Total datacentre market spend is increasing slightly but within that service spend is declining radically. There are declining price points for capacity and it is a very competitive market. Virtualisation is taking a huge amount of spend out of that marketplace. Our figures were that our overall datacentre portfolio grew 35 per cent in NZ, inside of a declining market. That is a great outcome for us.
The biggest growth is coming out of datacentres and cloud-enabling. We had 35 per cent growth there and that's much higher than overall growth right. So the dynamics are changing — datacentres are growing. The communication spend is staying relatively stable. Our portfolio growth is coming out of datacentres.
Q: Do you see that tipping the scale and becoming the dominant part of your business in NZ?
GL: The biggest thing on our horizon is the Internet of Everything stuff. We are in the fourth phase of the internet now. We started off with basic connections. Then we went to ecommerce and started transacting. We had the third phase of the social media, which went into the whole area of personal connections and the internet.
Now we are in the next phase of that growth, which is being driven by our willingness and propensity to connect everything on the planet — plants, animals, appliances, cars, mobile phones — just about everything. The number of connections to the internet is just about growing exponentially.
Think it was in 2009 or 2010 that the number of connected devices surpassed the number of people on the planet. Now we are at about 7 billion people, we have got 15 billion connected devices. We see that growing to 20 billion by 2015. By 2020 we are predicting 50 to 60 billion connected devices. That's being driven by some fundamentals in the tech industry to such an extent that the outcome is almost certain now.
That means having billions of devices connected and being able to make use of it, to ensure that data gets to the right endpoint, often without a human to be involved in that process. That is going to have implications for every industry.
For instance, I think it is going to be fundamental to how we do retain a pre-eminence in agricultural productivity. Connecting up our pastures, our livestock — all of it being connected with telemetry and feeding information back to a location. All that kind of stuff will be done here.
Even on the NZ scale, that is going to be hundreds of millions of devices — how do you get that information connected, how do you get that to a useful connection point. That is going to be a role that I see Cisco playing.
And what do you do from there — the data storage, the analytics, the transmission, the industrial control that goes behind that —I see Cisco having a role in that as well.
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