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June 4, 2024
In any walk of life, a solid foundation is imperative. That indispensable layer upon which value is not only created but sustained, nurtured and enhanced.
Often the launchpad for ingenuity yet equally, a guiding light in times of uncertainty. It’s not always fashionable to protect the base when the bright lights of innovation come calling… much easier to follow the crowd with reckless abandon.
But amid the promise and peril of artificial intelligence (AI) in Australia, foundational work is everything for an eagle-eyed enterprise weighing up its options.
“Businesses are watching, learning and assessing,” observed Angela Fox, Senior Vice President and Managing Director of Australia and New Zealand (A/NZ) at Dell Technologies.
On the one hand, organisations have embraced GPU-as-a-service without delay during the past 12 months, motivated by a desire to maximise machine learning (ML) capabilities at speed. This has been notable in markets such as Singapore and remains reflective of regional and global sentiment, as large language models (LLMs) continue to take centre stage.
“We haven’t seen that play out in Australia yet,” Fox clarified. “But we hold the strong belief that AI is going to move quickly from a GPU-as-a-service standpoint in the enterprise. Customer adoption is coming.”
On the other hand however, Fox acknowledged that local companies are operating at different levels on the adoption curve. Interest is inevitable but adoption alternates depending on company size, sector and strategy.
“When you think about organisations in some industries, AI has been inherent in their business for many years,” Fox reminded. “For some of our largest customers in Australia, this is not new and GenAI is simply just the next wave.
“Businesses are working this out now – there’s a lot of assessment taking place in Australia currently. Where do LLMs fit in? How can we develop bespoke models? Should they be industry specific models?”
The knock-on effect of such curiosity is a sharp rise in GenAI proof of concepts (POCs) being spun up across the enterprise, predominantly small in nature and mirroring a “toe in the water” type approach to this new (ish) technology.
“That’s definitely playing out and there’s still a huge opportunity ahead of us,” Fox said. “Also for our partner ecosystem who are responding to this interest and continue to play a critical role in accelerating POCs in customer environments.”
Fox’s assessment of advanced AI adoption in Australia is playing out in the numbers – this is a market on the cusp of mass deployments yet enterprise progress remains measured and methodical.
According to Moxie Research – which surveyed 251 CIOs in Australia during February 2024 – organisations will increase investment in the following strategic technologies during the next 6-12 months:
For the majority of businesses embarking on this innovation journey in Australia, the positive impact of GenAI adoption significantly outweighs any potential roadblocks. Specifically, the positive impact of GenAI will be realised in improved:
Such CIO sentiment is unsurprising given 62% of IT executives are now prioritising taking a lead role interacting directly with customers in 2024. This is aligned to a significant swing in responsibilities, with the majority of CIOs now tasked with identifying new ways to capitalise on commercial opportunities (60%).
In the era of the revenue-generating CIO, the importance of GenAI has heightened.
“And there’s lots of entry points to get started,” advised Fox, who was addressing media during Dell Technologies World 2024 in Las Vegas.
“We’re seeing AI play out right at the edge and at the user interface – that capability now exists and is there to be delivered. Most likely, that’s going to bring AI to life the fastest in the short-term. But we’re also seeing the infrastructure at the back-end as a logical starting point.”
Don’t forget data
To best understand the personas behind technology investment decisions, Moxie Research asked 251 CIOs in Australia to outline which statement they most closely self-identified as – multiple selections were accepted.
Reflective of a turbulent economy – and continued post-pandemic market volatility – organisations are fine-tuning plans to reposition for sustained future growth. In order of priority, central to ‘Strategist’ efforts are intentions to:
“We’re also up-skilling our entire workforce at Dell to maximise this AI opportunity,” Fox shared. “Every one of us in the company is up-skilling, whether that be in leadership or sales, product managers or product development or through our go-to-market teams – this is every single step of the way.”
The appointment of Jeff Boudreau as Chief AI Officer at Dell best illustrates this commitment, tasked with sharpening the internal AI sword at global, regional and local levels.
“This includes up-skilling employees and moving them into dedicated AI specific roles and bringing those skills into the market,” Fox added.
While an enterprise surge in up-skilling will help accelerate the maximisation of AI, Fox cautioned that out-dated IT environments must also be overhauled to unleash its full potential. In other words, innovation up the technology stack can seldom be achieved without modernisation at the infrastructure level.
Because as Bill McDermott – CEO of ServiceNow – put it… “it’s a mess out there, ladies and gentlemen. The enterprise is a mess.”
In sharing the stage with Michael Dell – Chairman and CEO of Dell – in Las Vegas, the charismatic software chief hammered home the point.
“Every workflow in every enterprise, in every industry, in every corner of the world will be reinvented with GenAI,” he forecasted. “When you have people swivel chairing among 17 applications a day, no wonder they don’t want to come back to the office.”
Extend the problem statement to the rest of the enterprise and the headline comment holds. For the majority of CIOs, data is a mess and infrastructure is ageing.
“Businesses can start with AI while getting their house in order,” Fox explained.
“This can happen at the same time and comes back to that continuum that’s always in the market – some customers are still very much at the modernising IT stage. And it’s understandable because a modern IT bedrock or foundation is going to put the business in good stead.”
Despite CIOs assuming the role of ‘Strategist’, operational challenges continue to hinder the execution of corporate objectives, chiefly:
According to Moxie Research, this technology roadblock is now derailing the data strategies of most organisations in Australia, prompting the prioritisation of two key initiatives during the immediate to short-term:
“Data is the core and that is resonating in the enterprise,” Fox added. “But where is the data? What are the multiple sources of data? How can businesses access that data?
“There’s an opportunity to not only modernise infrastructure but to modernise overall data strategies – these are all the necessary building blocks required to fully extract the benefits of AI.”
As the enterprise clears the deck – reducing technical debt, implementing new systems and redesigning business processes – Dell is packaging up a path forward in the form of an AI Factory.
Rolled out to offer customers access to an AI portfolio from device to data centre to cloud, AI Factory is a suite of solutions underpinned by an open ecosystem of technology partners creating AI applications at the top of the stack.
Collaboration with Hugging Face will provide on-premises deployment of GenAI models while a continued partnership with Meta will simplify deployment of Meta Llama 3 models to provide test results, performance data and deployment recipes.
Alignment with Microsoft Azure AI Services will speed deployment of AI services, such as speech transcription and translation capabilities.
Meanwhile, an expanded partnership with Nvidia now includes new server, edge, workstation, solutions and services advancements.
“The AI Factory can move up or down the market,” Fox added.
“Large-scale enterprise companies might have in-house resources to integrate and develop AI capabilities themselves, using the AI Factory. Whereas, the mid-market will be attracted by the full-stack and integrated offering given the validated designs at the infrastructure layer.”
Leaning in on ecosystem excellence
Another critical layer of the AI Factory is ecosystem, placing increased emphasis on a network of partners attempting to build expertise at pace to meet rising end-user demand.
This is in addition to the emergence of a non-traditional channel in the form of independent software vendors (ISVs) carrying deep levels of industry and technology specialisation, alongside a peripheral group of AI influencers operating in adjacent markets.
At some point, all worlds will collide with Fox acknowledging that AI has now “redefined” the partner landscape in Australia.
“The AI Factory needs the ecosystem,” Fox said. “Our role at Dell is to bring the benefit of this combined expertise together to achieve scale and reach. For example, it could be financial services or manufacturing expertise – the whole ecosystem has become critically important.”
Building on a solid base of long-standing partners in market, Dell is also connecting the dots through vendor alliances with Nvidia, Intel and AMD among others – the aim is to create a 2+2=5 type of scenario.
In Australia, just under half of CIOs currently collaborate with 2-3 strategic partners (44%) on innovation projects, with almost a quarter widening ecosystem reach further with 4-5 partners (21%). The split includes consultancy firms (35%) and software developers (35%), alongside managed service providers (MSPs) and ISVs (both 28%), plus specialised system integrators (18%).
“We must play a lead role in facilitating engagement and introductions to our existing channel,” Fox added. “In the world of AI, there’s going to be multiple parties involved in delivering success.”
According to additional Moxie Research – which surveyed 266 channel partners in Australia during November 2023 – more than a quarter (28%) of partners are currently deploying AI and ML solutions to customers but to varying degrees of maturity.
While common use cases exist – such as AI-powered assistants and chatbots – CEO interest at an end-user level is also leading to an increase in AI-washing projects.
Aggressive market hype has yet to translate into tangible partner activity however given the current climate, competing solution priorities (cloud management and cyber security) and a need for the ecosystem to build internal AI and ML capabilities (notably a challenge for 30% of partners).
“Partners must decide for themselves,” Fox outlined. “Now is the time to assess business models and understand where to play on that continuum. Will they specialise? Will they play multiple roles or even end-to-end?
“Think about the scale. What’s going to be more synergistic and financially viable for partners? Will they be able to achieve what customers are looking for faster by going it alone or through partnering opportunities? We’re helping partners during that self-select assessment process.”
For example, Fox explained that a large consultancy firm could take up the advisory work and then partner at the infrastructure level. But this will all depend on certifications and up-skilling within the ecosystem.
“Part of this is also partners evaluating what the role of AI is within their own organisations,” Fox queried. “We’re going through that process now as a business – you have to examine those different components.”
As new skills and new players flood the market, a core base of Dell partners are already stepping up to the AI plate in Australia, namely Data#3.
“AI is everywhere and that pushes us to think about how we drive further use case development for our customers,” said John Tan, Chief Commercial Officer at Data#3.
Aside from widespread Microsoft Copilot uptake, Tan assessed that businesses in Australia are navigating the AI journey at a steady pace with adjacent opportunities emerging in parallel.
“We’re delivering AI across data centre technologies and the ecosystem element through Dell is helping us build AI use cases and insights,” Tan added. “We’re at the start of this curve but we’re well-positioned through our end-to-end portfolio.
“We have the full capability from consulting through to selling the solutions, supported by services. From the client side, the possibility of changing the productivity of individuals from the edge all the way through to the cloud is endless – we’re excited about the use cases that are not yet even developed.”
Another partner leading the AI charge in Australia is Macquarie Cloud Services, recently recognised as the Global Alliances Engagement Partner of the Year across Asia Pacific and Japan (APJ) with Dell.
“Within our own business, we’re working hard to identify applications for AI that can help us become more efficient and better serve our customers,” noted Jonathan Staff, Head of Private Cloud at Macquarie.
“We’ve got examples around LLMs helping us to respond to complex tenders, as well as enhancing predictive analytics around log ingestion in security.”
Aligned to a “pragmatic philosophy” on the ROI generated by AI, Macquarie is also being put to work by a customer base intent on building “the right foundations” to maximise such technology. In partnership with Dell, the data centre provider has been collaborating with Collaboro – a Sydney-based digital asset management specialist – to navigate the future of AI adoption.
“We’ve created a cost-effective, scalable, private cloud infrastructure that ticks all of Collaboro’s boxes,” Staff added.
“They were processing petabytes of data so we built AI tooling around natural language search to pull up digital assets which is helping their customers become much more efficient around how they produce content.”
In short, Staff suggested that foundation infrastructure for AI is akin to Maslow’s Hierarchy of Needs – as an enterprise version.
“How can you focus on doing clever things with your data if your house is burning down around you?” Staff questioned. “We specialise in AI-ready infrastructure-as-a-service offerings.”
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