Sunday, July 22, 2007

China Scale.....

Followers of Hyro will be aware that we recently announced that we are in negotiations with European services organisation Getronics NV to acquire their Application Services Business in mainland China, Hong Kong and Macau. This isn't the place to talk about that deal, but the work we have been doing in this area has highlighted the exciting scale and growth opportunities in the Chinese digital services market.
The first observation is the scale of the the online user market (and specifcally the level of broadband penetration) in both China and Australia. The "Broadband Penetration" chart to the right shows two interesting statistics; while the number of households with broadband access in China will run at about 10x the number here in Australia by 2011 (and be up around 80 million households), the level of penetration will still only be around 25% of households.
Mapping this level of broadband access is the expected rate of growth in the online advertising market over a similar time period. Zenith Optimedia (who have lower estimates for the Australian online advertising market than most local analysts). The Australian market for online advertising is expected to grow to around US$2 Billion by 2009, while the China online advertising market is likely to be nudging US$18 Billion in the same timeframe.
Lots of commentators talk about the size of the China market. For me, the scale is matched in terms of exicting potential by the fact that many Chinese businesses (and international businesses entering the China market) are doing so with digital services as major parts of their strategies. It is another example of emerging markets leap-frogging generations of traditional technology and business models to ake the very best of contemporary practices.
It will be very interesting and exciting to continue to watch the emergence of the China digital services market. This is a very real example of this exciting evolution that is changing the world.

Sunday, July 01, 2007

Virtualisations get Second Life Second Wind...

A News Corp article has caught my eye today. Journalist Katja Gaskell discusses the emerging trend of tourism destinations in virtual worlds; either virtual renditions of real-world tourism destinations or new constructions from the imaginations of their creators.

This article reminds me of the first time we saw the emergence of "3D Virtualisations" online - a long time ago, perhaps almost a decade. The technology was called VRML and we all toyed around with the technology to try and create virtual worlds through which avatars could interact. Trouble was, this was pre-broadband and even the fastest modems could provide much else other than a jagged, jerky, low-res experience. (Maybe we watched the Lawnmower Man or Tron a few too many times and just wanted to make it real). We then tried to create the 3D experience through some clever photographic handling. Cameras on special tripods and some clever photo-stitching software created 3D views of houses, hotel rooms and so on.

All of this was driven by the same thing - the desire to break the mould of the traditional presentation of information in a "document based paradigm" of text and still pictures. Sure, the internet added the hyper-link (the ability to connect information) and of course, the store of information we could access would become boundless, but the delivery was still much the same as traditional media.

People though, are sensory beings, and while text and pictures do deliver information, we prefer to use our five senses to provide a more complete understanding of the information we are being presented. One of the "holy grails" of information delivery has been to try and find ways to transform information delivery to a more "sensory rich" form.

I am not suggesting that Second Life achieves this objectives, but it is certainly an interesting first step. The ability to interact with information (and offers of course) in a 3D virtual environment offers a different perspective on the information. To bastardise a cliche, if a picture is worth a thousand words, then an interactive 3D virtualisation might evolve to be worth a thousand pictures. A 3D environment allows us to create new connections between pieces of information and new ways to present the infromation itself. Applications of this concept through environments like Second Life are creating ways in which users can experiment with these concepts and as usual, users are constantly surprising us with their ingenuity and innovation.

I have had the pleasure of speaking at the Creative Exchange Network in Melbourne (and will again this week in Sydney) about Virtual Worlds. Consulting company Mindwerx facilitates regular meetings of the Creative Exchange Network in Australia. The topic of my presentation is not about Second Life itself per se, it is about the changing ways we present information and services. As the bandwidth, processing power, rendering tools and the ability to integrate these to databases and transaction systems continue to improve, the opportunities and applications of rich media and virtualisations will continue to evolve. And it doesn't stop with virtual reality ... get ready for ideas like mixed reality - using technology to augment real-world activities... but more on that another time.

The feedback was fantastic (we had about 45 people attend, so corporate interest in pretty high). Corporations are looking for ways to reach customers in light of the increasing variety of channels and options for entertainment and obviously they will need to understand how rich media and virtualisations will figure in this. It is time to start experimenting and working out how you are going to use these innovations to change the (virtual) world.

Synergistic Thinking ....

It has been almost a month since my last post - a pretty poor record for someone who enjoys blogging (particularly having my own soapbox - complete with the opportunity for others to share what they think about my ramblings). There has been a fair bit going on.

After my brief holiday at the end of May, I have back to work and have hit the ground running... and there has been plenty to do.

The main focus has been the integration of Synergy Software Holdings Limited and the associated businesses. This is following the final approvals from shareholders and regulators in the middle of May and comes at the end of six months during which we have needed to first complete due diligence and then undergo the fairly intensive task of running a "full process" to complete a scheme of arrangment and the acquisition. That is all done now, and Synergy is now a Hyro Company.

While there has been collaboration between the groups for months (we got to know each other when we started to work together for some of our clients) the finalisation of the deal has meant that we can fast-track the finalisation of the integration of systems and processes and more importantly, get on with introducing the full offer to all of our clients. There are other places to talk about the details (market information is disclosed on the Australian Stock Exchange and archived on but I did want to share some resonating benefits of the acquisition that I have experienced.

All of this is about the people. We have an exciting, growing business in an exciting, growing industry. Success in this environment comes not only from the offer you have to make to the market, but also the team with which you deliver it. The team at Hyro has always been impressive - we have great management and an outstanding team of professionals, regarded as the best in their fields locally and internationally. With the added community of Synergy people, we have added new, fresh depth of skills, ability, experience and professionalism - I am really enjoying the way the teams have stepped straight into working as one company, one management and one team. We are much stronger for the acquisition and even better positioned to change the world.