The Internet has so changed the way management services are delivered that a new market has sprung up. The changes involve moving management of traditional distributed network and client/server systems away from the customer premises and back to remote mainframe-like model of data centre delivery, a model commonly referred to a an Internet data centre. According to IDC, a new type of service provider, a networked infrastructure management services (NIMS) provider, is cropping up in response to the transforming market.
The unique characteristics of these new NIMS players include the centrality of delivery service offerings that will support the needs of customers of Internet-based e-business, the incorporation of Internet management services as part of service offerings, and perhaps most significantly, the delivery of these services from data centre-type environments.
NIMS providers will be delivering management services for a broad range of networks -- including local and wide area networks, intranets, extranets, the Internet and virtual private networks and the networked servers, applications and clients that are part of these systems.
Demand switches to specialist skills
An 8.5 per cent decrease in advertised IT positions in Australia over the past 12 months reveals that older, traditional, high volume IT skills are giving away to newer specialised "impact" skills, according to the Icon IT Trend Index industry review.
According to the report, the decrease in advertised positions is overshadowed by the number of new IT skills and continued strong growth in the communications/network/Internet fields. Of the 1514 IT skills on the market today, 484 have sprung up in the past 12 months -- the average for the past five years is just 250.
Jobs in Communications/Network/Internet have increased in demand by over 44 per cent with 67 of 133 Internet skills being totally new. GST was another of the most prominent new skills advertised, emerging in exactly the same was as Y2K did two years ago.
Buyers begin to sample online wares
According to the research released by Red Sheriff this week, the number of Australians purchasing online has increased seven-fold from a mere two per cent in 1997 to 14 per cent in 2000. The research company sought to take an in-depth look at what was motivating an ever-increasing number of Australians to shop online.
The findings are good news for the burgeoning e-tailing sector with strong long-term growth forecast as a growing number of younger adults turn increasingly to the Net to browse for products and services online. Research figures from Red Sheriff earlier this year indicated that the number of Internet users purchasing online would rise to one in every three users over the next year. Currently the shopping segment remains dominated by the early adopters. They are experienced shoppers who have built-up Net know-how over series of stages, which include trialling Internet banking or share trading prior to purchasing goods or services online.
Who knows what about ASPs?
An IDC survey of 400 US corporate officers with influence over technology decisions revealed that more than half of had familiarity with the term application service provider (ASP), but this proportion dropped to six per cent when the respondents were asked if they had "detailed knowledge" of ASPs. IDC found that only those sites defined as leading-edge technology adopters had a significantly high proportion with detailed knowledge (43 per cent).
Despite the coverage in the global trade and business press, the awareness levels are still very low, particularly within smaller companies. ASPs have been busy building partnerships and infrastructure but to retain the momentum and interest they have gained within the IT, investment and press communities, they must turn their attention and resources to educating customers and proving out the vision, IDC recommends. This is a lot to ask given the complexity of the challenge and the newness of the model. Being an ASP is a high-risk position and only those that can balance building a robust infrastructure and partnerships while reaching out to customers will survive.
Online retailing builds head of steam
Despite a recent decline in venture capital investment in Internet retail companies, the North American Internet retailing market is on pace to surpass $US29.3 billion in 2000, an increase of 75 per cent over 1999 revenue of $US16.8 billion, according to Gartner Group. As this market continues to mature, large vendors will begin to emerge from the pack as leaders in this space and online retailers must prepare for the reality of industry consolidation.
Leading companies with strong consumer awareness and branding will have the upper hand at this time. Smaller niche players will need to develop partnerships that drive revenues, not press releases. For the current leaders this is a time of bargain hunting because advantageous partnerships with weaker partners that have strong teams, technology or customer bases are now available at lower cost.
In order to survive, Internet retailers have no choice but to demonstrate the capability to achieve profitability in the short term, Gartner recommends. In 1999, online retail activity represented less than one per cent of overall consumer spending in North America. By 2004, Gartner estimates online retail will grow to between five and seven per cent of total retail sales in North America.
Regional B2B growth exceptionally strongAlthough business-to-business e-commerce has just begun to catch on in Asia, investment bank Goldman-Sachs predicts that the value of such transactions in the region will increase roughly 1,800 per cent from $US24 billion in 2000 to $US440 billion by 2005. By 2005 Goldman Sachs expects Asia to generate about 10 per cent of the $US4500 billion global market for B2B e-commerce, and Japan alone to account for $US297 billion.
In addition, the e-commerce boom is expected to boost economic growth of individual Asian economies by 0.2 per cent (Indonesia) to 0.8 per cent (Singapore) per annum. For Hong Kong, the impact of e-commerce will raise economic growth by 0.69 per cent, the report said.
Due to the region's role as a supplier of hardware for the electronics industry, demand for Asian exports is expected to increase, and the impact will be greater for countries such as Malaysia and the Philippines.
Comparing the adoption of e-commerce in individual countries, the report indicated that Australia and South Korea require between six and 12 months before their respective markets for B2B e-commerce are in full swing. Their large economies, good telecommunications infrastructures and Internet-savvy populations are expected to drive earlier adoption of e-Commerce than will be seen in the rest of the region.
Low end servers strong in Asia/Pacific
Although sales of servers in all size classes expanded in 1999, the entry server was the most buoyant segment in the Asia/Pacific (ex Japan) region, according to IDC. Entry server shipments expanded 45 per cent in 1999 over 1998 while revenues surged 54.5 per cent.
By operating platform, Unix continued to dominate the servers market in Asia/Pacific (ex. Japan) with 46.8 per cent revenue share. Windows NT server revenues surged 83 per cent in 1999 over 1998, which resulted in which increased their market share almost seven percentage points to 25.1 per cent.
Defying market perception that Y2K lockdown would lead to a decline in OS/390 servers, the mainframe platform experienced a moderate growth of four per cent. Unix was the only platform in the high-end segment to post growth in 1999 over 1998. High-end Unix server revenues increased 96 per cent while unit shipments doubled. Server consolidation, deployment of Unix servers for large scale decision support workloads, and Internet/e-commerce workloads helped to fuel the demand for high-end Unix servers. IBM continued to be the dominant server supplier in the high-end segment with 54 per cent revenue share.