The Changing Landscape of IT, and Why Businesses Should Care By: Fanele Chester Date: 31st August

2011

The month of August has been fraught with activity in the information and technology sector. From Googles acquisition of Motorola earlier in the month to Steve Jobs resignation as CEO of Apple a couple of days ago, and Hewett-Packards decision to stop making personal computers to focus on software development la IBM in the early nineties, the winds of change are signalling a transformation of the industry. The Google Experience Googles acquisition of Motorola for $12.5 billion was not to add a mobile phone business to their impressive repertoire of acquisitions (102 in 10 years), but to own the 17 500 patents that came with the deal. Google first realised the need to enter the mobile phone industry in 2005 as a means of controlling how customers experience their main product on mobile devices: internet search / web browsing. They achieved this through the acquisition of Android, an operating system (OS) for mobile phones for $50 million. Android was developed to give customers the best mobile Google experience; indeed users of search services such as Google Maps and Gmail reported a better experience on Android-powered phones compared to other competing OS. However, problems surfaced with Android as some of the specifications that were used to enhance the Google mobile experience infringed on intellectual property rights of other companies. Hence, some of the functionalities that came with the Android OS had to be altered. With Motorola, Google gained the invaluable intellectual property muscle they needed through the 17 500 patents. The HP Experience Last week, Hewett-Packards exit from the PC and tablet computer industry came as a surprise to many, but analysts that have been keeping a close eye on the numbers report that this move has been coming for a decade now. Many will recall IBMs similar restructuring in the early 1990s. After running a successful global monopoly of desktops and mainframes, revenues dropped from $13 billion in 1990 to $7 billion in 1993, losses rose to $16 billion and 35 000 employers lost their jobs as the computing world shifted to distributed computing systems such as PCs (mainframes were rented out. A statement released by HP said the company was focusing on higher-margin, strategic priorities of cloud, solutions and software with an emphasis on enterprise, commercial and government markets.

Apples Destructive Innovation There is a unanimous agreement that the restructuring of the IT industry is attributed to one main player: Apple. The technology giant briefly toppled Exxon Mobil Corp. to become the United States most valuable company last month. In other words, the iPad became more valuable than oil. Competitors in the IT industry took the tip: it was time to restrategize their core operations, or risk being left out. For companies like Google, it suddenly became imperative to control not only the software platforms that run their product, but to be fully involved and integrated in the entire process. Besides, Apples true genius lay not only in the precise and intuitive Mac OS, but in the sleek and sophisticated futuristic if you may design of their products. The Next Experience: Cloud Computing How does all this affect service delivery by businesses in Swaziland? The subtext of all this activity is information. The reach of mobile phones globally, the accent of smart phones and tablet computers, coupled with advances in internet connectivity, means one thing: more people want information, they want it quickly, and from anywhere they happen to be at that particular moment. Business analysts report that every ten years or so, a new dominant platform emerges to elevate computing to another level. First came mainframes. This was followed by distributed systems: mini-computers, personal computers and servers. And now there are mobile devices and computing clouds. The relationship between cloud computing and mobile phones is at the heart why developing, factor-driven economies like Swaziland should be vigilant of developments in the IT industry. Greg Hatfield, from Dimension Data describes cloud computing as intelligence in one location that is delivered over networks on demand. Wilter du Toit, CEO of Virtual Mobile Technologies paraphrases it as shifting data, services and hardware from a companys dedicated data centre onto an external platform that is accessed via the internet. In other words, the more people are connected via the mobile phones and the better mobile broadband there is, the more information they want. Perhaps a more pertinent question is: what opportunities does cloud computing and mobile devices hold for local businesses, especially those who are not in service-based industries? Preliminary suggestions would include better data management and storage for companies as cloud computing allows them to purchase the space and services they need, and scale these up in line with the business expansion. This can be done through cloud computing brokers or agencies, such as Dimension Data. This means businesses would spend less on their IT infrastructure (often a capital cost), freeing up resources that can be used for growth in other parts of the businesses, and turning the capital cost of IT infrastructure into an operating cost that is adjusted according to the needs of the company. However, it is important to note that cloud computing in developing

economies will only be driven by the quality and affordability of mobile internet connectivity. Conclusion As a factor-driven economy, these developments may seem peripheral to local businesses. However, the advent of the information age, thanks to the cataclysmic proliferation of mobile networks and broadband, in both developed and developing economies of the world, is reason enough for Swaziland businesses to sit up and take note.