands. The devices all meet, or exceed, the minimum specifications for devices used in an education situation,” Teddy says.

Further devices will be sent to kura and schools in the coming weeks to meet any remaining demand for students Years 9 and up, as stock becomes available. Meanwhile, 40,000 student households have been given access to internet connections for a free six-month period.

Rugby may lead the way to Sky TV’s resurrection, followed by broadband

A sort of morbid curiosity, the kind that has you gawking at a car crash despite your better intentions, had us looking up the Sky TV’s annual result this week. And we were surprised by what we saw, pleasantly so. You might say a reported loss after tax of $156.8 million is a terrible result, but look beyond the numbers. Check out the strategy which—COVID-19 and patient shareholders permitting—could see the company once again rise to the top of the content heap.

A recap: Ten years ago, Sky TV had a stranglehold on delivering content to New Zealanders via satellite technology, and its various forays into online content appeared half-hearted. When the fibre-to-the-home network enabled multiple online streaming services to enter New Zealand, Sky TV sought refuge in a merger with Vodafone. The Commerce Commission vetoed it. Then the jewel in its crown, the Rugby World Cup, was snatched away by Spark, which had been nipping at its heels by launching its entertainment platform Lightbox.

A new CEO: When he started at the company in 2019, CEO Martin Stewart apparently took one look at the executive team and asked: Who lost the rugby?

A strategy: It’s simple: Rugby is what will win it for Sky TV in the next five years. That’s why it negotiated an ownership stake for NZ Rugby in the company. With rugby it can expand beyond the New Zealand audience, and that’s where the growth in the business model lies. Check out slide 32 of the investor presentation. New Zealand is only a ‘team of 5 million’; we can only consistently be world-class at a few things and rugby is one of them. Rugby isn’t just our biggest sporting export either, it’s arguably our biggest cultural export too. The internet has turned content into a global field, and rugby is Sky TV’s ticket to the game.

Then there is Sky TV’s move to become a retail service provider, with its broadband service due to launch commercially in 2021. It’s has been yabbering about it for some time, but presumably they want to get it right before publicly launching, as customers will quickly churn if they don’t. With the Ultra Fast Broadband and Rural Broadband Initiative rollouts almost complete, it’s good timing—and with 990,000 Sky TV customers, it makes sense.

It’s arguably easier to go down the value chain and add a broadband play to a content company than it is to go up the chain and add a content play to a broadband company. Sport content requires production capability to broadcast games and entertainment content relies on relationships to secure licensing deals in faraway places like Hollywood. While adding a broadband service is dependent on regulated contracts with Chorus and three local fibre companies and a scalable contact centre (the stat of 1.2 million customer calls in Sky TV’s annual report is duly noted). Appreciate that a hardware update for users is likely to be required, but that always feels more like a tactical, rather than a strategic, move.

A rival: Spark, under its former CEO Simon Moutter, made a couple of bets in content with Lightbox (sold to Sky TV) and Spark Sport. The rugby is now back with Sky TV, but Spark is committed to its sports content play. With Sky TV set to become a broadband rival, the telco will look to double down on its fixed wireless broadband offering and put the pedal to the metal on its 5G rollout.

A book: As it happens, another kind of rival to Sky TV, Netflix founder Hasting, has released his ghost-written memoir this week. Early reviews suggest it fleshes out the 125-slide deck about Netflix’s culture that was put online in 2009. All you really need to know is that Hasting runs the company like a professional sports team—if you’re not at the top of your game, you’re out. It’s brutal and admirable at the same time.

Copyright © 2020 IDG Communications, Inc.

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