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The east coast evolution of the Aussie channel

The east coast evolution of the Aussie channel

The stunning east coast of Australia plays host to the country’s most lucrative markets - buy where are the tech hot spots?

From Queensland to Tasmania — including New South Wales (NSW), the Australian Capital Territory (ACT) and Victoria — the east coast of Australia casts a large and looming shadow.

Spanning 2,829,463 km2 — or 37 per cent of the country’s total land area — four states and one territory combine to dominate the national economy.

In addition to the Canberra capital, the area is home to the country’s three largest cities in Sydney, Melbourne and Brisbane, and serves over 80 per cent of the population.

But technology providers are not seeking a geography lesson, rather a snapshot of Australia’s leading money-making markets, nestled along a lucrative coastline of customers.

Whether serving Cairns, Wollongong or Hobart, channel partners are well-placed to carve open new commercial opportunities in the years ahead, starting at the heart of the nation’s capital.

A local touch

The site of modern-day Canberra was chosen for the country’s capital city in 1908, with ACT playing host to legions of government IT business.

“Without doubt, government is the largest sector,” Citadel Group executive director and Jakeman Business Solutions co-founder, Miles Jakeman, observed. “And the Australian Government by far outweighs the ACT government.”

During the 2014–15 financial year, the Federal Government spent around $5.6 billion on ICT infrastructure, much of it likely going to external partners.

But while government contracts can be lucrative for external IT partners, they don’t always equate to enormous profits.

“Government’s not a silly buyer, and it’s got a lot of metrics that are shared amongst the different agencies,” Jakeman said.

This metrics sharing, as well as the sometimes formidable government procurement process, means that, although big ticket IT contracts are lucrative in terms of size, they may not deliver margins in line with overall dollar value.

At the same time, however, a successful public engagement can lead to long-term relationships between partners and government clients, which could be worth millions, even tens of millions of dollars, over time.

For global system integrators (GSIs) operating in Canberra, government contracts can often be cumulatively worth hundreds of millions of dollars each year.

Canberra (ACT)
Canberra (ACT)

While there are comparatively fewer opportunities for smaller home grown IT providers, compared to

the fistfuls of money thrown at big players like IBM, Hewlett Packard Enterprise (HPE) or Capgemini, local suppliers can also gain traction.

“As a rule, convincing governments to buy Australian has been challenging,” Jakeman said. “You’ve got to be nimble and you’ve got to pitch your differentiation.”

While the vagaries of Canberra’s public sector compete and tussle with its potential for lucrative opportunities for local partners, the private sector also offers some tantalising possibilities.

“We focus heavily on innovation and using the latest technologies,” Astute Informatics director Greg Chu said. “And with the private sector, they’re a bit more flexible.”

Not only flexible, but often more willing to adopt cloud-based services, which plays into the hands of Chu and his team.

That said, cloud adoption has not been the exclusive venture of the private sector, with some corners of the government also moving to adopt cloud technologies.

“In the past couple of years, cloud has been starting to pick up, which is good,” Chu said. “There’s been quite a few government forums which have been held here in Canberra, getting people to become more aware and more comfortable with cloud.

“We’ve also done a lot of work around data management, data integration and more recently big data. In recent years, organisations have been capturing more and more data.”

But while ACT-based public sector entities represent a large, somewhat monolithic, market for IT providers, Chu is looking further afield in a bid to diversify client bases and ease Astute Informatics’ reliance on government work.

Around 30 per cent of the company’s business comes from the ACT at the moment, according to Chu.

Yet only a few years ago, that figure was probably closer to 80 or 90 per cent. The reason for this shift, according to Chu, is that the private sector is often a “bit more with the times”.

“A lot of it’s coming from the retail market, or the aged care industry, and other segments such as that,” Chu added.

Innovation

As Australia’s least populous state, Tasmania is often thought of as trailing the rest of the nation, especially compared to the money- spinning opportunities 850km north in the capital.


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