Analysis: Is Victoria stealing New South Wales' ICT crown?

On paper

According to a March study by Access Economics, commissioned by the NSW Government, the state is at risk of losing ICT business to the more aggressive tactics of its Southern neighbour.

Access Economics noted the risk of "increasing interstate competition, from Victoria and Queensland in particular, to attract more ICT industry to their states."

Sources have told iTnews that even one of the largest software companies in the world, currently based in Sydney, is actively scoping the Melbourne property market.

Lenders told iTnews last month that Victoria "isn't just competing with New South Wales and Queensland" but is chasing the big international tech investment dollars.

The Victorian Government is "taking action", he said, to attract business investment.

But Victoria has some way to go to steal the crown from New South Wales.

According to the New South Wales Government, the state boasts 43 percent of Australia's ICT industry, employing 155,000 people versus 87,000 in Victoria.

The list of global IT companies based in Sydney is long and illustrious - Google, Optus, SAP, Microsoft, IBM, Fujitsu, Oracle, CA, Citrix, Intel, Cisco, Alcatel-Lucent, Avaya, Cisco, Dell, Canon, CSC, Fuji Xerox, Epson, HDS, Logica, Nortel and Unisys among them. The New South Wales Government contributes $5 million a year to National ICT Australia (NICTA), and contributes its resources to several ICT centres of excellence.

While Victoria will have 425 staff in NBN Co's NOC, the company's North Sydney corporate office has some 3,000 square metres at its disposal - enough room for around 300 staff should NBN Co choose to fill it.

Which is the right approach?

Chris Goldstone, managing director of data centre developer Strategic Directions said that beyond the level of state governments - individual regions have varying "appetites for infrastructure."

Some regions, he said, have made a conscious effort to put together a digital economy strategy and are actively open to opportunities.

Others either "don't see the value of digital infrastructure" or "have bigger issues to solve that aren't related to IT."

But Bevan Slattery, who will next year quit Pipe Networks to start his own data centre building business, NextDC, believes the tide is turning in favour of the IT industry.

"There seems to be a fair bit of interest in various state governments to attract substantial infrastructure development, particularly in areas of technology," he said.

To Slattery, the prospect of a tax rebate or cash incentive is lower down the list than any help a given government can provide to stand up the investment in the first place.

"The things that would be attractive to me are the help a government provides - help to get a better understanding of the market we are looking to invest in, information that will help us make an investment decision, or introductions. A small tax rebate or cash payment is nice, but whether the business will be successful is the overriding reason for any investment decision."

What is your experience with investing in New South Wales versus Victoria? Are tax deductions or cash handouts the right incentive? Have your say below...