Is 2010 The Year Asia Cuts the Apron Strings?

January 10, 2010
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It has been many years since I last worked in China and a couple of recent announcements led me to wonder what has been going on there recently. When I started to review what I knew about analytics in China I started thinking about Asia in general. Would 2010 be the year we would see an upswell of analytics with a distinctly Asian (as opposed to US) flavour?

What makes Asia Different?

Analytically, it’s both the size of the potential market as well as its fundamental differences from the West that intrigue me. Take a look at the mobile market for example:

Netopop-mobile-web-china-dwarfs-us-mobile-access-april-2009 

So not only is the absolute size greater but 75 per cent of mobile users own web-enabled phones – compared with only 41 per cent in the US

It has been many years since I last worked in China and a couple of recent announcements led me to wonder what has been going on there recently. When I started to review what I knew about analytics in China I started thinking about Asia in general. Would 2010 be the year we would see an upswell of analytics with a distinctly Asian (as opposed to US) flavour?

What makes Asia Different?

Analytically, it’s both the size of the potential market as well as its fundamental differences from the West that intrigue me. Take a look at the mobile market for example:

Netopop-mobile-web-china-dwarfs-us-mobile-access-april-2009 

So not only is the absolute size greater but 75 per cent of mobile users own web-enabled phones – compared with only 41 per cent in the US. This data is care of Netpop Research. China is not alone in the region, IDC estimates that there are over 600 mn fixed line subscribers in Asia Pacific excluding Japan (APEJ) and over 1.6 bn mobile subscribers.

Telco’s in India expect 2010 to see Enterprise Mobility as a hot trend. According to local trade publication Voice&Data:

“Enterprises will be relooking at their entire IT architecture and strategize ways to ensure that the entire workforce – be it blue collar manufacturing employees, gray collar service employees or white collar management employees – is able to leverage and add-on to the intelligence available at the back office.”

In the wired world, 5 of the top 10 most connected countries or territories are in Asia. South Korea led, where 95 percent of homes have broadband. Singapore and Taiwan are among the top five countries in terms of access to high-speed Internet, according to a survey released in 2009 by Boston-based Strategy Analytics.

The United States, where just 60 percent of households had broadband as of last year, ranked 20th in the survey of 58 countries. The firm predicted the broadband subscriber base in the Asia-Pacific region will grow on average by a further 15 percent a year between 2009 and 2013.

Strategy Analytics said South Korea’s highly urbanized population and its government-backed broadband policy accounted for its high rate of broadband penetration.

Singapore ranked second on the list with household broadband penetration of 88 percent, followed by the Netherlands (85 percent), Denmark (82 percent), Taiwan (81 percent), Hong Kong (81 percent), Israel (77 percent), Switzerland (76 percent), Canada (76 percent) and Norway (75 percent).

Among other Asia-Pacific nations, Australia ranked 11th with 72 percent, Japan ranked 16th with 64 percent, New Zealand ranked 25th with 57 percent, China ranked 43rd with 21 percent and Malaysia ranked 44th, also with 21 percent.

Thailand ranked 51st with seven percent, Vietnam ranked 52nd, also with seven percent, the Philippines ranked 53rd with five percent, India ranked 57th with two percent and Indonesia ranked 58th with one percent.

Why Is Asia Important?

Technology spend across Asia excluding Japan is expected to grow strongly in 2010. Singapore-based Springboard Research’s recent Asia-Pacific Predictions 2010 report is predicting 8.8 per cent growth. They put analytics as the #1 trend in 2010:

“Among the hot technologies for this year are analytics solutions that will make use of data and predictive modelling technology to help support business decision-making.”

This prediction is similar, but more optimistic than that from the better-known IDC. They recently predicted that ICT spending in APEJ will reach $184 bn in 2010 with a 7.7% growth over this year. Analytics was their #2 trend for 2010:

“2010, IDC expects business analytics to emerge as a key technology area to help CIOs manage cost, comply with regulations, and most importantly, grow the business as information is treated as a strategic asset within the organization. More advanced and sophisticated forms of analytics solutions, are actively being implemented by organizations in the region.”

IDC goes on to back this prediction up with trend #9:

#9: Intelligent X: Building a smarter and more measurable world

IDC believes that 2010 will be a year of multiple ‘intelligent’ initiatives in Asia, as major governments and cities try to beat each other to reach the goal of securing foreign investment and foreign technology participation in this region. In these ‘intelligent’ initiatives, a new business model is emerging as a ‘Holy Trinity’ consisting of government, ICT vendors, and citizens; all three working in sync is required to make inroads in emerging countries.

From an ANZ perspective, the signing of the Free Trade Agreement between ASEAN, Australia and New Zealand (AANZFTA) in late 2008 should also expand activity as it includes provisions covering trade in services, together with investment, intellectual property, competition policy and economic cooperation.

More personal reasons for why Asia matters include:

  • Large numbers of analytics graduates I meet from Bangalore, Chennai and Shanghai
  • ETL and SQL outsourcing deals between ANZ and Asia
  • Rise of leading BI Vendor centres of excellence in Asia (more on this in my next blog)
  • Expansion of local BI players into South East Asia (and beyond).

In my next blog I will try to summarize what has been happening in analytics in Asia recently. I believe that we will see evidence of Asia coming out of the Global Financial Crisis in a stronger position than when they went in. Analytics in Asia is looking a lot more dynamic these days and many local organisations are not going to pay for the BI suites from the SOMIS (SAP, Oracle, Microsoft, IBM, SAS) vendors when viable local options are around at a fraction of the price.

It’s still too early for Silicon Valley to start worrying – but it may be time to start taking notice of what’s happening to the East of La La Land.

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