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All that data

There is scepticism in some quarters about productive uses for ultrafast broadband in the short term, but according to a recent survey of prospective New Zealand users -- mostly CIOs/IT managers -- carried out for CIO and our sister publication Reseller News, most think now is the right time to spark up the nation's broadband capacity.

Only six percent of the 54 respondents agree with the statement: "UFB could have waited until demand for high-speed bandwidth was greater".

However, perceived awareness of UFB's impact on IT at the user level is comparatively low. Asked "In your opinion, do your customers understand that UFB and faster transfer of data will impact on the current IT systems they have in place?" less than a quarter said yes.

This shows something of a knowledge gap between enthusiasm for broadband and awareness of its potential uses and impact on commerce.

Eighty percent of the full survey sample agree that "UFB was necessary to spur innovation, and new businesses and sources of employment will result."

Wellington panel

The survey results were presented as a curtain raiser and stimulus to a discussion organised by CIO and Reseller News in Wellington and Auckland in early March.

The topic title contentiously paired Big Data and UFB and asked if either or both could "grow your business".

The phrase Big Data is typically used to describe vast data flows that come from intensive exploration of a phenomenon, be it the astronomical observations of the Square Kilometre Array radio-telescope or the buying behaviour of large numbers of customers.

It would be a mistake to think "Big Data" is irrelevant to New Zealand because of the smallness of our market, says Ullrich Loeffler, country manager of industry analyst IDC in New Zealand, who spoke at both the Wellington and Auckland seminars.

It's the way the data is treated and the value that's derived from it that makes the difference, he says, not the absolute volume.

Big Data's four Vs

Volume is only one of "four Vs" that Loeffler says characterise big-data handling to his mind. Also crucial is variety; both structured and unstructured data (the latter including textual documents, emails and social media postings) are brought together. This data is analysed in real-time as it flows in (velocity) and value is derived from it. Analysis of data from what went on in and around the company in the past and present is used to help predict and steer its future course.

The crucial difference is between the company that regards data as a mere by-product of its operations, and one where management and staff think, "how can we use that data?" says Michael Whitehead of data analysis specialist WhereScape.

Some day soon, he suggests, a company's data holdings could be represented on its financial balance sheet.

It is in the "velocity" aspect, particularly when the data has to be gathered from a number of geographically separated sources or replicated among a number of servers, that high-capacity broadband becomes a necessary aid to such analysis and prediction.

Some data will come from public sources such as Twitter or will have to be stored in the cloud, panellists said, so adequate communication bandwidth becomes crucial.

With applications and data-sources so readily available to businesses of any size; you don't need to be WalMart or the IRD to benefit. We're moving to the point, said EMC NZ country manager Phil Patton, where a corner dairy in New Zealand can mash together data on past buying patterns with a weather forecast for a hot day and predict how much extra ice-cream it should order.

Auckland panel

We could see a whole new breed of company opening up, devoted to aggregating data from public and private sources and providing relevant feeds to commercial users as a service, he says. Some of those companies could be NZ-based. "People are going to want that data very quickly, so they can respond to it very quickly." UFB then becomes a crucial factor in the equation.

Various opinions came from panellists and floor speakers on whether the traditional bogey of scarce international bandwidth will continue to put limits on big-data handling ability, or whether the rise of local datacentres and UFB will meet the demand.

The problem is not just bandwidth, said a speaker from the floor, but latency -- the time taken for even a small amount of data to get down the fibre to the other end and receive an acknowledgement. To replicate databases around the country needs low latency and the mere availability of fibre will not solve that problem, he says.

Wanted: 'Statisticians on steroids'

More complex strategic analysis of data requires new skills, panellists agreed and these are in short supply on today's market. Such people are often called "data miners", but "data scientist" is an increasingly widely advertised term. They are likely to have closer associations with the line management of the organisation than with the IT department. Patton describes such a person as "a statistician on steroids". Such people are rare and there will be a substantial learning curve for New Zealand to cultivate such skills, panellists said.

In the rush to exploit new data flows, a company's responsibility as the custodian of its customers' data should not be forgotten, panellists and attendees agreed. There are potential negative effects from use of data in a way that fails to take customer sensitivity into account.

An extreme example (reported in the New York Times) was of the Target retail chain which attempted to predict from customers' buying patterns those who were likely to be or planning to become pregnant and sending them "appropriate" promotional material. When such material went to a 15-year-old, her father protested angrily. Target's analysis turned out to be right; she was pregnant; but it still didn't make for a happy customer.

More commonly, a company will have to consider the impact of tactics such as using a customer's praise for a product to pitch to all their social-media "friends".

This too, while technology makes it possible, may not be a good commercial move. Panellist David Wasley of Trade Me, says his company cannot be as cavalier with its customer data as, say, Facebook is, because many of its customers are regulars and all are New Zealand-based. "We have to care about our users," he says.

Committing money to a transaction with an unknown seller or buyer requires trust in the platform. "It's worth it to us to take care to retain that trust."

The Auckland panel, meanwhile, discussed possible business uses for the 100 Mbps downlink speeds which are promised by the UFB initiative.

Among other uses, UFB would allow business to communicate in a more "human way" through video telephony, according to the panellists.

"Right now video communication is very fly on the wall. Business can leverage greater speeds to change the dynamic of conversations with customers," says Andrew Crabb, business and government director at TelstraClear.

Crabb points out New Zealand business are isolated by distance to international markets, but says this barrier can be overcome using UFB technology. "If you want to do business internationally, you need to be able to communicate on their level. People expect to be able to video call you, and it reflects on your organisation if you can't."

Crabb says he sees UFB being of particular use in teaching and health where resource or skill poor areas can teleconference with experts from major centres over low-latency connections.

Customer service is often a differentiating factor for consumers when choosing a service. Steve Matheson, director of Datacom, says as video consumption and the use of video tools become more popular for consumers, companies will begin investing in video communication tools in their call centres to make calls more engaging.

"Engaging with them [customers] over video creates a more human and dynamic experience. You can relate to people and understand them through their facial language, something you can't over the phone," says Matheson.

When asked whether the limited range of data caps in the New Zealand market would hamper the uptake of multimedia communication in businesses, Gen-i CEO Chris Quin defended the practice.

"Datacaps get a lot of media attention. Essentially datacaps are a pricing methodology to let users control their costs," says Quin.

Quin says telcos are unfairly picked on for data caps when tiered service models are common across the ICT industry.

"It's interesting that with infrastructure-as-a-service and storage there is no all you can eat. You consume more you pay more. Yet when you turn to networks or telcos, the principle doesn't seem to be applied in the same way," says Quin.

Both Quin and Crabb agree greater transparency is required on data charges, including international data prices.


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