The New Zealand figures were revealed by the government’s chief statistician, Liz MacPherson, after she was threatened with being held in contempt of Parliament.

Statistics NZ opted for the online survey in 2018. As well as a record low in Kiwi’s filling in the form, there was a doubling in the partial response rate according to National’s State Services spokesperson Nick Smith.

“It is critical that trust and confidence in future censuses are maintained and enhanced.”

According to economic consultants, Berl “…around 480,000 people did not participate in Census 2018. Given the estimated population at the time was 4.88 million, this equates to 10 per cent of the population. To provide some further context, the 480,000 people is around the same size as the entire Waikato Region.”

The scale of the abnormally low 2018 census turnout led much hair pulling and shouting in parliament. The government agreed to appoint a team to conduct an independent review of what went wrong. According to Stats NZ, the review will be undertaken by management consultant, Murray Jack, and a Canadian census expert, Connie Graziadei. Findings from the review are expected to be released in July.

According to the terms and references of the review “the Government statistician is seeking robust independent advice on the 2018 Census, with a focus on understanding what factors contributed to the lower than expected participation rate, so that future censuses and other household surveys can be as effective as possible. Stats NZ is a learning organisation. It holds itself and the way it delivers official statistics to a high standard. Given the importance of the census and the role it plays in informing decisions that affect the lives of New Zealanders, it is critical that trust and confidence in future censuses are maintained and enhanced.”

New Zealand’s census predicament is not unique. In Australia, the 2016 Online Census was marred by the Australian Bureau of Statistics taking the Census website down after what it said was a series of denial of service attacks followed by a hardware failure that led to a misidentification of a larger denial of service attempt.

The political fallout was predictably swift. The then Australian prime minister, Malcolm Turnbull, lashed out at IBM (who had won the contract to host the census in 2014) and the Australian Bureau of Statistics, saying “There has clearly been a failure in the work that was done” and that “My prediction is that there will be some very serious consequences to this”. Shortly afterwards, the Australian government appointed Alastair MacGibbon, the Australian Prime Minister’s Special Advisor on Cyber Security, to conduct a review of the failed census.

The MacGibbon team included senior members from what read like an A-Z of Australian Government Departments. These included the Prime Minister’s office, the Australian Signals Directorate (ASD), the Australian Information Commissioner, the Australian Department of Finance, the Treasury, the Australian Digital Transformation Office and the Attorney-General’s Department plus a liaison officer from the Australian Bureau of Statistics.

The Australian Signals Directorate later confirmed that no data was compromised.

According to the findings of the review “the ABS severely underutilised social media as a communications tool to keep the public up to date and informed of the incident. The ABS’s lack of timely and transparent communications lost it trust because it opened the door to speculation. The continued slow updates and virtual absence from the media meant that ABS struggled to win back the trust of the public in the following days. Ministers must also be supported with clear and accurate advice, and senior executives must be equipped to understand and talk about cyber security as a matter of business risk.”

The rationale for a government to switch to a digital census appears compelling. Not only is it a considerably less costly to undertake than printing and mailing census forms to New Zealand households, but online digital forms can also be simpler to complete in that they can warn of missed or incorrectly answered questions and provide more predefined answers than a printed form. An all-digital census should, in theory, also be a significantly faster operation for statisticians.

As is so often the case, reality proves far more complicated than theory. In a blog commenting on lower than expected turnouts for the 2018 census, New Zealand’s 20/20 Trust, which promotes digital inclusivity, identified several issues that hindered response rates. These included the census not being properly accessible (with difficulties in obtaining a paper census form for those unable to get online) and a lack of briefing to helpdesk staff, who 20/20 also says were inexperienced, compounded issues. The 20/20 Trust also note that the online census FAQ was “fairly superficial”.

Perhaps most critically of all, there was too much emphasis on ‘Digital First’ – it was difficult to get paper forms, and the different user experience of paper forms versus their online counterparts was also not fully appreciated.

The pre-set answers alienated some groups, and many had concerns about privacy. Last but by no means least, testing was fragmented, not ‘whole process’ and didn’t include all the right groups.

The biggest test of an online census is about to happen. In 2020, the US census gets underway and goes digital. Armies of volunteers armed with iPhones will descend on US households to gather census data. There are good reasons for the move to a digital census. Costing US$12 billion, the 2010 census was the most expensive in US history.

Given the mixed track record of online census taking to date, experts are understandably worried that the US Bureau of Statistics could leave itself exposed to numerous new risks, including technology failures and cybersecurity issues.

Meanwhile, New Zealand awaits the findings from the census review team. Watch this space.

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Uber’s line up of investors consists of Toyota Motor Company, Jeff Bezos, Fidelity Investments, SoftBank and Tencent Music. As of October 2018, Uber was funded by more than 96 corporate and private investors, raising over US$22 billion from its capital ventures and investors. Based on this, Uber can claim to be the number-one rated unicorn (a private company valued at over $1 billion) globally.

While Uber has long released partial financial results, the IPO filing provides the first comprehensive look at their numbers and operations. Investors want detail, especially as many already have rival, Lyft’s, March IPO filing as a reference to benchmark Uber’s value. Comparisons between both companies are inevitable, and prospective investors will be keen to break out Uber’s US ride-hailing numbers from global figures as Lyft only operates in North America.

Once floated, Uber will be under considerable pressure to achieve profitability.

Uber disclosed $50 billion in gross bookings last year, up an estimated 45 percent from similar figures in 2017. Ubers data also showed slowing revenues. Of the $11.4 billion revenue reported for 2018, $3 billion were generated in the last three months of the year, up 2 percent from the previous quarter. While that number translates into year-on-year quarterly growth of 25 percent —it fell short of the 38 percent rate recorded in last years third quarter.

In 2017, Uber ran at a loss. It recorded a US$0.8 billion loss in Q1, a US$1.1 billion loss in Q2, a US$1.5 billion loss in Q3 and a $1.1 billion loss for Q4. During the first quarter of 2018, Uber turned a profit of US$2.5 billion which was mainly due to deals made throughout southeast Asia and Russia. The second quarter again revealed a loss of $0.9 billion. Uber CEO, Dara Khosrowshahi, said that Uber would take short-term losses to achieve their long-term growth goals.

Understandably curious Investors are seeking explanations for Uber’s slowing trajectory, and some speculate that these numbers as a sign that Uber’s core ride-sharing business may be stalling. Investors are also likely to want to know what line of business the money is coming from as Uber expands into other sectors including food and package delivery plus e-scooters and e-bicycles, plus Uber has also said that they are looking into driverless vehicles and flying taxis. Uber’s last public valuation was US$76 billion and happened when Toyota invested in Uber in 2018. Further details on the number of shares to be offered and their price are not likely to be known until a later filing.

The multi-billion dollar question now is how attractive Uber will be to investors?

The company is not without its challenges. While Uber’s 2018 revenues were a 42 percent jump over the previous year, their operating losses are significant. The filing shows loses of US$1.8 billion for 2018. While this represents a considerable improvement over the US$4.1 billion losses recorded in 2017, Uber is still prioritising growth over profit.

Much of the speculation around these numbers attribute the losses to competition from Lyft which saw a price war in the US/Canadian ride sharing space, while increasing competition slowed growth in the food delivery space. This is particularly evident with current user numbers. Uber recorded 91 million active users as of the end of 2018, up 23 million on the previous year. Revenue, however, almost halved in 2018.

Further adding to Uber’s US woes was the loss of ‘hundreds of thousands’ of customers in January 2017, following the #DeleteUber backlash against the company after it lifted surge pricing around JFK International during a New York Taxi Workers strike. The strike was in support of protests at US airports over Trump’s immigration policies and the condemnation against Uber was swift.

Uber’s problems extend beyond the US. The company suspended activities in Bulgaria in 2015 after protests and a threatened strike by Bulgarian taxi operators who said Uber practised ‘unfair trade practices’ as Uber drivers operated without taxi licences or any defined legal status. Following an investigation by authorities, Bulgaria’s competition commission fined Uber €50,000 for unfair competition and the Bulgarian supreme court banned the company. Recently passed legislation in Bulgaria requires taxi services to be provided by licensed carriers with qualified drivers on formal contracts.

Uber also exited the Danish market, where it had more than 300,000 customers, in 2017 when fare meters and seat occupancy sensors were mandated for all vehicles operating as a taxi. In Italy, complaints and a six-day strike by the Italian taxi associations saw the Italian courts blocking the Uber app in 2017. A subsequent appeal lifted the ban but only for the company’s Uber Black service, which uses licensed taxi drivers.

The numerous challenges facing Uber will not end there either.

Once floated, Uber will be under considerable pressure to achieve profitability. Industry speculators say that this could force a sea-change within Uber. That said, over the short-term, Uber is likely to see investing in growing user numbers as a priority.

Based on their previous behaviour they are likely to seek to use promotions, incentives, and aggressive discounts. In 2018 over US$3 billion – a third of their total operating costs – was spent on sales and marketing. A continued focus on growth could also see Uber investing in new markets and operations while they continue to underwrite ‘flying taxi’ as well as autonomous vehicle research. All of which raises the question of whether price hikes will be part of a post-IPO Uber?

Uber also faces regulatory challenges. Their business model is reliant on low-cost driver contractors. If regulators rule that Uber drivers are not contractors, but in fact employees (who would then be entitled to benefits and protection via minimum wage laws) losses could grow. In the Uber filing, Uber notes that over 60,000 drivers expressed interest in arbitration over employee misclassification. It says the outcome of this “could result in significant costs”.

Given the hype surrounding Uber’s IPO and investor behaviour around Lyft’s recent float, it is probable that potential investors will be unfazed by Uber’s losses. Lyft lost $911 million in 2018, yet investors valued the company well above its last private valuation. Morgan Stanley Goldman Sachs says Uber could be valued up to $120 billion when it lists, over US$50 billion more than initially anticipated. Uber could surpass Facebook (US$104 billion in 2012) and Google (US$23 billion in 2004). But the company still has a long way to go to reach Amazon and Apple, both of whom achieved trillion-dollar valuations.

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A case in point is Google subsidiary, Wing. They’re trialling a drone delivery service, much to the dismay of residents Bonython, a suburb of Canberra.

While the drones can deliver a hot cup of coffee mere minutes after it gets ordered, locals living under the drone’s flight path say Wing is making their lives miserable as the noise produced by drones flying over makes relaxing in their own homes impossible.

Operators such as Wing are going to struggle to gain public acceptance if they get seen as an annoyance or intrusion by every household they fly over.

So how noisy are these drones? As almost anyone who has spent time near a drone can attest, they are not quiet. Most sound a like an electric weed eater colliding with a hive filled with angry killer bees. Most of the promotional videos of drone delivery services make liberal use of musical backing tracks to drown out the high-pitched scream of drones in action.

To better understand the true problem, watch the video below (with the sound up):

Privacy concerns and stories of drones used as online peeping toms also means many are wary of uninvited drones flying over properties.

Wing’s parent, Alphabet, has said they will tweak the Wing delivery drone sound levels by reducing flight speeds and changing routes. Alphabet says that means their drones will not only run quieter but they will also not pass over the same addresses regularly, ensuring there is less likelihood of them being an ongoing annoyance.

Complaints out of Canberra are not the first, nor are they likely to be the last examples of communities taking issue with Silicon Valley corporates.

When discussing bumpy community relationships and Silicon Valley companies, Amazon is a name that repeatedly crops up. In the US, Amazon has sought out cities and counties to house their fulfilment centres where goods are packed and shipped to customers. Amazon says they created 40,000 full-time jobs, yet the Economic Policy Institute contradicts this in a report that says that counties with Amazon fulfilment centres are not seeing a sizeable boost to their local economies.

The Economic Policy Institute argues that local governments in communities are giving away large sums of money as tax credits, exemptions and infrastructure assistance to Amazon but are not seeing significant benefits as jobs created are offset by jobs lost in areas such as retailing which is contracting due to the growth in online shopping.

Adding insult to injury, working conditions also appear to nosedive in areas where Amazon sets up shop. A UK undercover investigation found that Amazon warehouse employees took to urinating in bottles so that they did not miss strict time targets. When the investigation went public, other Amazon employees came forward to tell similar stories, saying there was no time for bathroom breaks, or even speaking to co-workers. Reports in the New York Post surfaced of Amazon Drivers using vans as improvised toilets, in order to meet delivery targets. In many states were Amazon operate, wealth is not flowing back into communities. In some US states, up to one in three Amazon workers need food stamps as wages are not enough to keep them above the poverty line.

While the impact of Wing’s drone trials is nowhere near as dire or far-reaching as Amazon’s operations, complaints are still flying thick and fast out of Canberra.

Drone delivery services are a perennial tech media topic, and most have yet to eventuate. While big players like Uber Eats have said they are keen to launch a drone delivery service by 2021, many vendors are still grappling with a multitude of issues surrounding drone deliveries.

Perhaps the most significant issues centre around safety and security. Many drones are easy to hack and this, says cyber-security experts, could see drones taken over by malicious actors. Wings delivery drones are able to fly at 120kph at altitude, so the potential for injury (or spilt coffee) is real. Rather than hacking a drone to crash, experts also speculate that hackers would most likely seek to hack a drone and steal the payload the drone was delivering (the lengths people will go to for a good cup of coffee is amazing!).

In countries like Australia or New Zealand with unpredictable weather, strong winds or torrential rain is another risk that could see delivery failures being an issue as drones getting blown off course or crashing. Privacy is also a big issue. Few members of the public are crazy about camera-equipped drones flying over their properties. How companies such as Wing manage this remains to be seen, but a lack of regulatory oversight in different countries could see this issue being a contentious issue for some time.

If the demo videos are any indication, noise is the big challenge. One thing is abundantly clear, drone delivery operators such as Wing are going to struggle to gain public acceptance if they get seen as an annoyance or intrusion by every household they fly over.

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Now, it turns out that a similar bug is about to strike GPS systems, in just 20 or so days.

On April 6, equipment using older GPS technology (and the emphasis here is on ‘older’ – if devices have been getting regular updates, they should be OK) could get hit with what experts are calling a “Week Number Rollover” issue. They say that this could reset GPS receivers, possibly corrupting location data. Given how reliant humanity has become on the global positioning system, the potential for trouble, for those using the old devices, looks significant.

As outages become a part of our daily lives, it is becoming abundantly clear that more and more of our lives are becoming dependent on vast and unknowable server networks.

Older GPS receivers count weeks using a 10-bit field that maxes out at 1024 weeks, or 19.7 years. These 19.7-year periods are called epochs. The first epoch kicked off when GPS launched in early 1980. On August 21, 1999 GPS receivers reset back to zero. While there was no noticeable disruption, experts say that this was because GPS was not widely used. Next date? April 6, 2019.

Now cybersecurity experts are saying that sheer penetration of GPS in our society could result in the April 6 epoch reset leading to disruptions. In an interview last week, vice president of cybersecurity firm Trend Micro, Bill Malik, went as far as to say he wouldn’t risk flying on April 6, when the week count resets.

For many, a more imminent fear of flying stems from Boeing’s recent failures on its now grounded 737 MAX where it appears faulty sensors have contributed to two of the planes falling from the sky.

The question is have we reached a point where we are putting too much trust in technology?

Another potent illustration of this happened in mid-2017 when a particularly ugly tech wreck reared its head. After a power surge at its Heathrow data centre, British Airways’ IT system fell over, leaving tens of thousands of passengers and their baggage stranded. Part of the problem with this outage was the sheer level of inter-dependency. The power spike caused a chain reaction which took out BA’s entire computer systems. It took 48 hours to restore systems so the airline could recommence flights.

Critics argued that BA should have had (and tested) a backup system and a disaster recovery plan. IT staff and their unions blamed cost-cutting at the airline and outsourcing to India.

Perhaps a less severe but still frustrating example was the recent outage that rendered Gmail, Google Drive and other Google services inoperable around the world, which rippled to (clearly mission critical) Instagram, and coincided with an outage at similarly mission critical Facebook.

Thousands of irate users globally lodged outage reports and complaints ranging from not being able to use Google Docs through to email outages that affected business operations.

Our lives are becoming dependent on vast and unknowable server networks, much of which is often hosted in data centres outside of New Zealand, owned and operated by mega corporations such as Amazon and Microsoft.

The creep of computerisation has seen tech becoming an essential part of virtually all industries as digital technologies such as data analytics, automated logistics and databases help transform industry to become significantly more efficient. Tech has made much of our lives better in many ways. Tedious, complicated and time-consuming chores such as booking flights or banking have become ever more easier, to the greater good of society.

However, with this ease comes a dark side. Humanity is beginning to realise how helpless it is when technology fails.

In the UK, doctors found their computers frozen thanks to a ransomware attack that saw them turning patients away. In the recent Christchurch mosque attacks, ISPs and social media networks watched helplessly as horrific live video footage proliferated faster than networks could detect and remove it.

According to the recent Global Navigation Space Systems: Reliance and Vulnerabilities report from the royal academy of engineering, our over-reliance on GPS technologies could see us particularly exposed to GPS outages.

“Society may already be dangerously over-reliant on satellite radio navigation systems like GPS [given that the] range of applications using the technology is now so broad that, without adequate independent backup, signal failure or interference could potentially affect safety systems and other critical parts of the economy,” the report warns.

Nowadays GPS is a technology that is part and parcel of many industries ranging from air travel through to emergency services, utilities, financial systems and supply chains.

“The effects would be more widespread (this time) because so many more systems have integrated GPS into their operations…Ports load and unload containers automatically, using GPS to guide the cranes … Public-safety systems incorporate GPS systems, as do traffic-monitoring systems for bridges. Twenty years ago, these links were primitive. Now they are embedded. So, any impact now will be substantially greater,” says Malik.

So, just how seriously are governments taking the week rollover issue? The US Department of Homeland Security issued a memo which says GPS receivers running the latest IS-GPS-200 standard and connected to UTC shouldn’t be adversely affected. They were followed by the New Zealand Measurement Standards Laboratory and the Australian Signals Directorate who both released explainers, recommending that businesses contact GPS equipment manufacturers.

Consumer GPS navigation hardware maker, TomTom says they have already deployed a firmware fix, saying that “if you frequently update your device there’s no need to worry”.

Unless installed systems are connected to a network, as is the case for many automobile and marine systems, those updates will not have happened.

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The arguments for cloud database or database-as-a-service (DBaaS) are many, but most boil down to the usual cloud app arguments of flexibility and the fact that the on-demand nature of the cloud can free organisations to focus on their core business while a service provider manages the underlying infrastructure. In short, providing easy access to databases with minimal administration costs is pushing many organisations to move increasingly sizeable on-premise database workloads into the cloud.

According to Orbis Research, demand is growing strongly for DBaaS offerings. Orbis says the emerging cloud database and DBaaS industry had been relatively flat at around 14 percent growth up to 2017. 2018 saw rapid growth in the technology and Orbis is now forecasting that over the next five years, demand for cloud database services will see the DBaaS market surge, with a CAGR over 59 percent.

Two key factors are driving DBaaS growth: Ease of deployment and scalability.

Orbis and most other market analysts tend to agree that two key factors are driving DBaaS growth. These are ease of deployment and scalability. While the debate around DBaaS market inhibitors is robust, the prevailing consensus is that both disaster recovery and security are the key market inhibitor issues for DBaaS.

While medium and small enterprises have been quick to embrace DBaaS, the rapid recent growth is being driven by the large enterprise segment. The fastest growing region for DBaaS has been the Asia Pacific.

Businesses already awash with data are best placed to realise the benefits of DBaaS, but DBaaS isn’t just benefitting enterprises wanting to contain costs. Medium to small business can also realise significant benefits from lower entry barriers and access to technologies that were previously only within reach of their enterprise counterparts. For companies looking to get into the Internet of Things (IoT), data streaming and machine learning (ML), DBaaS offers compelling reasons to leap.

It isn’t all roses though and there are just as many cons as there are pros with DBaaS. Those negatives can include the general rigidity of databases, integration inflexibilities, networking issues and the complexity that comes with managing large data transfers which, let’s face it, are a white-knuckle moment for most CIOs. Because of these and related issues, multi-site data migration requires security precautions.

Further adding to existing complexities is choosing from the many service providers. These range from cloud database specialists, with solutions which have been built for cloud, through to those which are architecturally more akin to remote hosting of your standard on-premise database server. Finding which is the best fit requires navigating and weighing up a long list of variables ranging from price, geography, support/SLA’s and database specs.

US-based Snowflake is arguably the most advanced in ‘pure-play’ DBaaS. The company has built cloud database technology wrapped with data warehouse tooling as a service offering. It saw that conventional data warehouses were struggling to keep up with the exploding demand for data-driven insight within businesses, and were often complex, costly and lacking in flexibility. While there were other ‘big data’ platforms, most lacked flexibility, and many were often toolkits rather than a complete solution. At a practical level, this meant that they required a significant investment in resources to build and maintain. Taking all this into account, Snowflake built a new SQL data warehouse designed to be legacy free and to deliver greater flexibility in a full cloud setting.

Developed as a cloud-based service from the ground up, Snowflake has focused on a platform designed so people could concentrate on deriving insight from data instead of configuring, tuning, and tweaking a data warehouse.

Another fast-moving player in the DBaaS market is MongoDB. It was developed as a low-cost database platform designed with open source software developers in mind instead of database architects.

What makes MongoDB unique is that it provides more flexibility and agility in software development. Traditional databases require users to design a schema in advance. Any changes to that can be challenging to implement. MongoDB allows users to add different data fields relatively easily even after the fact, as it is an unstructured database. Most important of all, MongoDB’s unstructured design lessens the need for costly database administrators. MongoDB products include cloud offerings such as MongoDB Atlas and their serverless platform MongoDB Stitch, both of which has seen MongoDB develop a presence in the DBaaS market.

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As part of a global benchmarking study, consultancy firm Arthur D Little identified Australia as a global leader in terms of its implementation of 5G networks. New Zealand, meanwhile, rated as a follower.

The 5G Country Leadership Index benchmarked 40 countries and found South Korea (who have already installed over 10,000 5G cell sites) to be the world leader in 5G. The US, Australia, Qatar, Finland and Switzerland followed.

“Leaders in the study already have 5G spectrum allocated, backhaul in place and have either launched 5G or are trialling it.”

The Index consisted of analysis of technical infrastructure and 5G commercialisation. The leaders identified in the study already have 5G spectrum allocated, backhaul in place and have either launched 5G or are trialling it.

So how big is the 5G gap between Australia and New Zealand?

At the end of 2018, 5G spectrum auctions concluded in Australia. Four companies won 5G spectrum in the 3.6 GHz band. All 350 spectrum slots were sold, earning the Australian government an estimated AU$853 million.

Spectrum winners included Dense Air Australia who scored 29 spectrum lots for AU$18.5 million. Mobile JV, which is a joint venture between TPG Telecom and Vodafone Hutchison Australia took out 131 spectrum lots for AU$263.3 million. Optus garnered 47 spectrum lots valued at AU$185.1 million, while Telstra won the lion’s share, with 143 spectrum lots purchased for AU$386 million.

New Zealand, by comparison, has yet to get any spectrum onto the 5G starting blocks.

Kris Faafoi, the Minister of Broadcasting, Communications and Digital media only recently announced the availability of the 3.5 GHz band spectrum for 5G and its auction in 2020 – two years after Australia.

While Kiwi telcos gear up for 5G, Optus is already there. They have begun to invite customers in selected 5G coverage areas to take up 5G fixed wireless broadband plans. By talking up unlimited data and a minimum throughput of 50Mbps, it is likely that many will see Optus’s 5G plans as a viable NBN alternative. Optus says that their first 5G mobile services will go live in the first half of 2019.

Telstra has yet to confirm when or if they will offer 5G fixed wireless broadband, but the prevailing wisdom is that it is highly likely. Speculation got helped when Telstra unveiled their first 5G modem in December and their 5G network is already going live within selected areas of Australia. Optus promise 1,200 5G cell sites across five Australian states by 2020. Vodafone has indicated that they will follow Optus and Telstra, switching on their 5G network in 2020.

While the move to bar Huawei from Australian 5G builds seems to not have affected Australia’s 5G roll-out, some are questioning the security motives underpinning the ban.

Fears of Chinese state-sponsored spying saw Huawei banned, and that same sentiment could see equipment from other Chinese suppliers also barred from Australia’s 5G supply chain. The reality, however, is that removing all Chinese networking gear from Australian 5G installations is close to impossible.

The United States 2018 Report to Congress submitted by the US-China Economic and Security Review Commission echoes this point. “US firms and the US government rely on global supply chains that in many cases are dominated by China. While not all products designed, manufactured or assembled in China are inherently risky, the US government lacks essential tools to conduct rigorous supply chain risk assessments.”

If the US cannot be confident its 5G network is secure from perceived Chinese security risks – even if they use gear made in the USA – how can other countries including Australia and New Zealand be confident their 5G networks are secure?

Huawei controversy aside, all things 5G related seem to be progressing at a significantly slower pace in New Zealand. The incumbent telco, Spark, launched a 5G innovations lab in 2018 and has conducted several 5G demonstrations. According to a discussion document from the telco, it is currently in the preparation phase which involves ‘densifying’ cell sites for 5G coverage.

Assuming spectrum auctions go smoothly, all three Kiwi mobile operators expect to go live with a 5G offering in mid to late 2020 at the earliest. The pressure is on for Spark which has plans for a full 5G immersion experience for the Americas Cup sailing regatta, in March 2021.

So, what will 5G look like in New Zealand?

It is probable that 5G will be held back by variants of 4.5G. Sweating existing infrastructure to offer faster data speeds makes much economic sense given players such as Spark had already invested heavily in 4.5G which is also in theory capable of gigabit mobile data speeds.

Beyond 4.5G, the first real 5G offerings are expected to consist of 5G fixed wireless broadband. For all three mobile operators, the economics are likely to prove compelling. Presently, retail arrangements mean they must hand over a chunk of fibre sales margins to wholesale provider Chorus. Using 5G would allow them to bypass Chorus and retain all the margin, making a 5G fixed wireless broadband offering a much more profitable option.

Another big issue is devices. The handsets for 5G are still relatively rare, with only Samsung set to launch the 5G capable Galaxy S10 in New Zealand in the foreseeable future. Huawei, Oppo and several other vendors all announced 5G capable smartphones, but these are unlikely to reach New Zealand until mid-2019 at the earliest. With 5G having already delivered close to 9Gbps, existing mobile data plans are also unlikely to be practical. Building plans with enough data (or even unlimited data) will require a delicate balancing act for telcos seeking a return on investment.

The internet of things is another attractive market for telcos. The big appeal with IoT is that 5G is significantly more scalable than 4G in the machine-to-machine space, meaning it can scale to handle data beamed from thousands, or even millions, of devices. While speed is not expected to be a consideration, 5G’s promised low latency could be a point of difference in specific IOT applications. A key hurdle for telcos will be the existing four IoT networks already in place. Seeking a return on investment in the IoT space when there is already plenty of designed-for-IoT network capacity could prove challenging.

For telcos such as Spark with system integrator capabilities, the low latency and high bandwidth capabilities of 5G could also prove compelling. At the recent Mobile World Congress, Huawei demonstrated thin client video game consoles whose purpose was to stream games rendered in the cloud. Given the near real-time requirements of gaming, it is fair to assume that thin client computing and enterprise cloud applications over 5G could also be on the cards.

The post Kiwis lag behind Aussies with 5G appeared first on iStart keeping business informed on technology.

China’s flagship telco company has been thrown into the epicentre of the trade dispute with the arrest of Meng Wanzhou, Huawei’s CFO in Canada, while Washington also accused Huawei of breaking sanctions and intellectual property theft, along with allegations that Huawei assists Chinese state espionage operations.

“Prism, prism on the wall. Who’s the most trustworthy of them all?”

At a media round table at the MWC (#MWC19) in Barcelona, Huawei chairman Guo Ping agreed and expanded on a recent Trump tweet, saying “I have noticed the president’s Twitter. He said that the US needs faster and smarter 5G or even 6G in the future, and he has realised that the US is lagging in this respect, and I think his message is clear and correct.”

In his keynote speech Ping also re-stated Huawei’s commitment to security saying “let me say this as clearly as possible: Huawei has not and will never plant backdoors. And we will never allow anyone to do so in our equipment. We take this responsibility very seriously.”

Taking aim directly at the US, Ping said “Huawei has had a strong track record in security for three decades, serving three billion people around the world. The US security accusation on our 5G has no evidence, nothing”.

Injecting a note of humour in his delivery, Ping also countered with “Prism, prism on the wall. Who’s the most trustworthy of them all? It’s an important question to ask. And if you don’t understand this question, go ask Edward Snowden.”

The debate was further fuelled by comments last week from US Secretary of State Mike Pompeo who said the Chinese telecom giant threatens the ability for Europe to work alongside the United States.

“If a country adopts this [Huawei technology] and puts it in some of their critical information systems, we won’t be able to share information with them,” Pompeo said to FOX Business’ (no less) in a live interview on Thursday. “In some cases there’s risk – we won’t even be able to co-locate American resources, an American embassy and American military outpost.”

Pompeo added that Huawei technology also presents security risks to Europeans.

“We can’t forget these systems were designed with the express work alongside the Chinese PLA, their military in China,” he said. “The risk to privacy from this technology is very, very real.”

He also extended the warnings to other countries, confirming the diplomatic pressure that is being placed on New Zealand and UK governments.

“Over the past months we’ve been out around the world just making sure everyone had the same information, that countries understand the risk of putting this Huawei technology into their IT systems.”

Has a more high profile business-political spat ever reached such lows?

Trump’s tweets however do appear to have softened on the US/China trade dispute, with his latest splutterings being seen as signalling a departure from the hardline US position that Huawei should be barred from Western networks.

Trump original tweet said: “I want 5G, and even 6G, technology in the United States as soon as possible. It is far more powerful, faster and smarter than the current standard. American companies must step up their efforts, or get left behind. There is no reason that we should be lagging on something that is so obviously the future.”

While 6G may count as a classic Trumpism (along with covfefe and so many others), his tweets – for a change – were not a direct attack on Huawei.

Yet Huawei remains locked out of lucrative US government and carrier contracts. Lobbying by the US has also seen Australia barring Huawei’s 5G technology from use by local telco providers, while New Zealand and the UK are on the verge of decisions that will ripple globally.

Meanwhile, Ping’s comments have been backed up by recent announcements from the UK and EU intelligence agencies, with a report from the UK’s National Cyber Security Centre (NCSC), concluding that any potential security threats posed by Huawei’s equipment can be mitigated. Similarly, a meeting of the German cabinet delving into a report by their security services that said they had failed to find any evidence of spying by Huawei. The findings of both the UK and Germany carry considerable weight and could see US lobbying around Huawei rejected by other EU countries.

During the round table, Ping also touched on how Huawei views telco security. He said technology suppliers have a responsibility to supply secure equipment, and carriers are responsible for their network security. He said while both need to work with regulators, cybersecurity needs to be based on fact rather than politics.

“To build safer networks, we need to standardise cybersecurity requirements. And these standards must be verifiable for all vendors and all carriers.” He went on to say that “We need to have a unified standard that should be verifiable. It should not be based on politics, but fact.”

The post Trump tweets, Huawei responds, Pompeo threatens appeared first on iStart keeping business informed on technology.

In an advisory to government agencies, the DTA, which received AU$700,000 in the last budget to investigate blockchain, cautions that agencies should focus on the problems they need to solve, rather than trying to embrace the technology for the sake of technology itself.

“This JPM project misses the point – introducing a closed network today is like launching AOL after Netscape’s IPO.”

The DTA’s research found blockchain lacking compared to other solutions, and suggests blockchain remains, to some extent, a solution looking for a problem.

“Our team found that blockchain is still an emerging technology and, when applied to various pilots or considered against alternative technologies, gaps become evident across both the technical and business facets of its implementation.”

The advisory reinforces comments made by DTA chief digital officer Peter Alexander at a senate hearing last October when he said blockchain had shortcomings and better alternatives were available.

“Blockchain is an interesting technology that would be well worth being observed but without standardisation and a lot of work to come – for every use of blockchain you would consider today, there is a better technology – alternate databases, secure connections, standardised API engagement,”

The DTAs views on Blockchain come after they had worked with several government agencies to examine how they were making use of blockchain.  The Department of Home Affairs (for freight monitoring, duties and tariffs), Treasury (for settlements and payments) and IP Australia (which is trialling blockchain to handle food traceability).

In its examination of blockchain technologies, Alexander was scathing of Blockchain hype saying that it was driven by sales and hype rather than results.

“I think it would be fair to say a lot of big vendors, and technology vendors, are pushing blockchain very hard, they see sales opportunity in it. So, internationally, most of the hype around it is from vendors and companies, not from governments, or users and deliverers of services who are saying ‘blockchain is the solution to our problem’.”

The DTA released their findings in the advisory, Blockchain overview: Australian Government Guide which concludes that “Agencies should focus on the problems they need to solve, rather than start from a specific technology solution.”

JP Morgan goes all-in
Blockchain maybe out of favour with the DTA, but their views have not reached the USA, where JP Morgan has launched a digital currency, the JPM Coin.

While it is not a cryptocurrency, it is blockchain based. When Institutional customers deposit money at JP Morgan, they get JPM Coins which can then get used in transactions with other JP Morgan clients. JP Morgan says pegging the JPM Coin to the US dollar will also help it gain traction with other financial institutions who have historically steered clear of what has been a highly volatile cryptocurrencies market.

JP Morgan claims the primary benefit of the JPM Coin is convenience. It says its customers sending JPM Coins to fellow customers over the bank’s Quorum blockchain network will experience reduced settlement times and risks.

The move to launch a digital currency saw JP Morgan CEO, Jamie Dimon doing a 360 of his once fiercely scathing views of cryptocurrencies. In 2017 Dimon was quoted as saying that cryptocurrencies are “worse than tulip bulbs,” referring to the historical market bubble in the Netherlands during the 1600s.

The official line from Dimon is now somewhat different. “As a globally regulated bank, we believe we have a unique opportunity to develop the capability in a responsible way with the oversight of our regulators,” he says.

JPMorgan said the new coin will initially only be available via its in-house blockchain network as a prototype. Longer term, the company says there are plans to make it operable on all standard blockchain networks.

Brad Garlinghouse, CEO of digital payment systems, Ripple Labs is critical of JPM Coin, saying “As predicted, banks are changing their tune on crypto. But this JPM project misses the point – introducing a closed network today is like launching AOL after Netscape’s IPO. Two years later, and bank coins still aren’t the answer.”

Garlinghouse has long opposed closed bank-issued digital currencies. He argues that projects such as JPM Coin could result in “an even more fragmented currency landscape than what we have today” and that “if banks of different digital asset groups want to settle trades with one another, they’ll have to make markets between their unique digital assets or trade between their digital assets and a common fiat currency. What a mess!”

Garlinghouse’s comments aside, the move to digital currencies by JP Morgan could see them exposed to a whole new category of cybersecurity risks. According to digital security analysts, Carbon Black, an estimated US$1.1 billion worth of cryptocurrency was stolen in the first half of 2018. While most people typically imagine robbing a bank involves ski masks and shotguns, Carbon Black says digital heists are surprisingly easy to pull off.

The massive increase in value of cryptocurrencies has been mirrored by the number of hacker-based thefts. Tokyo-based Mt. Gox, once the largest bitcoin exchange, was the first high-profile cryptocurrency hack. They filed for bankruptcy in 2014 saying they’d lost 750,000 of their customer’s bitcoins and 100,000 of their own. At the time, the lost bitcoins accounted for seven percent of all bitcoins and was worth an estimated US$473 million. In January 2018, hackers stole US$530 million worth of a lesser-known cryptocurrency called NEM from Japanese exchange Coincheck, and in December, a South Korean cryptocurrency exchange, Youbit had 17 per cent of its digital assets hoovered up by hackers. Its parent company Yapian filed for bankruptcy.

And, closer to home, in January 2019 Kiwi cryptocurrency trader Cryptopia said it had lost millions of dollars’ worth of cryptocurrency in a security breach that quickly became a worst-case nightmare for their 1.4 million registered users.

Could it be that once JP Morgan expands access beyond their internal Quorum network to the broader market, they could become a target for cyber-bank heists?

Maybe the DTA is right to advise caution.

The post DTA takes aim at blockchain appeared first on iStart keeping business informed on technology.

Theme #1: 5G
The most obvious is 5G. While there has been a steady stream of 5G hype driven by network equipment vendors and handset manufacturers, this year’s MWC19 Barcelona feels somewhat more grounded. Much of this is thanks to finalised 5G technology standards which has seen telcos around the world already testing and getting ready to deploy 5G.

“5G has shifted from last year’s hype to industrial and consumer use-cases and how to monetise costly builds as quickly as possible.”

Much of the 400,000 square metres and 15 pavilions that make up the Fira Gran Via venue are devoted to a seemingly endless array of 5G technologies and demonstrations. With telcos facing growing spectrum and infrastructure investment costs, much of the conversation this year around 5G has shifted from last year’s hype around the theoretical possibilities to industrial and consumer use-cases and how to monetise costly builds as quickly as possible.

Theme #2: Smartphones
No MWC is complete without handsets. MWC 2019 is no exception. With 5G standards now firmed up and telcos across Australia and New Zealand poised to build out 5G networks, the only remaining roadblock is the lack of 5G capable smartphones. The prevailing consensus at MWC the slew of announcements from phone makers around 5G smartphones. Indications are that with 5G deployments set to grow globally, headline-grabbing handsets from big-name phone-makers are all but guaranteed.

5G aside, the ongoing smartphone camera specifications race will continue (Nokia used MWC to launch a new offering complete with five – yes, five – rear cameras) while foldable phones that can convert from the now familiar rectangular smartphone slab into a small tablet look set to grab the lion’s share of media attention out of MWC.

Already, Huawei has used the event to launch its contender in the foldable market: The Mate X with an eight-inch (that’s tablet size) wraparound OLED display, which when folded is effectively a dual screen smartphone. Expect an eye-watering price for the luxury, however, with the Mate X expect to sell for over A$3,500.

Nokia also launched several offerings at the lower end of the market – an area ripe for competition as smartphone prices soar, leaving plenty of room for the vendors such as Huawei to fill the gap.

It is not just handsets either. Consumer gear such as a plethora of bluetooth speakers are featured while industrial and business equipment ranging from robots, biometrics and IoT gear has been hotly anticipated. Connected and autonomous vehicles are already generating a sizeable buzz.

Theme #3: Industry 4.0
Talk of the fourth industrial revolution has been bubbling away for some time but is looking set to gain greater acceptance thanks to connectivity technologies.

Smart manufacturing and IoT are two hot spots that are expected to drive ongoing debate as to whether Industry 4.0 is already underway, and where mobility and mobile networks fit into the picture. Technologies such as machine learning, robotics, mixed and simulated reality, plus where 5G/cellular IoT technologies fit into the picture are all expected to dominate a sizeable chunk of MWC19. These Industry 4.0 building blocks are being showcased in the Innovation City part of Fira Gran Via where an increasing number of innovative use cases are expected to drive enterprise applications and smart city innovations.

Theme #4: Immersive content
One of the most visually impressive parts of MWC19 is expected to consist of mind-boggling displays coined ‘realities’. These are expected to include augmented, virtual, mixed and simulated reality applications for both consumer and industrial use. Headsets, goggles and other cutting-edge display tech make up the lion’s share of the ‘realities’ exhibits which range from immersive marketing demonstrations through to holograms.

Theme #5: Digital wellness
Event organiser and global mobile association GSMA has long been committed to the UN’s Sustainable Development Goals, and MWC event will see digital wellness high on the agenda. Much of the discussion and tech showcased is looking at use cases for mobile technology, IoT and AI to augment and enhance healthcare sector capabilities. Much of this will happen through applications such as real-time health monitoring as well as low latency 5G enabled remote surgery using advanced robotics. There is also a growing emphasis on analytics for driving greater preventative health outcomes increasingly accurate health assessments.

Bonus Theme: The Unexpected
Okay, so I lied – there are actually six themes. Every year MWC manages to deliver the unexpected. This year isn’t expected to be any different. Given the sheer number of press conferences and innovation announcements still under wraps, it is a good bet that both media and industry pundits will be shocked by something completely left-of-field. Watch this space!

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Telstra’s revenue for the six months to December dropped 1.7 percent to AU$12.6 billion as competition in mobile grew and the NBN continued to drag the telco’s performance down.

“The the revenue and value is being transferred to the NBN and that is reflected in our income, profit and dividend.”

Telstra CEO, Andrew Penn says “Telstra’s circumstances today are very different from what they were before the NBN…that part of our business – the revenue and value – is being transferred to the NBN and that is reflected in our income, profit and dividend.”

It has been annus horribilis for the Australian incumbent telco. The result caps off a turbulent 2018 that saw the company announcing plans to axe 8,000 jobs as a response to its weakest annual profit in the last six years.

The latest half-yearly earnings report claims the rollout of the NBN network impacted Telstra’s results. NBN doom and gloom aside, Telstra did record increases in their mobile business.

As the NBN’s copper clause continues to bite, and mobile competition only intensifies, Telstra faces yet more downside risk. So what went wrong?

Telstra’s difficulties with the slow-moving train wreck that is NBN begs for comparison with Australia’s closest neighbour, New Zealand.

The comparisons are stark. Wholesale New Zealand network provider Chorus recently announced 10Gbps in-home fibre trials while both Vodafone and Vocus Group’s New Zealand operations announced they’re also launching 10Gbps fibre plans in January 2020. Meanwhile, in Australia, 100Mbps (that’s 100 X slower) is considered fast, and complaints around NBN performance mount.

Perhaps most frustrating of all is the fact that the abysmal performance was so avoidable. Telstra originally proposed that they’d build a super-fast broadband network. It said this could be done at no cost to taxpayers and free of any government subsidies. If the then government and ACCC had allowed this to happen, the private sector would have been building the broadband network free from political intervention, much like what has happened in New Zealand where the funding was essentially privatised.

The issue soon became highly political when Telstra asked for a regulatory holiday to exempt its new fibre investment from any requirement to share it with competitors, anathema to the public and politicians alike. As a fall-back position, Telstra also gave regulators the option of having the ACCC nominate prices for access to the new network. The ACCC refused to engage, and the Howard government refused to make any of the required legislative changes. (In New Zealand, fibre pricing is commercially set with the Commerce Commission charged with resolving any price negotiation failures). The situation became increasingly drawn out as the Labor Party, under Kevin Rudd, came to power.

By comparison in New Zealand, the incumbent telco, Telecom New Zealand, underwent structural separation, which saw their wholesale network infrastructure business spun off as Chorus. In September 2009, John Key’s National government set up Crown Fibre Holdings, a government body charged with funding the private sector fibre build outs – by Chorus and other fibre companies – and committed to an all-fibre network across New Zealand, announcing they would partner with the private sector in a bid to achieve 75 percent population coverage with fibre within 10 years.

Back in Australia, the Rudd government ignored the economics and committed to an even higher penetration of fibre to Australian households – 93 percent – saying that fibre-like performance in remote areas could be achieved using satellite services.

Now, almost a decade later, New Zealand has surpassed its initial goals and delivery has been largely achieved both on budget and on time. The Key government contracted the work to a group of private companies.

While in Australia, under a nationalised telco structure, the NBN rollout is running more like a full derailment in terms of budget, performance and timing.

The Australian Labor government’s then Communications Minister, Stephen Conroy, convinced Rudd to establish ‘NBN Co.’ as a government controlled organisation to build the National Broadband Network (NBN). It was a rather hurried initiative – rumours were that the initial finances were scribbled out on the back of an envelope while they were on a plane trip together.

From there, the situation quickly deteriorated. Negotiations with Telstra to build the network collapsed, despite the help of an AU$4.7 billion investment from the Rudd government.

As the 2010 election rolled around, the NBN came under intense political pressure. The Coalition argued the NBN model was flawed, and that the fibre roll-out was overly expensive and would be inefficient, saying that projected costs would be tens of billions more than the AU$43 billion Labor had claimed and NBN Co. was never going to make the 7.1 percent return Labor had promised. With numerous delays and cost over-runs, enough was going wrong with UFB to stoke an already well heated political debate.

By the 2013 election, with politicians on the hustings arguing the toss over networking technology they knew little about, the Turnbull government was beginning to talk up a version of NBN that featured a mix of technologies, including older copper lines for connections to homes and businesses and fibre extending only to street-side cabinets.

The Turnbull government said this would be tens of billions of dollars cheaper, allow for a faster roll-out and deliver speeds adequate for household use. The mantra ‘faster, cheaper, sooner’ quickly became the Coalition promise.

This version of the NBN still turned out to be extremely expensive with AU$49 billion and more spent so far. Protracted negotiations with Telstra around payment for the use of its copper ran for more than a year, slowing things down further.

Australian NBN costs remain high, with delivery a case study in poor performance against global benchmarks. Fibre to the premise (FTTP) connections typically cost an estimated AU$4,500 per household/business while fibre to the node (FTTN) is around AU$2,200 per household/business, and fibre to the kerb (FTTK) is an estimated AU$2,800. Using an efficient tendering model with the private sector, FTTP costs in New Zealand were estimated at AU$2,600 per household/business.

While the NBN roll-out has gained momentum in Australian cities (the number of premises passed is heading upwards of six million), the number of angry customers has also grown with many complaining that speeds drop significantly during peak times. It turns out that while New Zealand consumers can enjoy real-world speeds of 700-900Mbps, Australian ISPs are reluctant to pay costly NBN bandwidth fees, otherwise known as connectivity virtual circuit (CVC) charges. Under yet more political and public pressure, NBN Co. decreased the CVC charge, but many ISPs are complaining that it has become difficult to maintain margins and keep NBN prices at levels acceptable to customers. Because of this, ISPs limited the capacity they bought, which in turn affects performance at peak times. New Zealand has no such charge.

The problem has become so endemic that many Australians are choosing to stick with legacy copper services such as VDSL or cable. However, with a forced transition to NBN in play as copper gets switched off 18 months after NBN becomes available, that option is fast being closed down.

Poor technology choices, obstructive politics and growing public disquiet have so far not played well for Telstra. In their half-yearly earnings report, they claim that the rollout of the NBN network has impacted their results. Penn suggests that if a Labor government adopted a ‘more sensible’ approach to NBN, cost savings could get delivered to telcos, as well as NBN customers in the form of more affordable plans. The Opposition wasted no time seizing the opportunity with Shadow Communication’s Minister Michelle Rowland saying Labor will examine NBN pricing as a priority if they win the upcoming election.

While New Zealand’s UFB involved little political fallout and made good use of the private sector, telco commentators are saying that there has been a ‘market failure’ in Australian telecommunications. Taking the history of the NBN into account it is more apparent that the government’s State-owned regulatory framework is the problem, and Telstra – along with its myriad private and institutional shareholders  – are now paying (again, in taxpaying shareholder’s case) for the ongoing troubles.

The post Telstra feels the NBN burn appeared first on iStart keeping business informed on technology.

Sources indicate that the data breach was quickly detected, and the Australian Signals Directorate is working to secure the network.

Australian Prime Minister Scott Morrison confirmed that no Federal Government departments or agencies were targeted in the attack, but he was unable to provide any additional details. ABC Australia subsequently confirmed that the computer systems of ministers and staff were not affected, while backbenchers, the Opposition and crossbenchers have been impacted.

“The OIAC report shows 262 data breaches in the Oct-Dec quarter, with most being the result of malicious or criminal attacks.”

While this cyber-attack may be big news because the Federal parliament was the target, the most recent quarterly report from the Office of the Australian Information Commissioner (OAIC) shows that data breaches are becoming an increasingly common feature on the Australian digital landscape.

The latest report lists 262 data breaches in the October to December quarter, up significantly on the 114 data beach notifications the office received for the entire 2016-17 year (bearing in mind the notifiable data breach scheme has only been in force since last February). Most notifiable data breaches in the December quarter were the result of malicious or criminal attacks (168 notifications), with data breaches from human error accounting for 85 notifications, followed by systems errors which accounted for just nine notifications.

According to the OAIC, examples of a data breach can include when a device containing personal information is lost or stolen, or when a database containing personal information gets hacked, or if personal data gets provided to the wrong person in error.

The notified data breaches listed by the OAIC are just the tip of a sizeable iceberg as the Notifiable Data Breaches scheme only requires that breaches be notifiable when they could result in harm caused by the stolen data, or if the affected organisation has a turnover of AU$3 million or greater. Small businesses can still be required to comply, but only if they handle sensitive health documents or government contracts. Because of this, it is possible that many other breaches have either gone unreported or undiscovered.

Much of the malicious or criminal activity involved was a result of compromised usernames and passwords, which were obtained either via phishing or brute-force attacks. Australian Information Commissioner and Privacy Commissioner Angelene Falk says organisations and individuals should secure personal information by safeguarding their credentials.

“Employees need to be made aware of the common tricks used by cyber-criminals to steal usernames and passwords,” Falk says.

The OAIC has published guidelines for protecting data as well as information on how to deal with a data breach.

A key recommendation of the OAIC is moving quickly. If a data breach occurs, ensuring that there are early notifications can help those affected take action to prevent further harm from happening. The OAIC also say that those affected should change passwords and keep an eye on financial statements, plus scams using their personal information.

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iStart: The Malwarebytes report says malware authors changed tactics in the latter half of 2018, choosing to target organisations over consumers because of the bigger payoff. What sort of attacks are these, and what sort of payoffs can malware authors expect?

Brett Callaughan: Payoffs vary in each case, however the main goal of malware authors seems to be to exfiltrate data that can be sold to damage an organisation’s brand and reputation. They are also seeking the spotlight and want to gain notoriety but most often they are simply trying to extort businesses out of money by holding data for ransom.

“Malware that is modified by, created by and communicating with an AI is a very dangerous reality.”

iStart: The report says global business malware detections rose 78 percent. What is driving that increase?

BC: Malware authors pivoted in the second half of 2018 to target organisations over consumers because they recognised that a bigger payoff was possible from making victims out of businesses instead of individuals.

We’ve seen significant detection increases across a number of malware categories on the business side over the last 12 months, both globally and in A/NZ. Malware such as backdoors (173 percent), spyware (142 percent), trojans (132 percent) and riskware tools (126 percent) have all significantly increased, leading to an overall rise in A/NZ business detections of 78 percent.

iStart: Is this a tip of the iceberg situation with large numbers of malware exploits going undetected? What is your feel for this?

BC: It is just the tip of the iceberg. As long as there is money to be made, attackers will continue to pose a larger threat to businesses and consumers alike. Into 2019 and beyond, we will continue to see increases in malware detections and attackers will continue to focus on businesses in 2019 due to the greater financial opportunity.

Measures like the Notifiable Data Scheme have highlighted the number of attacks occurring, with the recorded detections increasing steadily with each quarter. It is worth noting, however, that while we are reporting more breaches and security incidents than ever before, the majority of them have always been happening in the background – it’s just that we’ve only started to make them public as of February 2018.

iStart: Are cryptomining attacks on the decline? 

BC: While the rest of the world noticed the decline of cryptomining attacks earlier in 2018, detections in A/NZ did drop off in the second half of the year, falling by 71 percent from August to September. While incidents of cryptomining have fallen, this doesn’t mean the threat of malware is over, with EmoTech and TrickBot detections increasing since mid-2018. Not only does this showcase the shift towards information-stealing malware, but underlines cybercriminals’ constant focus on creating new ways of making a profit from unsuspecting Australasian businesses.

iStart: Why the move to information stealers (such as EmoTet or TrickBot) over cryptominingware?

BC: There are a couple of reasons for the move to information stealing malware such as Emotet and Trickbot, the first being that information is more valuable. There are many ways that this information can be packaged and sold on to other cybercriminals and, depending on the type of details included (financial, medical, etc.), these packets of data can have a long shelf life.

The other reason is notoriety. An attacker gets substantial attention after a breach to a major organisation. Think of the media attention the Madgecart Group received following its series of data skimming attacks in late 2018. The group’s name was reported everywhere and Magecart attacks were heralded as the ‘next big thing’ in cybercrime.

iStart: Cryptocurrency miners saw a 1,164 percent increase in detections across the Asia Pacific region overall – I thought they were on the decline – is this a decline globally or a regional spike?

BC: This high percentage accounts for the earlier part of 2018, when cryptocurrency value was still higher. The decline of cryptocurrency miners in Australasia directly correlates with the declining value of cryptocurrency. Simply put, when the value of cryptocurrencies declined, the cybercriminals were no longer interested and found new ways to secure a big payoff.

iStart: The report lists the threats for Australian and New Zealand businesses – what factors make both markets different?

BC: As a region, Australia and New Zealand run a bit behind the US market from a malware perspective, and cryptomining is the perfect example of this. The boom and ultimate downturn of cryptomining in the US started half way through 2018, whereas A/NZ only started to see the downturn much later in the year.

Because we have a high proportion of small and growing businesses in the A/NZ region, organisations have limited resources and budgets to combat malware threats generally. Australia and New Zealand do differ in the types of malware that they are most susceptible to, however at this time this seems to be due to the preferred attack of the cybercriminal rather than due to any other external factor.

Previous reports like the Q3 CTNT report in 2018 found that backdoor, adware and anomalous (machine learning) malware detections were key differentiators. New Zealand saw significant increases in both the number of backdoor (116 percent) and machine learning detections (209 percent), whereas Australia saw a decrease of 94 percent and 29 percent respectively. The reverse is true for adware, with New Zealand recording a 24 percent decrease in the number of detections, while Australia recorded a 90 percent increase in this kind of malware.

iStart: The report mentions machine learning malware – what is it and how is it a threat to businesses?

BC: While the idea of having malicious artificial intelligence running on a victim’s system is currently pure science fiction, the 2019 State of Malware report predicts that malware that is modified by, created by and communicating with an AI is a very dangerous reality. The threat to business here is yet to be seen, but we can surmise that an AI that communicates with compromised computers and monitors is how certain malware is detected and can quickly deploy countermeasures. The downside is that AI controllers will enable malware built to modify its own code to avoid being detected on the system, regardless of the security tool deployed.

iStart: What are the key threats to businesses in 2019 and what should businesses look to do to give themselves a measure of security?

BC: 2017 focused on ransomware and attacking the consumer, 2018 was the year of the ‘mega breach’, but 2019 will be the year that businesses are in the crossfire.

New, high-profile breaches will push the security industry to finally solve the problem of unsecure usernames and passwords. Ineffective username/passwords have plagued consumers and businesses for years and while there are many solutions available, the cybersecurity industry has not been able to settle on a standard to fix the problem. In 2019, we will see a more concerted effort to replace passwords altogether.

As well as being extra vigilant with software and firmware upgrades, businesses will need to closely monitor their IoT hardware as the new year will see more and more hardware devices being compromised to serve up everything from cryptominers to Trojans.

As we’ve already discussed, cybercriminals will focus attacks on the business sector. To ensure a big payoff, attacks distributing cryptominers will focus on platforms that can generate more revenue such as servers and IoT devices, while others such as browser-based mining will drop significantly.

Both in the business and consumer spaces, the game of cat and mouse will continue, with old tricks applied to new threats and new tactics used for old favorites. Our advice remains to stay informed, stay vigilant and never take the security of your data or devices for granted.

iStart: What changes to the business cyber security landscape does Malwarebytes see for 2019?

BC: We can expect more of the same for 2019. Attackers will continue to focus on businesses because of the increased perceived payoff. Businesses will need to remain vigilant and continue to improve their security posture this year, always remembering that as attackers evolve and become more sophisticated, so too must their security measures.

From monitoring a business’ multiple endpoints, such as executive mobile phones and desktop terminals to securing cloud-based operating systems, a robust, holistic end-to-end security solution is required to protect every facet of the business environment.

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SAP’s CEO, Bill McDermott, says it will “further simplify structures and processes”, while commentary from key SAP officials also indicates that the move is primarily about aligning SAPs’ organisational structure, competencies and resources with strategic growth areas.

“We’re optimising our workforce to actually increase the growth of the company.”

Early indications are that the restructuring could impact an estimated 4,400 employees. The restructuring news came to light after SAP announced mixed Q4 and full year results.

While SAP has managed to maintain revenue growth, profit margins have taken a hit. Overall 2018 revenues were up five percent to US$28.23 billion, from the US$26.81 billion reported in 2017. Revenues aside, year-on-year after-tax profit grew by only one percent to US$4.67 billion. The story was different for cloud subscriptions and support related revenues which were up 41 percent for Q4 at US$1.61 billion, compared to the US$1.14 billion reported in the previous year. Revenues from traditional software licenses and related support grew by a paltry two percent year-on-year to US$5.62 billion from the US$5.50 billion reported in 2017.

The move for greater focus on the cloud by SAP is not unprecedented. In 2017, Microsoft’s Satya Nadella cut 10 percent of their workforce in a bid to reposition Microsoft’s cloud portfolio. The move paid off handsomely for Microsoft, whose annual infrastructure-as-a-service (IaaS) market share growth (98.2 percent) outpaced that of the market leader, Amazon (25 percent) in 2018, according to Gartner. The rise of Microsoft as a cloud player translated into rapid growth in Microsoft’s Azure service, with revenues almost doubling to reach US$3.1 billion in 2017.

According to Gartner, the global IaaS market grew 29.5 percent in 2017 to US$23.5 billion, up from the US$18.2 billion recorded in 2016. The rise of cloud technologies has seen enterprises handing over their data and applications to cloud services providers, with Gartner predicting up to 80 percent of businesses will have shut down in-house data centres by 2025 (Gartner also estimates that this is currently at 10 percent).

SAP executives have disclosed few details about the restructuring, but McDermott has said he expects 4,400 employees could be affected. SAP currently employs 96,500 employees but expects this number to rise to around 100,000 by the end of 2019.

SAP is emphasising the restructure as a positive, saying it is a shift in direction instead of cost-cutting.

“What we’re doing is optimising our workforce to actually increase the growth of the company, just to be very clear,” McDermott says.

He says the move is about freeing up resources to increase spending on strategic growth. The restructuring is expected to incur expenses of US$914 million to $1.09 billion, with the bulk of those projected in the first quarter of 2019.

That said, SAP anticipates that the restructuring will ultimately result in savings of US$857 million $971 million. SAP expects that by 2023, their cloud subscription and support revenues will triple.

The post SAP restructures, aims for the clouds appeared first on iStart keeping business informed on technology.

Facebook kicked off the fact checking programme after the 2016 US presidential election. During the election, Facebook came under pressure as reports of fake posts and political propaganda hitting hundreds of millions of Facebook users surfaced.

Snopes was not a sole partner in the programme. Facebook utilises 33 other fact-checking partners around the world to check content in 16 different languages.

“We estimate that anywhere between 30,000 and 40,000 links to false content, possibly many more, have been flagged.”

Other partners, including Associated Press, Factcheck.org and Politifact, have all denied that they too are exiting the fact checking programme. AP told TechCrunch that “AP is in talks with Facebook and we fully expect to be doing fact check work for Facebook in 2019”. Both Politifact and Factcheck.org also confirmed they are not exiting.

Snopes’ decision to exit the programme came amidst growing tensions between Facebook and Snopes.  Many Snopes employees have been quoted saying that their partnership lacked transparency and was often one-sided.

While Snopes and Facebook only recently publicly admitted that their partnership had come to an end, the writing had been on Facebook’s wall for some time. Snopes had stopped fact-checking Facebook posts at the end of 2018 when their $100,000 a year contract with Facebook ended. The split only become public news once both sides conceded that efforts to renegotiate a new contract had failed.

While other fact checkers are still working with Facebook, the departure of Snopes needs to be viewed against the sheer scale of the issues Facebook fact-checkers face.

• CNN says there are 83 million fake Facebook profiles
• Facebook estimate that in the fourth quarter of 2018, a whopping 1.523 billion people used Facebook, daily
• Facebook says users generate four petabytes of data per day

Clearly, Facebook and their fact-checking partners are facing a task of herculean proportions.

Given the sheer size of the problem, the overall effectiveness of manual fact checking is questionable. According to the Poynter journalism institute, only a tiny fraction of Facebook’s mountainous piles of data is getting fact-checked.

“We estimate that anywhere between 30,000 and 40,000 links to false content — possibly many more — have been flagged as part of the partnership,” Poynter says.

Making matters worse, ongoing tensions between fact-checking partners and Facebook are growing. According to the Columbia Journalism Review, “there is an ongoing struggle within the partnership to define ‘fake news’ in a way that doesn’t leave most of the classification power with Facebook, and a general unease among partners about how opaque and unaccountable much of the arrangement is”.

The extent to which these tensions existed bubbled to the surface last year when the Guardian published a report highlighting fact checker partner frustrations arising out of what they saw as a lack of transparency by Facebook.

Former Snopes managing editor and critic of the Snopes/Facebook partnership, Brooke Binkowski was scathing, saying: “They’ve essentially used us for crisis PR. They’re not taking anything seriously. They are more interested in making themselves look good and passing the buck… They clearly don’t care.”

Opinions remain divided as to the effectiveness of Facebook’s war on false news. While some say that the Facebook partnership with fact checkers is a positive, fact checker resentment grew following recent revelations that Facebook had paid a consulting firm to go after opponents by highlighting their association with billionaire philanthropist George Soros. The attacks fed into conspiracy theories of Soros being behind numerous liberal causes and other events. It later emerged that Sheryl Sandberg, Facebook COO, had directed staff to research Soros’s interests following his negative Facebook comments.

For many fact checkers, this was the final straw. One fact checker, who spoke on condition of anonymity, was quoted by the Guardian saying “Why should we trust Facebook when it’s pushing the same rumours that its own fact-checkers are calling fake news?” These sentiments were echoed by Binkowski, who said: “You cannot speak truth to power if you’re being paid directly by power”.

Facebook needs to get his sorted as quickly as possible as there’s a lot at stake. Having already racked up some of the biggest losses in US sharemarket history last year, Facebook investors are still jittery. The company’s reputation is likely to continue to come under considerable public scrutiny and Mark Zuckerberg needs to be able to reassure investors around data privacy, and fake news or these two issues may undermine Facebook’s business model.

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That this group, as yet unnamed, has formed ahead of Australia’s general election also fits well with earlier calls from unions and policymakers for regulatory intervention around AI. As reported earlier, the digital economy is already shaping up as a key political issue in the looming election. Given its potential impacts on jobs and the wider economy, AI is likely to be at the forefront of the debate.

“AI has become something of a political football.”

Team members include the former CEO of Telstra, the current CSIRO and JobsNSW chairman, David Thodey; KPMG Law national leader, Stuart Fuller; professor at Australian National University and director of 3A instituted, Genevieve Bell; and the University of NSW chair in innovative disruption and the law, Ross Buckley. In an open letter sent to Australian business and government leaders, the team highlights both the potential of AI as well as its risks, calling for national debate as the first step in avoiding social, economic and ethical pitfalls associated with AI.

While the group has shied away from traditional industry groups like the Australian Information Industry Association or any specific political alignment, the high-powered membership of the group means they are likely to inform future federal governments when it comes to crafting and implementing AI related policy.

Calls for AI regulation are nothing new. Last year, Australia’s chief scientist, Alan Finkel called for government regulation saying “What we need is an agreed standard and a clear signal, so we individual consumers don’t need expert knowledge to make ethical choices, and so that companies know from the outset how their AI is expected to behave.”

Finkel had proposed that companies could voluntarily apply for a government mark of endorsement for their AI, calling it the ‘Turing Certificate’. As part of his proposal, Independent auditors would test the AI developers’ code, business processes, and adherence to government compliance codes. His voluntary scheme was subsequently condemned by the Transport Workers Union (TWU) who have been actively pushing for direct regulatory intervention on AI. TWU secretary, Tony Sheldon labelled Finkel’s proposal as being inadequate for protecting Australians from the downsides of AI.

Australia’s Ethics Centre has also been developing an ethical framework that they say is applicable to any technology. In March this year, The University of Sydney is also to host an ethics of data science conference.

In New Zealand, similar calls to action around AI are also happening. The Artificial Intelligence: Shaping A future New Zealand report, released by the AI Forum in early 2018, concluded that New Zealand needs to proactively engage with AI ‘to shape a prosperous, inclusive and thriving future’.

The report says “…we either choose to proactively help shape its impact on our economy and society, or we passively let AI shape our future lives. To shape, or be shaped?”. As with Australian calls for debate and regulation, the report highlights the benefits of AI, saying that by 2035, AI could increase New Zealand’s GDP by up to NZ$54 billion.

In both countries AI has become something of a political football as articles debating the depth and breadth of the technology’s economic, social and political footprint become a common part of the media landscape.

Examples of this include a recent piece where analysts at Macquarie forecast that AI has potential to see Australia’s four major banks cutting up to 10,000 jobs each over the next decade, noting “We expect to see a significant reduction in administration, processing and low value-add activities and growth in IT functions… If banks are successful in digitalising and automating, we see scope to reduce FTEs by ~10k for each of the majors”.

A recent PWC study found New Zealand has the sixth-lowest share of jobs at high risk of automation thanks to the predominance of roles in difficult-to-automate industries within New Zealand, although 24 percent of Kiwi jobs will be at risk of automation by the mid-2030s.

While Australian unions such as the TWU have actively pushed for greater intervention with AI, citing the potential human costs and risks, the newly formed Australian group has adopted a pragmatic view and are advocating debate and regulation, saying that “Whilst there has been much debate, there has been little progress in how AI should be regulated.”

The letter posed several questions that the group says need urgent debate across topics including the impact of AI on Australia, the ethical and human rights challenges presented by AI, and ultimately whether Australia needs a governing body to set standards and guidelines for the ethical use of the technology.

The benefits and risk of AI are best summed up by Stephen Hawking, who was wary of the possible perils of AI right up until his death last year, stating that while “Success in creating AI would be the biggest event in human history. Unfortunately, it might also be the last, unless we learn how to avoid the risks.”

The group has so far not outlined any additional specifics but has said that they plan to hold an event tentatively called the Artificial Intelligence Forum, in February to “kick-start the creation of a charter and objectives for AI for Australia”.

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The report examines 150 existing programs, policies and strategies that contribute to achieving the government’s digital transformation vision, detailing how Australia could capitalise on the emerging digital economy.

The report focuses on six key areas spanning four strategic pillars of people, services, digital assets and the enabling environment.

“The government is more interested in ticking off a long-avoided item on its to-do list.”

In the people category, the report highlights a need to improve labour market information to keep pace with in-demand skills. Equitable access to technology is also a key people focus. The report suggests that digital services need to remain affordable and that rural and remote participation through infrastructure such as the NBN is a priority.

The services area covers digital government, discussing how technology can make government more accessible. In the digital assets space, infrastructure such as NBN and 5G is central to enabling other strategic areas identified in the report. Hinting at the growing fallout around Huawei, security is also talked up as an issue for 5G and the NBN.

But there’s already been criticism of the report with some it provides little in the way of recommending specific direction. While the report does include case studies of initiatives already underway, they are mostly drawn from the earlier innovation agenda document released back in December 2015.

With 2019 being an election year, the digital economy is set to become a contentious election issue. This has not escaped the attention of the report’s authors, and the economic contributions of technology to the Australian economy are the first topics discussed in each of its sections. The report’s introduction kicks off by saying that “improvements to existing industries and growth of new ones could be worth $315 billion to the Australian economy over the next decade”.

While there is little doubt that tech is driving growth in Australia’s economy, critics argue that the devil is in the detail.

In the recent Digital Pulse 2018 report, Deloitte found that Australia’s ICT workforce had increased to 663,100 during 2017. The report says that demand for ICT workers will increase by an estimated 100,000 to 758,700 workers by 2023.  A crucial caveat figuring in these forecasts is Australia’s ICT skills shortage, a likely political hot potato during the election.

Deloitte says that growth will happen by “developing and attracting highly skilled ICT workers, and a policy environment that accelerates technology investment and digital business activity”. The reality is that attracting skilled migrants is the only realistic option for filling ICT talent gaps over the next four years, yet recent changes to immigration laws are hampering this.

In 2017, the Government abolished the Temporary Work (Skilled) 457 visa scheme, replacing it with a new Temporary Skilled Shortage visa scheme. In April last year, the government removed 216 occupations from the eligible categories for temporary skilled migration – many of which were ICT skills.

With jobs and the economy big issues in any election, the release of the strategy document and the growing amount of criticism surrounding it does not bode well in what is already a chaotic political environment.

Opposition politicians have been swift to condemn the report, particularly the way in which it was released. Ed Husic, the Labour Shadow minister for the Digital Economy, was critical of the lack of importance the government placed on the digital economy, saying “To sneak out a long-promised strategy within a breath of Christmas tells you how seriously the Coalition takes this issue.”

Shadow Communications Minister, Michelle Rowland also weighed in, saying that by “Releasing it – and its small business digital engagement plans – so late in the year suggests the government is more interested in ticking off a long-avoided item on its to-do list, as opposed to developing a serious strategy to drive the digital economy.”

The opposition is not alone in their critical stance. A 146-page Australian Senate committee report provides a scathing summary of the lack of progress and failures in the digital government space.  Amongst the fiascos in the Senate committee report are outages at the Australian Taxation Office, where operational difficulties forced an overhaul of outsourcing policies and practices. The Centrelink Robo Debt scandal was also a highly public digital government failure. The trans-Tasman e-invoicing initiative launched last October saw Governments on both sides of the Tasman kicking off a consultation phase for an e-invoicing standard that they said could deliver billions in business benefits. Critics argued that this was merely a case of reinventing the EDI wheel.

The Home Affairs agency also kicked off what they called the ‘single digital window’ through which they said all of Australia’s international trade would go through. The window was intended to be digital, automated and user-friendly. In January last year, a Charles Sturt University review concluded that “it does not yet seem that a compelling business case or financing model has been built, nor has a determination been made as to what an Australian Single Window for trade should be, in terms of scope and coverage. Indeed, there does not yet appear to be an ‘in principle’ determination to proceed with a Single Window and, certainly, no advanced thinking on the technical design or structure of a Single Window has been developed.“

The biggest dollar item referenced in the Australia’s Tech Future document is the much-maligned infrastructure white elephant that is the NBN network. Although the report notes that benefits are already flowing out of its rollout, problems persist.

Across the Tasman, unlimited gigabit data has become an affordable commodity for Kiwi homes and businesses thanks to the New Zealand government’s UFB Fibre optic roll-out. In Australia, the copper-based NBN continues to attract the ire of Australian homes and businesses, many of whom are sticking with legacy copper services. Consumers are now getting pushed off copper services in a bid to stimulate NBN uptake.

Husic and Rowland’s scathing critique of the Australia’s Tech Futures document represents early shots fired in the coming election, expect more to follow.

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The BSA was tipped off by an unnamed informant who in turn received an AU$10,000 payout. The BSA says that the AU$160,000 settlement agreement is the largest paid out in 2018. Several other high value piracy settlements also got reported in Australia, with a Melbourne based architecture firm paying AU$33,936 and an interior design company paying AU$40,000.

In Australia, the BSA offers rewards of up to $20,000 for information involving unlawful copying or use of its members’ software.

“Rewarding informers has proved very successful.”

The prosecutions buck the global trend of declining software piracy. According to a recent report by the BSA, software piracy levels are declining globally. The BSA attributes this to both education and enforcement as well as an ‘increased understanding of the benefits of properly managing software assets’. According to the report, the worldwide unlicensed software rate declined two percentage points from 39 percent in 2015 to 37 percent in 2017.  While the BSA attribute some of the declines to a reduction in PC shipments, IDC (who co-authored the report) estimates 60 percent of the decrease was driven by increased software licencing compliance.

Similar high-profile software piracy cases are rare in New Zealand. The last major case was reported in 2012 when six Auckland companies supplied unlicensed Microsoft software to undercover investigators. Microsoft was understood to have received compensation to the tune of NZ$34,000.

Even though New Zealand is part of the Asia Pacific region (which along with eastern Europe has the highest rates of software piracy in the world), it continues to have one of the lowest rates of piracy, with only 16 percent of installed software in New Zealand estimated to be unlicensed. Australia follows closely at 18 percent.

The BSA says within Asia Pacific, unlicensed software has a commercial value of $16.4 billion. The region accounts for over a third of the commercial value of unlicensed software. China is one of the region’s biggest offenders, with $6.8 billion worth of unlicensed software. At present, the BSA has no operations in NZ.

Using informers to uncover piracy is not a new tactic for the BSA. They have been using Facebook advertising for several years. The adverts are designed to encourage people to report businesses using unlicensed software. If an informers information results in a successful prosecution, cash rewards are paid out.

While the prevailing response to the BSA’s Facebook campaign has been negative, the prosecution of several Australian companies does indicate that the approach is working. Jan Hlaváč, a spokesperson from the Czech branch of the BSA was recently quoted on Radio Prague saying that rewarding informers has proved ‘very successful’.

“We did it because we wanted to catch big fish. In the past, many informants did not want to disclose who they were, and it was difficult to set up serious communication with them. The only way out of this was to offer them something that would motivate them to fully cooperate.”

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The response, in a blog post, came in the form of a series of ‘myth-busting’ statements. Burgess took exception to the most commonly cited concern with the new law, namely that Australian companies could end up moving their operations offshore, saying that was at best a case of flawed logic.

“Australia is not the first country to enact this sort of legislation – and we will not be the last.”

“Australia is not the first country to enact this sort of legislation – and we will not be the last. Agencies in the UK already have similar powers.” He went on to say that other nations are considering their options.

As ironic as Burgess’s claims of flawed logic may be, the logic expressed by those with concerns is difficult to fault, regardless of how many other countries are considering similar laws.

Under the new law, the Australian government can issue notices to tech companies that require they remove encryption and other security on devices and services, to provide Australian law enforcement agencies access to stored data.

At first glance, this may seem perfectly reasonable. However, there are question marks around whether the law will require the creation of backdoors and other vulnerabilities in hardware and services sold in the Australian market – something that is a big issue for many. Detractors argue that these susceptibilities could get leaked, ending up being used (and abused) by the very people who the Australian government is trying to capture.

Minister for Home Affairs Peter Dutton said during the Bill’s second reading in the Australian parliament that “The legislation will not weaken encryption or mandate backdoors into encryption. The Bill specifically provides that companies cannot be required to create systemic weaknesses in their encrypted products, or be required to build a decryption capability.” He then clarified this by saying “The Bill provides law enforcement agencies with additional powers for overt and covert computer access. Computer access involves the use of software to collect information directly from devices.”

Detractors have pointed out that this part of the new law is, at best, problematic as definitions of basic terms like “systemic weakness”, are vague and used in conflicting ways in the Bill.

Worse still, is the potential impact on the Australian tech sector. Any encryption capable products designed, built or sold in Australia will have to have these vulnerabilities built in, potentially decreasing their appeal (and sales). Put simply, most Australian (and offshore) businesses, when faced with the choice of purchasing a messaging platform with backdoors or another with none will invariably go for the more secure option.

The issue was brought to the fore during joint committee on Intelligence and Security hearings on the legislation when Australian security vendor Senetas warned that they (and an estimated 200 jobs) could move offshore to avoid irreparable damage to their brand.

The timing couldn’t be worse. Australia can ill-afford an overseas exodus of tech talent. A recent report from the Department of Industry, Innovation and Science recently forecast declining demand for ore and falling prices would see export will drop from a high of A$214 billion recorded in 2017/18 to $200 billion in 2019. Other sectors such as manufacturing lack the competitiveness to pick up the slack, and many had been looking to Australia’s tech sector as a possible answer.

Burgess says suggestions Australian tech companies will be regarded ‘as no different to the high-risk foreign vendors that have been blocked from supplying equipment in Australian 5G networks’ are ‘absurd’.

“High-risk vendors have been banned from Australia’s 5G network because of the threat they pose when they could be subject to unbounded extrajudicial directions from a foreign government. It is not in any way an equivalent comparison to the highly-targeted assistance that the Australian Government will be seeking under the TOLA Act.”

While Burgess’s blog post attempted to answer claims that the new law will hurt the Australian tech sector, he did not address its potential impacts on consumer choice. Australian tech companies are not the only ones who will have to comply with the laws. Multi-national tech companies will also have to toe the line and weaken encryption and security in products and services sold in Australia. It is fair to assume that given the small size of the Australian market, some may simply put Australia in the too hard basket, choosing not to sell their products and services there.

Burgess also lashed out at concerns that the new laws were open to abuse, stating that “Nobody’s personal communications can be accessed under the Act without a warrant, in the same way, other legislation has operated for decades.”

What Burgess failed to discuss was that the new laws could also be used to provide evidence and prosecute lesser crimes including copyright infringement. It was also Interesting to note that he did not address fears around the scope for abuse within the new law.

This comes amidst recent revelations that the Australian Government’s Data Retention Bill (that required telcos keep records of phone and internet usage for security agencies) saw 80 agencies applying for access, including Greyhound Racing Victoria. Any laws involving access to personal and private data needs to be both well thought out, and have robust checks and balances to prevent similar abuse.

Burgess concludes by saying that “Many of the claims about the “dangerous” nature of the Act are hyperbolic, inaccurate and influenced by self-interest, rather than the national interest. The true danger is the thing the TOLA Act seeks to prevent: terrorists, paedophiles and other criminals communicating in secret, without law enforcement and security agencies being able to ‘crack their code’. Australia’s law enforcement and national security agencies do not ask for legislative change lightly or routinely. But when technology evolves, the law should evolve too – so we can continue our mission to keep Australians safe.”

Regardless of the fuss surrounding the new law, the simple reality is that it is the cyber equivalent of the Maginot Line, and is easy to bypass. Organised crime and terrorist organisations (that the law is intended to catch) could stop using commercial apps with built-in encryption and instead use customised software written in countries beyond the reach of the Australian law, whose encryption does not have any built-in vulnerabilities or weaknesses for law enforcement agencies to exploit.

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Since their launch in 2016, Data Republic has expanded beyond Australia and into Asia Pacific and North American markets. Their customers are made up of over 200 clients drawn from the banking, retail, government and airline sectors. The company, which is currently headquartered in Sydney with offices in Singapore and Los Angeles, has core backers including Westpac Reinventure, Qantas Loyalty, NAB Ventures, Qualgro and ANZ.

These investors have now been joined by Singapore Airlines, whose minority stake in Data Republic is aimed at strengthening their digital capabilities and Singtel’s Innov8. Singtel will gain a seat on the Data Republic board. Data Republic declined to disclose just how much had been invested by individual backers.

“The move to develop a cross border data trading platform represents a significant step forward in the data economy.”

Singapore Airlines stake in Data Republic was acquired through a placement of new shares and gives the airline access to Data Republic’s governance platform, Senate, which allows organisations to securely collaborate on shared data projects thanks to its integrated privacy protections and audit trails for greater levels of data safekeeping.

Industry analysts say that the move to develop a cross border data trading platform represents a significant step forward in the data economy (which when reduced business costs and greater efficiencies from embracing a data driven approach are factored in was estimated to be worth US$29.7 trillion globally in 2015).

So just what exactly is the digital economy? In a nutshell, it is what it says on the tin. A data economy is based on data. This includes data technologies, data products as well as services. The data economy represents a transition from a manufacturing to a service-based economy.

For a data economy to function, the digital ecosystem and networks of different players (data suppliers and users) need a standardised and secure platform to be able to effectively leverage data as an asset where value can be added or derived. This comes from data being used to make better informed strategic decisions and data-led improvements to operational efficiencies, all of which can help drive growth and innovation.

Singapore Airlines says that by working with Data Republic and partners in both Singapore and Australia they will be able to provide organisations with a useable way to collaborate and innovate digitally.

Also figuring prominently in Singapore Airlines investment decision is the recent data breach at rival, Cathay Pacific, who in October announced they had uncovered a massive data theft from 9.4 million passengers. The announcement caused Cathay’s shares to dip by 6.5 per cent in Hong Kong trading following their announcement.

As a primarily digital medium, data economies are exposed to data breaches and privacy is also an ongoing challenge. Because of this, there exists some serious motivation to both enterprises and governments to invest in data security, and for platforms to fit within regulatory frameworks such as the EU’s recent GDPR legislation. With this in mind, the secure nature of Data Republics Senate platform was also likely to be a drawcard for Singapore Airlines.

Security and privacy concerns aside, the move is also seen as helping bolster competitiveness. George Wang, Singapore Airlines senior VP of IT, was quoted in the Straits Times as saying that data is playing a growing role in helping organisations gain competitive advantage by providing insights into customer wants and needs.

“Our investment in Data Republic highlights our commitment to data innovation through a platform which leverages technology to ensure data security and privacy and further enhance our digital capabilities,” Wang says.

In a recent interview with InnovationAus, Data Republic co-founder, Danny Gilligan, commented that the funding will fuel expansion into markets within data-driven economies, including Singapore.

“What we hope is having a common infrastructure layer across two strong trading partners that we might be able to help develop the world first cross-border trading data framework.”

The involvement of Singaporean investors in this funding round is potentially indicative of a move by the Singaporean market to build out its growing data economy. Data Republic’s security and audit capabilities make it an attractive option as levels of interest grow around privacy and data security by regulators.

A Singaporean investment could also in effect provide Data republic with very high value reference customer which could prove strategically invaluable as other emerging data-driven economies, begin to seek out investment. Potential customers could include South-east Asia, Australasia and the US, as they move to develop data economy regulatory frameworks in the near future.

Technology may have shrunk the world, speeding up international commerce, but when it comes to utilising the vast volumes of data generated by business, many challenges have yet to get resolved. It is here that is Data Republic has an eye to the future and is hoping to carve a niche says Gilligan.

“It’s about potentially unlocking products that don’t exist today. So, if you’re a customer of a bank in one market, how do you get approved to open an account electronically in another market,” Gilligan says.

“Or, if you have a strong credit score in one market, how does that transfer when you move to a new country. Those are the problems that exist today where there are no solutions.”

By building a data-bridge in the form of a common and secure data infrastructure, data republic are boldly aiming to kick start the Australian data economy he says.

“Companies can develop algorithms and data products in the Australian market and can easily sell them to other markets that are adopting the same infrastructure. It will allow intellectual property algorithms move across borders rather than data moving across borders.”

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In a blog post published this week, ATO CIO, Ramez Katf, talked up the move, saying it would allow the ATO to utilise the best providers for specific service areas and to ‘ensure we’re engaging the right expertise’.

“The move to smaller contracts will most likely see deals with a smaller scope of services.”

The process is expected to be gradual, with tendering expected to roll out over three years determined by existing contracts expiring and evolving business priorities according to Katf.

The move comes after criticism of outsourcing expenditure which peaked at AU$330 million. The Australian National Audit Office (ANAO) published a report into the outages that was critical of the ATO’s vendor service agreements, and their utilisation of the cloud.

Just days after the first outage took out the ATO’s online services in late 2016, the ANAO report reveals that the ATO began to set up cloud computing contracts in the form of three separate agreements with Macquarie Telecom, Microsoft’s Azure and Amazon Web Services. Since then (and eight reports later), the ANAO has recommended that ATO reassess its service commitments with the cloud vendors.

The ATO attributed the bulk of their expenditure to fixing 2016/17 outages which required significant work and the deployment of additional resources. The ATO also indicated last year that they expected outsourcing costs to ‘trend down’ with outsourcing costs to peak at AU$280 million over the 2017-18 financial year.

Regardless of timing, the ATO’s move is also a response to the ANAO report, with the announcement that they are to split outsourcing into smaller bundles representing the biggest shakeup of their IT outsourcing deals in the last 10 years.

Another factor figuring prominently is the federal government’s stance on procurement. They have capped IT contracts at AU$100 million, setting a duration of a maximum of three years for IT contracts. Katf has said the move to smaller contracts that are ‘more granular and potentially shorter in duration’ and would most likely see deals with a ‘smaller scope of services’.

The move comes as the ATO seeks to finalise several key work streams in the coming financial year, the first of which is understood to include a replacement online portal for tax agents.

Either way, they are likely to have their hands full. The ATO currently runs over 100 applications, 2,000 servers and manage two petabytes of data… Sources within the ATO say they managed over 6,500 system changes in their production environment last year.

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