This week’s technology news – 19th September 2014

Heavyweight US auditors report glaring holes in US healthcare website security
It will come as no surprise that a government website is a leviathan and complex structure, often leaving much to be desired from a user friendly point of view.  However, one will always hope and demand that such a public body website is at least safe to use.

This was not the case, as the Government Accountability Office found with, run by “CMS” (Centers for Medicare & Medicaid Services) in the US.  “Technical controls protecting the confidentiality, integrity and availability” of data, were found to be lacking.  In particular, they identified the operator’s failure to enforce strong passwords, implement software patches and properly configure the administrative network for the “Federally Facilitated Marketplace” (FFM) – this being the area where US citizens buy their health insurance.   Whether or not the end user dislikes eight or more character passwords, it remains a base necessity, until tighter personal verification procedures are deployed like biometrics eye, fingerprint or vein scanners as we have documented recently.

With more than $500m spent to date on the site’s construction however, public sympathy will be hard to find.  At its core, secure network connectivity, authentication procedures and threat and vulnerability management must form the base strategy of any good governance plan going forwards.  Public sector bodies, like many large and long established organisations, whichever side of the Pond, are often burdened by complex legacy systems (in this case backend integration connects the federal site to federal agencies, state governments and insurance companies). So, a central part of any security review should seek to work towards simplification of the IT infrastructure to make it more manageable in future, rather than just adding more sticking plasters and spending on quick fixes vs a long term solution of commercially construed investment and the chance to regain trust with its public.

KPMG id’s the most disruptive IT trends
In KPMG’s Global Technology Innovation survey of 768 technology business leaders, respondents reviewed disruptive trends across technology and identified the Internet of Things (IoT), 3D printing and biotech (healthcare IT), as the top three most likely to impact on the way people work and live over the next three years.  This is more than double the number of responses to these topics in KPMG’s 2013 survey.

Other technologies identified as most likely to transform enterprise included: mobile, cloud computing, big data analytics, digital currencies, artificial intelligence and autotech.

ABI Research in New York estimate that there will be 40 billion active wireless-connected devices by 2020, more than double the present number.  ABI Research also predict that this explosion will be driven by IoT (Gartner estimated that IoT would drive increased installation to a lower figure of 26 billion units).

It is the risk factor associated with disruptive technologies that is challenging swifter adoption by businesses.  However, analysts anticipate that those companies prepared to gamble will be the ultimate winners.  Business leaders in the survey believed that so-called ‘intelligent shopping’ has the greatest potential to generate revenue because of IoT (20%) – as devices communicate with each other. Respondents also suggest home automation (14%), and surveillance/security and social interaction (12% respectively), will also act as revenue drivers in the next three years.

Digital currency Bitcoin, was also identified as one of the emerging technologies most likely to impact on business between now and 2017. However, geography played a massive part in differentiating countries anticipation of wider exploitation of this method of payment:

 Europe (32%)    America (15%)    China (70%)

Counterpoints to advances will always exist and those cited most commonly as likely to limit or constrain innovation were :
• Restrictive regulatory policies – 34%
• “Consumer fatigue” – 29%
• ROI – 27%
• Security – 27%
• Technology complexity – 22%
• Customer adoption – 21%

Rome was not built in a day, but the end user has come a long way and fast in technology.  With such a crowded marketplace, official standards will be required with the IoT (see 4th July 2014 blog) and growth and opportunity for MSPs and providers will come through intelligent mapping and strategy, with the winners including good governance in their plans.

UK No. 3 in world connectivity rankings but can we stay at the top?

Fast and reliable internet connectivity has long since moved from being a luxury to an absolute necessity. Being able to connect instantly to customers, providers and partners is vital in today’s economy.

A newly released study from major Asia telecoms manufacturer Huawei, has ranked countries by score on internet connectivity. This is not just wired broadband connections, but access to high speed mobile internet on smartphones. From these scores, the UK has been ranked third  worldwide, just behind the USA with Germany taking the top spot.

Specific industry sectors are driving the growth of connectivity more than others including; finance, education, oil and gas and manufacturing.   The impact of better internet connectivity was also attributed as being directly linked to the GDP growth of each country, varying from 1.4% to 1.9% per capita and Chile and Kenya scoring very highly because of their relative scales of investment in telecoms infrastructure.

Whilst being ranked third worldwide in connectivity is definitely something for the UK to be proud of, we are still faced with the legacy of BT having an unreasonable monopoly still on infrastructure provision. This is different to the slightly more competitive market in Germany and a far more competitive landscape in the US. The effect may be to restrict the wider enablement of businesses long term in being able to compete if we are to count it on a truly nationwide basis vs the continual plugging of high speed connections to our main City hubs.  With faster and more accessible access to high speed internet comes greater opportunity for our country in the future.  We cannot rest on our laurels though; the majority of the UK score comes thanks to its current connectivity, with a smaller portion dedicated to Growth Momentum.  There is still an urgent need for deep investment and a level playing field in both wired and wireless to keep on top of the game – and for that the Government and regulators are the only ones able to change the landscape.

The rise and fall of Smart Phone sales
Many things in the world of technology change at a rapid pace, with fierce competition in development of new, innovating hardware and software enabling new devices to come out of a left field, taking many by surprise. Some trends however stay fixed. Apple announced the iPhone 6 and iPhone 6 Plus last week on schedule, taking no one by surprise. This week Apple announced another pre-order record for both smartphones topping over 4 million pre-orders so far. This yearly event is naturally a big deal for phone networks and retailers, with all taking pre-orders, including independent mobile phone retailer Phones 4u.

This week Phones 4u, despite financial stability and plenty of pre-orders for the iPhone 6 went into administration. This comes from the unexpected news, for Phones 4u at least, that both Vodafone and EE (parent company of both Orange and T-mobile) would not be renewing contracts, preventing Phones 4u to sell subsidised phones on their networks. Earlier this year O2 pulled support, which would have left them only able to sell Virgin mobile contracts.

So why would all the major UK network carriers pull out of what appeared to be a successful partnership? The allure of higher profit margins is likely to be the top reason. Selling phones exclusively direct forgoes splitting profits with an independent. Back when Phones 4u opened shop in 1996, splitting profits made a lot more sense to expand reach and brand awareness.  But the mobile industry is a very different beast today, with the only players left being giants. In addition new strategic partnerships, such as rival Carphone Warehouse and Dixons increasing their already dominant high street presence, made Phones 4u the weaker of the two to attack.

Carphone Warehouse despite its stronger position is likely to be doing its best to secure future contracts on a longer term basis and evaluating alternative strategies just in case. A stronger emphasis on non-network subsidised plans and its own phones services is a better tactic. The closing of Phones 4u will mean less competition and potentially higher prices when buying contracted phones from your network carrier of choice. When you contract is up for renewal, consider buying your phone separate to your phone plan as now more than ever, this will likely be the more sensible route going forwards as the US model is showing.



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