Paul Wallbank – Brilliant Communications

Author: Paul Wallbank

  • Telstra’s $0 plans

    Telstra’s new bundled plans offering a free laptop with their wireless plans is a good move to improve take up of wireless Internet.

    It’s surprising none of the providers haven’t offered these deals sooner given entry level laptops are cheaper than mobile phones and these plans have proved an resounding success in the mobile industry.

    As with all these deals, the devil is in the small print. You may be getting a “free” laptop but the cost of the wireless broadband will easily make up for this. The total price of the plan over the 36 month contract is $3,564 which would buy you a lot of laptop.

    36 months is a long contract and we can expect to see prices drop and better deals appear as the other companies respond.

    Also, a $700 laptop is a pretty basic beast many business users will find doesn’t meet their needs.

    Overall, this is an interesting deal that’s going to radically change the business market. However I’d recommend most users sit and wait to see what other deals become available.

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  • Budget 2008

    The new Federal government’s budget shows Canberra as lost on IT and communications issues under this government as it was under the Howard administration.

    An interesting development was the continuation of the Australian Broadband Guarantee.  This flags the likelihood that all the proposed broadband rollouts are really still born with the 4.7 billion proposed being absorbed into the general 20bn building Australia fund.

    It seems the obsession with controlling the Internet will continue with the trial of ISP based filtering to go ahead. At least we’re getting a few more details on how this will work, although I’m still not convinced our Federal politicians have any inkling of the scope of resources required to run this program effectively.

    The changes to software depreciation rates and fringe benefit tax rules for laptops are a negative marginal effect which shouldn’t really change much.

    Overall, this budget is best described as “mostly harmless” to the Australian tech scene.

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  • Kevin Rudd’s war on the Internet

    Australian Internet providers must be wondering what they did to upset the new government. Not only does the Rudd government want ISPs to filter the Internet, they are now considering forcing them to police copyright infringement.

    This idea that ISPs should monitor their customer’s usage is bizarre, not only will increase ISPs overheads but it will also mean thousands of users will be accused incorrectly of having copyrighted material on their computers.

    The frustrating thing with this flawed proposal is that it protects the incompetent and greedy record labels while nobbling the telecommunications infrastructure most industries increasingly rely upon.

    Rampant corporate welfare, favouring sectional interests and ignorance of the growing role of the Internet and communications were some of the reasons the previous government was thrown out.

    If the Rudd government repeats these mistakes, then we can only conclude the problem is endemic in the Canberra public service and beyond the scope of either political party.

    Hopefully both the Australian and British governments will throw these proposals in the bin, but it’s a worry that the new Labor administration seems to be following in the steps of its Liberal predecessor.

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  • The razor gang goes down a tired old path

    Lindsay TannerOne of the great features of the IT industry is how incoming ministers and Managing Directors stand up and announce how they can save some improbable amount of money on their IT spending.

    It always ends in disaster and usually ends up enriching one of the big multinational consulting outfits.

    The finance minister, Lindsay Tanner, has fallen into the trap his Liberal Party predecessors fell into by announcing a program to find “double dipping” and waste in IT services.

    The most delicious part of his announcement is that he will probably use external consultants to find this waste.

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  • Lessons from Commander’s mistakes

    Will cutting senior management and 30% of the workforce be enough for Commander to survive?

    The recent travails of Commander Australia are a lesson for all managers and business owners in technology industries.

    When Commander were floated in January 2000 they had a wonderful position in the market with over 100,000 small business customers and being the name for small business communications systems. No competitor could come close to them.

    So how did they manage to get themselves into a position where their stock price has dropped 80% in six months?

    The first point was they became greedy; as the former small business arm of Telstra they tried to overcharge for the older systems many of those 100,000 customers had. So clients went elsewhere.

    Faced with a declining market share they decided to look to new markets rather than examine why their core business was shrinking; they went on a bank funded acquisition spree.

    Like many managers in the technology sector, the managers of Commander didn’t understand their own market. Nothing shows this better than the references to computer hardware in their announcement to the ASX.

    In the ASX presentation they blame in part the “low margin” hardware business. This of course begs the question as to why they were there in the first place.

    It’s no secret margins are awful in the white box business. Unless you have a very good business model you can’t survive in it and it’s questionable whether CDR had a model at all.

    The lesson from Commander’s demise is that the technology sector is a tough market and to survive it takes tough management who understand that market.Too many businesses, like Commander, think a few acquisitions can grow their business into markets they don’t understand.

    In Commander’s case they went into the IT hardware and enterprise support markets. These markets are as different as chalk and cheese to each other and totally outside Commander’s core telecoms business.

    Personally, I think Commander is doomed. The brand name is tarnished and there are thousands of more nimble, better run competitors. It’s certain many of those competitors have learned from Commander’s mistakes.

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