Topping the 2000 flagpole

While the dotcom crash galvanised the public mind in 2000, Australia's IT managers dealt with a host of real issues and challenges. Helen Han rummaged through 12 months of Computerworld files to come up with six of the unofficial new millennium's hottest stories.

1 Microsoft hits back at judge's monopoly label The US Federal Appeals Court ruled in April that the software giant is a monopoly. Microsoft's angle was: "Having an extremely popular product does not make the company a monopolist."

Central to the antitrust case is Microsoft's alleged tying of its Internet Explorer (IE) Web browser to its Windows operating system. Government prosecutors argued that Microsoft used its monopoly power in the OS market to also control the browser market.

While industry estimates indicate more than 90 per cent of PCs worldwide run Windows, Microsoft insists it has attained market leadership by virtue of its technologies and hard work, not through anticompetitive business practices.

Microsoft is in the process of appealing the US Department of Justice ruling to split the company for 10 years, which analysts predict is likely to delay the final ruling on remedy action for up to two years. Gartner Asia-Pacific research director Bruce McCabe says Microsoft will use its seemingly unlimited wealth to "drag" the appeals process out.

2 ASPs face an uncertain future

Application service providers (ASPs), third parties who deliver applications through a centrally managed model which entails relationships with management, application network, and implementation partners, are breeding like cockroaches here and abroad.

IDC says the main driver of the industry's growth is the attractiveness of lower TCO (total cost of ownership), and with e-commerce forecast to generate 30 per cent of ASP revenue over the next five years, ASPs will become the speed-to-market enabler for e-business.

They also hold the promise of helping clients alleviate the IT skills gap.

Although research group Gartner predicts the Asian ASP industry alone will be worth $2 billion in four years, analysts agree the model will take time to achieve groundswell among large organisations and small to medium enterprises over the next few years.

Not denying the regional market is hotting up, Gartner chief analyst for the IT market Rolf Jester claims 60 per cent of ASPs in the current marketplace will fail, primarily because of an "incorrect understanding of the business model they are getting into".

3 B2B marketplace explosion

Gartner predicts B2B e-commerce will hit $11.4 trillion in sales transactions worldwide by 2004, and large companies this year wanted a slice of the pie.

The most ambitious e-marketplaces to launch here were CorProcure in July, an $8 billion cross-industry super portal for 14 of Australia's largest enterprises, and Cyberlynx, a $20 million auction hub involving major banks, retailers and trans-Tasman telecommunications companies. Numerous courts and federal government agencies also jumped on the B2B bandwagon to streamline archaic administrative processes and make the shift to a paperless work environment, though many of them are still in pilot stage and haven't produced any quantifiable business benefits.

A Com Tech client survey in November claimed B2B may be taking a back seat among the enterprise, with only 10 per cent of the IT consultancy's clients using e-marketplaces. While companies recognised the potential for significant cost savings, only 22 per cent of them had an in-house B2B strategy, and 27 per cent were using external consultants.

Overall, Andersen Consulting (trading as Accenture in the new year onwards) says it is clear who the winners and losers in the B2B environment will be. "There will be a rationalisation of B2B exchanges - the market isn't big enough to feed," said Derek Young, regional managing partner of Accenture Australia.

"Large industry players, those who actually make up the industry like large investment banks who specialise, will have competitive advantage.

4 The IT skills issue and R&D

IT&T industry leaders blasted the federal government's 2000 budget in May as underwhelming, citing R&D and skills shortages and the budget's reliance on 3G spectrum sales to fill revenue holes as major reasons for dissatisfaction. In its federal IT&T budget in 1996, the Howard government cut R&D concessions from 150 per cent to 125 per cent, and since that time the IT industry has lobbied the government to reverse that decision.

According to the Australian Information Industry Association (AIIA), one third of total expenditure on local R&D is spent by the IT industry, mainly on software development. The AIIA maintained there was a critical local IT skills shortage, claiming the need for an estimated 15,000 extra places in university IT courses, and further claiming that R&D was ignored in this year's budget.

Paul Budde, independent telecommunications industry analyst, branded the federal IT budget inadequate, saying: "It highlights that there is no vision and no blueprint of where the (IT) market is going."

The government pumped $5 million into addressing the purported skills shortage, launching the National Information IT&T Skills Institute this year to train first-time IT industry entrants and existing IT workers wanting to upgrade their skills.

Leading Edge research revealed in November that 77 per cent of IT executives said they committed less money to staff training, citing a lack of support from management and a lack of time as hindrances. The research also found that more than 60 per cent of companies surveyed (covering 80,000 employees) had unfilled IT positions, which Leading Edge claimed also supported figures showing that more than 1 million job vacancies existed in a global IT industry of 10 million.

A Morgan & Banks executive survey in May said 58.9 per cent of companies felt current education and training for IT industry was insufficient.

In May, the EL Executive Demand Index revealed big IT companies in Australia were experiencing large shortfalls of professionals for specialist roles, and more than half said there would be too few skilled workers to fill IT jobs in the next 10 years. IT executive demand had fallen 100 per cent in the eight months to April 2000, the drop being driven by volatility in high-tech stocks and the lack of new IT investment by businesses before the introduction of the GST, the study found.

5 Federal government outsourcing

Plagued by massive budget blowouts and unmet contractual agreements, the federal government's controversial IT outsourcing program is under review. Opposition spokesperson for IT Kate Lundy said taxpayers and local IT organisations were the big losers of the program, as current outsourcing arrangements were only of benefit to multinational companies.

More than $5 billion worth of contracts have been tendered to date, but the government was forced to stall the program until it completes a review to be handed down by Christmas.

6 The LoveBug

It was a year of spreading viruses when IT managers realised the importance of protection, and virus writers discovered new social engineering techniques.

The ILoveYou bug created havoc spreading to more than 45 million e-mail users worldwide including some of Australia's biggest companies such as Qantas, BHP and Coles Myer.

The Internet has made e-mail a hot workplace issue at the start of the millennium with many organisations introducing monitoring software to reduce its misuse, particularly in relation to pornography. Computerworld revealed how lack of legislation has exposed employers to legal challenges from employees who oppose e-mail monitoring in the workplace. One landmark case involved Chevron Corp, which paid $2.2 million to four female employees to settle a lawsuit in which the women claimed they were sexually harassed with e-mail jokes.

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More about Accenture AustraliaAndersenAndersenAndersen ConsultingAustralian Information Industry AssocAustralian Information Industry AssociationBHP BillitonChevron AustraliaColes GroupCorprocureCyberlynxDepartment of Justicee-marketplacesGartnerIDC AustraliaMicrosoftMorgan & BanksQantasUS Department of Justice

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