1. Key ICT Trends and Priorities Based on a survey of over 200 Australian CIOs Research conducted by Connection Research, a market analyst group that specialises in the intersection of ICT and sustainable technologies. www.connectionresearch.com.au

2. Key ICT Trends and Priorities Research by Connection Research Contents 1.The Survey 2.The Hype-o-meter 3.What’s Hype and What’s Not 4.Technology Perspectives 5.Changes in ICT: Budget and Headcount 6.IQ Matrix: Investment Priorities 7.IQ Matrix: Investment and Implementation 8.Top ICT Issues 9.Conclusion 10.Acknowledgement Research conducted by Connection Research, a market analyst group that specialises in the intersection of ICT and sustainable technologies. www.connectionresearch.com.au 2

3. Key ICT Trends and Priorities Research by Connection Research Introduction Welcome to the first newsletter from Insights Quarterly, a research initiative between Fujitsu and Microsoft created specifically to fund and publish research into today’s big ICT challenges and solutions in Australia. We recognise that CIOs and IT professionals have a difficult job. Budgets are tight, management demands more accountability and greater ROI from their ICT investments. At the same time there is a constant clamour for new technologies and capabilities. To shed light on these challenges we went to the CIOs themselves, people like you who can provide real insights grounded in real experience Research conducted by Connection Research, a market analyst group that specialises in the intersection of ICT and sustainable technologies. www.connectionresearch.com.au 3

4. Key ICT Trends and Priorities Research by Connection Research ICT Survey: Sample and Objectives In Mid 2011, Fujitsu and Microsoft Commissioned Connection Research to Survey CIOs from 207 Australian Companies By Industry sector By employee numbers Survey objectives: Assess business optimism; identify CIO challenges; gauge reaction to new technology 4

5. Key ICT Trends and Priorities Research by Connection Research ICT Survey: Key Findings Headlines 1.Aligning ICT with business needs and process remains the CIOs’ primary objective 2.Technical staff are increasingly being asked to support employee devices 3.Tight budgets are encouraging a shift towards cloud computing, moving ICT spending from CapEx to OpEx 4.When choosing which enterprise systems to invest in and implement, CIOs prioritise ERP and core systems, followed by BI tools. 5.Communications investment is at a low ebb. 5

6. Key ICT Trends and Priorities Research by Connection Research The Hype-o-meter Cloud Computing Cloud computing is regarded as both the most important and the most overhyped technology. CIOs recognise it as a major emerging trend and have budgeted accordingly. Respondents were asked to rate a number of technologies in terms of whether they believe them to be overhyped or underhyped, and whether they are important or not. Overall results are expressed as a four point radar (“spider”) diagram for each technology. The thinner the shape the more important CIOs believe the technology to be. The higher the shape the more the technology is believed to be overhyped. The Hype-O-Meter shows that CIOs generally accept or reject a new technology based on its merits. They evaluate technology in terms of business and ICT objectives, which evolve over time but which do not change nearly so quickly. The next section establishes the context of these technologies by looking at the importance of these objectives.

7. Key ICT Trends and Priorities Research by Connection Research What’s Hype and What’s Not Cloud Computing is Over-hyped, But Still Important The National Broadband Network Really is Important 7

8. Key ICT Trends and Priorities Research by Connection Research What’s Hype and What’s Not Wireless Broadband Deserves More Attention… … and so Does VoIP 8

9. Key ICT Trends and Priorities Research by Connection Research What’s Hype and What’s Not Unified Communications are Moderately Important Social Networking Is Overhyped 9

10. Key ICT Trends and Priorities Research by Connection Research What’s Hype and What’s Not Software as a Service 10

11. Key ICT Trends and Priorities Research by Connection Research Technology Perspectives Virtualisation Considered the Most Relevant Technology 11

12. Key ICT Trends and Priorities Research by Connection Research Technology Perspectives Changing Business Requirements the Top ICT Challenges 12

13. Key ICT Trends and Priorities Research by Connection Research Technology Perspectives Better Data Access Tops List of Most Desirable ICT Improvements 13

14. Key ICT Trends and Priorities Research by Connection Research Technology Perspectives Improving Processes and Meeting Business Expectations the Top Objectives 14

15. Key ICT Trends and Priorities Research by Connection Research Changes in Budgets and Headcount Increased Software Licence Costs Top Anticipated Budget Changes 15

16. Key ICT Trends and Priorities Research by Connection Research Investment Priorities Storage and Virtualisation Top Technology Investment Areas 16

17. Key ICT Trends and Priorities Research by Connection Research IQ Matrix Introducing the IQ Matrix (Investment vs Implementation) The following section shows how various technologies are maturing in today’s market. Respondents were asked for the level of currentimplementation and planned investment they had in the listed technologies. The answers were then analysed and put into a quadrant, mapping implementation against investment. The positioning of a technology within the IQ Matrix shows their status relative to each other within each matrix and are not designed to reflect actual market shares. 17

18. Key ICT Trends and Priorities Research by Connection Research IQ Matrix: Investment and Implementation Data Centre and Enterprise Infrastructure: Strong Investment in Windows Servers, Network Storage and Virtualisation 18

19. Key ICT Trends and Priorities Research by Connection Research IQ Matrix: Investment versus Implementation Security: Back-up, Recovery and Archiving Top Investment Higher base, lower spend Higher base, higher spend Lower base, lower spend 19

20. Key ICT Trends and Priorities Research by Connection Research IQ Matrix: Investment and Implementation Communications: Moderate Levels of Investments; Companies Prioritise Core Infrastructure Higher base, lower spend Higher base, higher spend Lower base, lower spend 20

21. Key ICT Trends and Priorities Research by Connection Research IQ Matrix: Investment and Implementation End User Technologies: Spending Concentrated on Desktops and Laptops Higher base, lower spend Higher base, higher spend Lower base, lower spend 21

22. Key ICT Trends and Priorities Research by Connection Research IQ Matrix: Investment and Implementation Enterprise Applications and Content: ERP/Core Business Systems and BI Top Objectives Higher base, lower spend Higher base, higher spend Lower base, lower spend 22

23. Key ICT Trends and Priorities Research by Connection Research IQ Matrix: Investment and Implementation Sustainability: Lowest Levels of Investment and Implementation Higher base, lower spend Higher base, higher spend Lower base, lower spend 23

24. Key ICT Trends and Priorities Research by Connection Research Top Issues: Cloud Adoption-related concerns dominate cloud computing issues  Artificial limitations applied to systems based in the cloud resulting from multitenant architecture.  Barriers to moving into cloud  Complexity of customised systems and getting them into the cloud  Consolidation of business solution to backbone applications versus multiplication of cloud/SaaS solutions  Dealing with legacy systems that are not capable of moving into a cloud 24

25. Key ICT Trends and Priorities Research by Connection Research Top Issues: Staffing and Skills CIOs Struggle to Retain Skilled Staff and Ensure Employees Reap Rewards of ICT  Capability of client organisation members to capitalise on solution  Continual change of staff and related software training of replacement staff  Hiring and retaining skilled staff  Lack of increase or in fact decrease of ICT staff despite increase in use of technologies  Poor quality of skills and increased expectations of young workers  Business “professionals” who lack understanding of impact ICT has on their operations 25

26. Key ICT Trends and Priorities Research by Connection Research Top Issues: End User Demands Business Users Exert Wide Variety of Demands on ICT Staff  Keeping users happy  Lack of end user awareness of real costs associated with implementing technology well  Managing end-user expectations  Impact of social networking on young people and lack of proper awareness by parents  Meeting users demands for core technology  Remote user support 26

27. Key ICT Trends and Priorities Research by Connection Research Top Issues: Infrastructure and Technology Misperception, Skills Shortages and Network Performance Issues Cloud ICT infrastructure  ICT seen as a utility and not an enabler  Lack of expert knowledge in certain technologies in Australia which require sourcing from other countries  Network performance and high speed broadband network to support Teleworking  Rationalisation of applications with business processes  Short lifecycle of infrastructure  Sustainable ICT 27

28. Key ICT Trends and Priorities Research by Connection Research Top Issues: Business Processes Balancing Support with Rapid Development and Connectivity are Key Issues.  Balancing business as usual resources to meet project demand  Data communications delivery (remote construction and mine site challenges)  Facilitating fast development with agile practices  Lack of interest in ICT governance by the business  Require better internet speeds for wireless communications - laptops and printers  Time: being able to commit enough to complete projects properly 28

29. Key ICT Trends and Priorities Research by Connection Research Top Issues: Funding ICT Staff Face a Wide Spectrum of Cost Pressures  Attempting to do more with less  Cost of ICT Resources  Licensing Costs  Operational Budget Management  Reducing Opex Costs  Reduction of ICT costs per workstation 29

30. Key ICT Trends and Priorities Research by Connection Research Conclusions CIOs and ICT managers have difficult jobs. They need to manage a wide range of business and technological issues, managing and implementing complex technologies while meeting a wide range of often conflicting organisational imperatives. They are constantly faced with an enormous range of choices. They must juggle competing priorities, understand new technologies, work within limited budgets, and try to satisfy the existing needs of the business while exploring new opportunities. The survey shows that CIOs are handling these various tasks well. They are interested in new technologies, but they do not implement them for their own sake. They are generally cautious, because they know that ICT’s role is to support the business, and that must take priority over everything else. They are unlikely to be swayed by hype, but they do recognise the potential of new technologies and business models when they see them. Cloud Computing is a good example. Cloud has been widely discussed, but CIOs generally believe its high profile to be justified, because it offers greater flexibility and lower cost. But most investment is still in traditional areas – the core business systems that keep the organisation running.

31. Key ICT Trends and Priorities Research by Connection Research Conclusions This is highlighted in the section on investment and implementation. There are many possible areas of technology investment, but most money is going into established areas, such as ERP systems, desktop and laptop PCs, and Windows servers. Areas such as tablet computing, which are attracting a great deal of publicity, are not yet areas of significant corporate investment although there is a noticeable trend in this direction. One area that is not yet attracting a great deal of interest or investment is ICT Sustainability, or Green ICT. Most CIOs indicate they want to improve their energy efficiency and reduce ICT’s carbon footprint, but they have little incentive to do so in the face of other priorities. Few of them are responsible for ICT’s power consumption, so squeakier wheels get the oil. This is likely to change significantly in coming years as energy efficiency assumes a higher profile, and Australia’s Carbon Tax kicks in. The survey paints a picture of quiet confidence. Budgets are stable or growing. CIOs are, for the most part, meeting business needs. New technologies are being introduced, but only at a speed commensurate with those business needs. ICT is a means to an end, and must always support corporate objectives.

32. Key ICT Trends and Priorities Research by Connection Research About Fujitsu and Microsoft About Fujitsu Fujitsu is a leading provider of information and communication technology (ICT)-based business solutions for the global marketplace. With approximately 170,000 employees supporting customers in over 100 countries, Fujitsu combines a worldwide corps of systems and services experts with highly reliable computing and communications products and advanced microelectronics to deliver added value to customers. Headquartered in Tokyo, Fujitsu Limited (TSE:6702) reported consolidated revenues of 4.5 trillion yen (US$55 billion) for the fiscal year ended March 31, 2011. For more information, please see: www.fujitsu.com About Microsoft Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realise their fuloml potential. For further information visit www.microsoft.com

33. Key ICT Trends and Priorities Research by Connection Research Contact Us Have your say Our surveys are conducted regularly so if you’d like to influence the questions we research, please email us to make suggestions at; info@insightsquarterly.com

34. Key ICT Trends and Priorities Research by Connection Research The Acknowledgement To find out more about this issue of Insights Quarterly To listen to the podcast, download this report as a PDF or get a PowerPoint presenting these findings, visit www.insightsquarterly.com.auwww.insightsquarterly.com.au For further information email info@insightsquarterly.cominfo@insightsquarterly.com Fujitsu and Microsoft would like to thank the many people and organisations involved in the production of this report. We would particularly like to thank the CIOs and senior IT managers who responded to the survey upon which it is based. We appreciate the many time constraints they face, and without their assistance the exercise would not have been possible. We would also like to thank our research partners Connection Research for providing research expertise, and for analysing and interpreting the results. Report author: Graeme Philipson, Research Director, Connection Research. Copyright information All rights reserved. The content of this report represents our interpretation and analysis of information gathered from various sources, but is not guaranteed as to accuracy or completeness. Reproduction or disclosure in whole or in part to other parties, by any means whatsoever, shall be made only upon the written and express consent of Connection Research Services Pty Ltd. © 2011 Connection Research Services Pty Ltd (ABN 47 092 657 513)

35. Thank you Research conducted by Connection Research, a market analyst group that specialises in the intersection of ICT and sustainable technologies. www.connectionresearch.com.au