What will Santa have in his sack for the Australian channel? Many reckon next year will be better than this year, not to mention last year. Is that just wishful thinking or will we all be laughing come December 2004?
It's not hard to predict that security, storage, mobility and integration will be counted among the technological themes for 2004. However, which of those will give something back to the channel? Which will fail in their promise? Many say security technologies will cast a long shadow next year.
Sheldon Walters, business development manager of managed security services provider Zento, predicts 2004 will see a shift to protecting networks at application level. As a result, firewall products and services and operating system/application patch management will be big growth areas. 'The managed firewall market will rekindle in 2004 as firewalls become increasingly application-enabled,' Walters says.
In the past, few firewalls and managed firewall services prevented attacks -- but that will begin to change next year as firewalls and intrusion detection systems (IDSs) converge, he says. 'Until now, most companies' firewalls have only protected the network layer, and only some -- add IDS application protection,' Walters says. 'This will be the big race in the firewall market next year.'
Patch management has been a relatively untapped market, he says, that will see 'huge growth' in 2004 due to its cost-effectiveness. 'Businesses that suffered MS Blaster are now more willing to spend on proactive security,' Walters says. He says spending on antivirus and managed services will eat up a big chunk of IT budgets next year as viruses cause more chaos. 'Currently, antivirus is characterised by a 'set-and-forget' mentality.'
Nick Verykios, managing director at distributor LAN Systems, says security is a sweet spot for growth as it is integrating into live networking. However, resellers must act to gain from the change. 'Boards must secure the storage and access of data assets by upgrading virus defence tools, implementing active firewalls, IDS and content security tools,' he says.
Verykios says resellers can structure 'very profitable' annuity streams of income, recurring service revenues and remote maintenance arrangements by taking over security policy for their customers. 'There are a host of finance options available, allowing them to structure a monthly fee -- so the expense remains operational,' he says. 'Merry Christmas Australian IT resellers!'
Geoff Rhodes, general manager at Tenix Datagate, says the security market will continue to develop steadily. Government and enterprises alike have been taking their security needs more seriously as 2003 progresses and that trend will continue. Managed security will also do well, he says. 'From our perspective, 12 months ago, trying to get partners or outsourcers or integrators interested was difficult. By the end of 2004, people will see a very solid [security] market,' he claims.
Rhodes says the chance of cyber-terror attacks taking out corporate networks in a targeted fashion is rising. Although attacks are not particularly likely, the knowledge exists and organisations should take the possibility into account. 'Most organisations have got pretty good at protecting themselves from an undirected attack, but not a concerted approach,' Rhodes says.
Phil Sykes, CEO of Request Broadband, tips security as the overarching technology in all its various flavours but voice over broadband as the one offering real opportunities to the channel. 'Business is far more discerning and now seeks symmetric broadband connections as their businesses increasingly send as much data as they receive,' he says. Sykes says business-grade services will gain versus residential grade, with cost-effective IP VPN uptake for interoffice communications in particular, rising rapidly.
According to Sykes, voice over DSL (VoDSL) will prove especially attractive to smaller businesses that can save costs by collapsing multiple lines into a single connection. 'VoIP will begin to appear in numerous VPNs that are being established, enabling geographically distributed offices to make voice calls over existing data networks,' he says. The challenge for the channel, Sykes says, will be learning to deliver complex associated services.
Deborah Homewood, managing director at Asia Netcom in Australia, has her fingers crossed that the telecommunications market will stabilise and prices will stop dropping. Regardless, consolidation via price erosion will continue to force smaller Asia-Pacific players out. '[But] price erosion can't continue, and then we will see an erosion of quality and people actually starting to get what they pay for,' Homewood says. 'We might see a bit of sensibility back in the market for everybody's sake.'
As broadband ramps up, so will wireless, MPLS and IP VPN and video over IP, she notes. 'Companies have stayed on layer 2 technology. They're all stuffing about and saying 'How can we do it?' These technologies are still in the early-adopter-if-you-will space, but I think towards the latter half of next year we'll see them in a lot more enterprises.'
Homewood also tips a rise of Chinese telecommunication companies in the Asia-Pacific as the Chinese market becomes deregulated. 'That will have impact in [telco] services. Asia-Pacific is still the fastest growing region. It's crucial to the success of North American organisations as well as Australia,' Homewood says.
Dave Stevens, managing director of services provider SecureTel & Brennan IT, agrees next year will be 'another amazing year' for broadband, particularly broadband over wireless connections. Faster speeds, connection over bigger distances and improved functionality mean coverage will continue to rise. 'I also think that we will start to see some rationalisation of the broadband market with larger players starting to acquire some smaller resellers without their own networks or a value-add,' Stevens warns.
LAN Systems' Verykios says we will see plenty of service providers compile broadband bundles in 2004 that include connection, provisioning billing and CPE [customer premises equipment] as a monthly charge. 'This is already starting to happen. Again, someone has to sell this to the ultimate user because the demand is there but there aren't too many SMBs, with the need, going shopping for this,' he says.
Verykios tips growth in infrastructure products and associated services that address bandwidth management, remote application management, content filtering and web applications management. 'Resellers will have to carefully assess their customer's needs for a good balance. The result will be cash registers ringing jingle bells,' Verykios says.
However, maturity blues will hit wireless in 2004 and crunch resellers who lack commitment, if distributor Integrity Data Systems CEO Ross Chiswell is any guide. He says wireless resellers that fail to move from simple installations to services based on more effective network management will have their margins savaged by increasing commoditisation, he says.
Wireless homes are here but not real reseller opportunities. 'That will become an area for Harvey Norman and OfficeWorks. It has to go to retail superstores or online because of this sector's price sensitivity,' Chiswell says. He says hotspots will appear widely next year in areas where access makes sense, such as airports. Meanwhile, new wireless devices such as Wi-Fi-enabled GSM mobiles will hit the market.
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