Step up or fall behind

Johannesburg, 07 Oct 2008

South African businesses need to start adapting to international ICT standards, or face being overrun by international companies.

With the imminent arrival of a flood of bandwidth from undersea cables, Stefano Mattielo, Neotel's head of enterprise business group and the network operations centre, says cheap access will spur global businesses to build local operations.

“Whether we like it or not, we will have to become internationally competitive and, right now, neither our mindsets, nor our applications are mature enough to compete at that level.”

He says companies will have to adapt to compete with the rest of the world. “The application sets developed locally, and even those used from international vendors in local businesses, are archaic. When a large international company comes into the market with relevant applications, what will local businesses do?”

Not cutting it

He says South African companies have a tendency to maintain the applications they are using and excusing it by citing a lack of cheap access and small-piped Internet access. “It's very easy to hide behind the capacity argument, but, what will happen when there is excess capacity, is that international business will take advantage of it.”

South African banks are prime examples of businesses that are still using outdated software packages, he says. He explains that these systems will not withstand worldwide competition, and the skills to manage them are hard to find.

While there is a threat of local business being drowned by international organisations, Mattielo says, if local organisations start developing and using globally relevant applications, they will have a chance to survive. “It's time to make sure your applications are not constrained by bandwidth, but embrace it.”

Global trends, such as service-oriented architecture, virtualisation, managed services and cloud computing, are all being discussed by the local market, says Mattielo. However, he adds that companies are not yet implementing them.

Head space

“A paradigm shift needs to take place, where businesses start to adopt these technologies in earnest.”

Over the last three years, Gartner analysts say they have observed many more international companies starting or readying themselves for a major multi-year move away from their aging legacy base of IT systems.

Research VP and Gartner fellow Mark Raskino says models like software as a service and Web 2.0 are driving changes to application architectures and licensing systems. He says cloud computing is on the horizon and South African business must start adapting and preparing for these kinds of developments.

Gartner predicts that developing markets like SA will form a large part of growth for European and American market leaders. Raskino says leading business thinkers are recognising that advanced economies will soon become the beneficiaries of innovations originatingin emerging markets.

It's just not broadband

Mattielo says to become globally relevant, and able to innovate, SA will have to redefine the concept of broadband. “HSDPA is not broadband. For services like cloud computing to work, we need Gb pipes, not Kb and not even Mb will be enough.”

He sees the industry slowly considering these options and expects that, if businesses start looking at technologies like cloud computing, it will happen in two stages. “The first is near-line offloading. It is when customers offload non-critical processes into a cloud computing environment. Once customers become more confident, they will offload more and more until an entire environment is hosted.”

However, he says South African businesses are still far too possessive of their technologies. “People want to see the physical device they have paid for. Even in hosted environments, they want to see the box before they are satisfied.”

The kind of bandwidth companies need to compete is on its way and Mattielo says it's time to embrace new ideas and redefine the way local business thinks.

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