NBN a threat to smaller players: analyst

The national broadband network poses a threat to small IT companies in rural and regional areas, according to a senior industry analyst.

Claudio Castelli, senior analyst at technology analyst firm Ovum, says the shift to cloud computing – whereby technology resources are accessed via the internet – means telcos such as Telstra and Optus can use scale to offer remote services at lower prices.

Castelli says while customers in rural and regional areas currently prefer the personal touch of local service providers, this will change within the next five years, fuelled by the NBN.

“The smaller players will need to take on more of a business consulting role… These guys will have to evolve and some of them won’t survive,” Castelli told the Australian Financial Review.

Castelli’s comments come on the back of an announcement by Optus that it has partnered with Google to offer internet-based applications to SMEs.

Previously, Optus only offered infrastructure – leasing computing resources such as memory capacity and processing power – as part of its cloud computing options for businesses.

Optus SME managing director Rohan Ganeson says the new Google Apps, to be introduced in the second quarter of the year, means SMEs won’t have to worry about maintaining backend IT systems.

Telsyte research director Foad Fadaghi says Google is slowing dominating the SME software-as-a-service market.

“Certainly under the National Broadband Network, there are some concerns among companies that stronger brands such as Google could become ISPs,” Fadaghi says.

Optus chief executive Paul O’Sullivan recently told a forum that software-as-a-service applications will become more mainstream in the future.

“It’s definitely the way software offerings are going. We’re seeing a massive push from on-premise to software-as-a-service applications,” he said.

The Optus partnership is in response to Telstra’s T-Suite, which provides SMEs with internet-based access to a range of business management and productivity software from suppliers such as Microsoft.

Meanwhile, the Internet Industry Association is furthering its efforts to develop a code of practice to protect ISPs against further copyright infringement claims.

IIA chief executive Peter Coroneos says the association is also keen to work with rights holders to develop new business models in a bid to make content more accessible for consumers.

Coroneos has also called on the courts to recognise that ISPs and other technology service providers are only facilitators of communications initiated and controlled by consumers, arguing “shooting the messenger” fails to deliver an appropriate outcome.