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EU Cuts Affect Broadband in Europe February 11, 2013

Posted by Mark Hillary in Current Affairs, Government, Internet.
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In recent news, politicians in Europe were seen hammering out a deal for the European Union budget. Though some in Europe were keen to see the budget increased, the leaders of countries including the UK and Germany placed enormous pressure on the decision-makers to cut back – reflecting the general health of the European economy.

And cuts were made. But one area that was hit particularly hard was the funding for rural broadband. The Connecting Europe Facility (CEF) had a target of ensuring that half of Europe’s population could use Internet with a speed of at least 100 megabits per second (Mbps) by 2020, with the rest of the population on at least 30 Mbps.

With people fearing for their jobs and food banks on the rise, broadband access may seem like a first-world problem, but broadband is the basic infrastructure that underpins the entire digital economy and it is not good enough for it to only be available in major cities alone.

We are moving away from the traditional industrial model of the large cities with suburbs and armies of commuters travelling to the office at 9am each morning. Entire business models can be formulated and delivered online alone – and therefore based anywhere, even remote rural areas.

Considering the entire programme that is being cut was really only a few billion euros – contrasted with the banking system bailouts and quantitative easing that are costing hundreds of billions, it would seem to be a good investment in the future. Why cut back on infrastructure that can drive the future of the digital economy?

96 Maison de Fée

Photo by Nebojsa Mladjenovic licensed under Creative Commons

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In uncertain times, what companies want is certainty April 26, 2012

Posted by Mark Hillary in Current Affairs, Outsourcing.
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According to the Office for National Statistics (ONS), the UK is now officially in recession as the economy has contracted for the past two quarters. It is interesting to observe that many leading economists don’t believe the ONS data is correct, but these are the official numbers so we have to deal with what they present to the country.

Back when the present economic slowdown really began in 2007/08, many technology analysts predicted that a slowdown – or full recession – would be a good thing for the industry. If companies wanted to reduce outgoings they would look increasingly to offshore outsourcing as a way to achieve this.

But it never happened, and looking back it was quite obvious really. Any IT outsourcing programme has a lot of expense up front. Transition cost, training cost, consulting cost, auditing cost… there is a lot to budget for meaning that you have to commission a large piece of work, make sure it runs to plan and only once you get to the future business state can you hope to start making savings.

This meant that offshore outsourcing declined during the initial slowdown. It recovered and the market is growing again, but take a look around Europe right now. The UK is now in recession, Spain is about to go back into recession, the Euro currency lurches from one crisis to the next with the continuing reality that not all countries using the Euro now will be doing so at the end of this year.

The Dutch Prime Minister just resigned because his people refuse to adopt an austerity plan and the French are veering towards a new socialist president for similar reasons.

The level of political and economic uncertainty is so great that it would be foolish for any service supplier to still be selling the ‘reduce cost’ model of business. Now if they can start selling outsourcing based on a ‘we can tell you your costs for the next 5 years’ type model then in this present climate I expect there will be a lot more takers.

The last economic slowdown showed how unattractive the simplistic model of slash and burn offshoring really is. If we are heading into deeper economic uncertainty, that approach should not make a comeback.

Recession

Photo by Anders Vindegg licensed under Creative Commons