Additionally, 37% of organisations claim they need at least one day or more to become fully operational again, and on average organisations suffered from two days of downtime. These findings highlight the need for backup transformation from antiquated technologies that are not suited for today’s data growth or availability expectations. A move to next-generation backup and recovery solutions ensures continued business operations in the event of a natural disaster, malicious activity or more routine and common disruptions to IT systems.

Commissioned by EMC and conducted by independent research company Vanson Bourne, The Disaster Recovery Survey 2012: Middle East, Turkey and Morocco looks at the maturity of backup and disaster recovery strategies in the region, in order to understand how backup transformation can help companies to prevent data loss and systems downtime from a variety of causes, including ordinary IT failures to more extraordinary incidents.

Survey findings

Disruption happens: downtime and data loss more likely from an IT problem than a natural disaster

The research shows that the main causes of data loss and systems downtime are the failure of internal IT systems and disruptions caused by malicious activity. The three most common causes of data loss and downtime are:

1.      Hardware failure: 55%

2.     Software failure: 40%

3.     Security breach: 36%

This compares to just 13% of respondents citing natural disasters as a cause of systems downtime or data loss.  In response to such incidents, improving security is seen as key with 44% of businesses having improved physical security and 43% digital security, this despite the fact that security breaches were the third most common cause of data loss and downtime.

Meanwhile, 37% of respondents stated that they have reviewed and changed procedures for IT systems backup and disaster recovery following an incident.

Furthermore, 29% of organisations increased their spending in backup and recovery after a disruption.  This is against a backdrop where 34% of organisations surveyed did not feel they were spending enough on backup and recovery. On average, the research found that businesses across the region are spending on average 7.48% of their IT budgets on backup and recovery.

Economic impacts: Lost revenue attributed to systems downtime 

The study identified that there are measureable business impacts from systems downtime, with the top three cited as:

1.      Loss of employee productivity: 43%

2.     Loss of customer confidence/loyalty: 37%

3.     Loss of revenue: 28%

Systems failure resulted in, on average, nearly two lost working days for each of the businesses in the survey. Based on an average eight hour working day, this is the equivalent of 32,000 man-hours lost for a company employing approximately 2,000 employees. Additionally, each organisation lost an average of 133GB of data during a 12 month period. Given that one MB of data is approximately the equivalent of 25 email documents in size, losing 133GB of data would be the equivalent of losing 3.325 million emails.

The research has also highlighted that businesses are not protecting valuable customer data, with only 23% having a disaster recovery plan in place for CRM applications. Only 22% of organisations who have a disaster recovery plan stated that they would need CRM applications to be up and running immediately following a downtime scenario, despite the fact that customer confidence was ranked as the second most important impact of downtime.

Businesses in the Middle East, Turkey and Morocco are also failing to take advantage of insurance premium benefits that a comprehensive disaster recovery plan can engender. 44% of companies across the region are obliged by either insurance policies or regulatory requirements to have a disaster recovery plan in place. More importantly, however, 25% of the organizations surveyed, are offered reduced premiums by their insurance provider according to the strength of their IT systems backup/disaster recovery strategy.

However, 57% of the organisations surveyed did not know if their insurance provider offered such reduced premiums – or they had never considered it at all – highlighting a missed opportunity for many businesses.

Outdated solutions: 52% still depend on tape for backup and recovery, but the majority of businesses want to get away from tape

For backup and disaster recovery purposes, 52% of companies surveyed still rely on tape. Looking at the operational cost associated with tape, organisations in the region spend on average more than USD 84,400 per annum including transportation, storage, test and replacement of tape for the purposes of offsite disaster recovery. Yet, the trend indicated in the survey is that 73% of companies are looking to move beyond tape.

The top three reasons cited for this planned move are:

1. Faster backups : 55%

2.Increased security: 39%

3.Speed of data recovery and system restores: 36%

Beyond tape, 48% of companies still rely on the outdated CD-ROM for backup storage for disaster recovery purposes. Currently, only 41% of businesses in the region are using modern, disk-based backup and recovery solutions.

Preparedness for routine disruption or more significant incidents starts with a next-generation backup approach that leverages disk with data deduplication and network based replication technologies. The survey shows the reaction after disruption is to spend more on backup and recovery, but the damage is done in terms of time and money during a downtime as well as longer term damage to customer loyalty.

By raising the visibility of the most common problems facing companies today and the associated economic consequences, organisations can proactively review  their own strategies for backup and recovery to ensure they can meet business requirements.

“It is clear from these results that businesses need to be just as aware of the disruption that can be caused by everyday failures as well as by malicious activities and larger scale disasters. Regardless of the causes of IT disruption, businesses need to be certain they have the right systems in place to react quickly and ensure their operations are not affected for long,” said Said Akar, District Manager for South Gulf, EMC.

Focusing on the UAE, the research revealed that 78% of companies surveyed in the region are not very confident they can fully recover their systems or data following downtime.  Additionally, 63% of businesses in the UAE reported having experienced data loss or systems downtime in the last 12 months, with 43% citing hardware failure as the leading cause.

The major impact of data loss or systems downtime on UAE businesses was given as a loss of employee productivity by 37% of respondents. While only 36% of businesses in the UAE are using disk-based storage, 46% are still using tape. However, 75% of organisations would like to move away from using tapes for backup, with 59% citing faster backups as the key reason for doing so.

Industry focus summaries

Public sector

Within the public sector, 64% of organisations reported experiencing systems downtime or data loss over the past 12 months. While only 37% of public sector organisations who have lost data have done so due to a security breach, the sector is the most likely to have seen a loss of employee productivity as a result of data loss or systems downtime, with 59% of organizations recording this. Additionally, the public sector is most likely to lose customer confidence or loyalty as a result of data loss, with 48% of public sector respondents admitting to such incidents.

Finance sector

Within the finance sector, it is notable that only 22% of businesses surveyed believe they are currently not spending enough on backup and recovery. While 69% of businesses to have experienced data loss within the sector stated that they had experienced it due to security breaches, the financial sector also reported hardware failure as a major cause of systems downtime, with 68% of respondents having had experience of this.

Survey Methodology

For The Disaster Recovery Survey 2012: Middle East, Turkey and Morocco commissioned by EMC, Vanson Bourne interviewed 1,000 IT decision-makers in private and public sector organisations across the UAE, Morocco, Turkey, Saudi Arabia and Qatar. Each organisation ranged between 250 and 3000-plus employees and represented a variety of industries including manufacturing, retail, financial services and telecoms, among others.

According to the survey the composite Business Confidence Index (BCI) for Dubai stood at 120.5 points in Q1 2012, indicating an optimistic outlook for the next quarter. BCI crossing 100 points is seen as indicative of a positive sentiment within the business community.

A majority of businesses in Dubai foresee sales increasing, or remaining steady, and plan to retain their employee count through to the second quarter. The survey also reveals an even brighter outlook among export-related businesses, rising confidence among SMEs and a stronger investment focus on upgrading technology.

His Excellency Sami Al Qamzi, Director-General of DED, commented: “For a businessman or investor planning his next step, it is important to know what his peers think. Particularly in a competitive business hub like Dubai, where intelligent and informed decision-making can make a big difference, it is critical to understand that thought process and its key drivers.”

Al Qamzi added: “The Business Confidence Index of DED provides a reliable source of information on the trends and expectations ruling business and investment in Dubai. All categories and sectors of business are included in the quarterly surveys to make the index a comprehensive and authentic reference.”

Continuing the trends of the last few quarters, sales are forecast to increase in the next quarter too, driven by sales volumes. However, a few companies intend to raise their prices following the rise in the cost of raw materials across global markets.

Higher sales revenues are predicted by 50% of the companies, while 35% see no change compared to Q1 2012. Profit expectations are also positive, with 44% of the respondents expecting an increase in the next quarter.

The survey showed manufacturing as the most optimistic sector, with positive outlook extending across all key parameters (sales volume, selling prices, profits and employees). The service sector is close behind, while trading has a comparatively lower overall outlook. In addition, exporters in Dubai were seen to have a more positive outlook on sales performance, new purchases and profits, compared to non-exporters.

Even though expectations are similar on sales volumes among SMEs and their larger counterparts, large businesses are more optimistic about profits for the coming quarter. Large businesses are also relatively more positive on the employment outlook.

On an overall basis, the outlook for employment continues to be stable, with 74% of businesses expecting no change in their head count in Q2 2012. However, manufacturing and service firms plan to increase their workforce in the coming quarter.

Positive expectations on sales volumes have also ensured that 45% of businesses will step up their purchases, mainly to replenish stocks for the upcoming Dubai Summer Surprises (DSS) and Ramadan season. Among manufacturing firms, 55% plan to increase their purchase orders in the next quarter, followed by trading (48%) and service (41%) firms.

Within manufacturing, sales expectations are high for the metal fabrication, plastics and furniture segment. Meanwhile, in the services sector, such expectations are driven chiefly by professional services, transportation, information technology and telecommunications. Transportation and logistics companies seem to be buoyed by expectations of improved cargo movements during the Ramadan-DSS period.

The hospitality sector has factored in a slowdown during peak summer but the retail sector expects to stay on course through promotions and discounts. The construction sector has relatively rising hopes for the next quarter, with 48% companies expecting an increase in orders from the anticipated resumption of stalled projects.

Compared to the last quarter, the current survey shows a higher number of businesses planning to invest in technology upgrade. Key challenges cited by respondents include government fees and charges, insufficient demand, uncertainty on business regulations and high domestic or international competition, in that order.

The DED conducts the quarterly surveys to measure the perceptions of the business community and capture the business outlook for the future. The survey serves as a tool for measuring the pulse of the business community and allowing the government and the private sector to track and analyse major trends and issues that have a bearing on business in Dubai.

A total of 500 companies in Dubai, including SMEs, were covered in the quarterly survey conducted between January and late March this year. The companies were asked to indicate if they anticipated an increase, decrease, or no change in key indicators, such as sales revenues, selling prices, volumes sold, profits and number of employees.

Conducted in collaboration with the  global consultancy firm Dun & Bradstreet (D&B), the quarterly survey adopts a scientific sampling approach that ensures adequate representation of SMEs across the manufacturing, trading, and services sectors, while  giving due attention to  the perceptions of the exporting firms in Dubai.

The results from Visa’s Visa Vue Travel Data showed that the total inbound Visa card spend in the UAE between the 5th of January and the 5th of February 2012, came to more than USD 497 million,compared to just over USD 406 million during the DSF 2011 period (20 January to 20 February, 2011) – equal to a year-on-year increase of 22%.

The event got off to a flying start from the very beginning, with spending for the first week hitting a high on the 6th of January, when USD 19 million was spent on overseas Visa cards. The good news for retailers is that spending continued at a positive pace right throughout the DSF period, with sales reaching a peak on the 29th January when they topped USD 20 million, over USD 5 million more than the USD 15.5 million average daily spend during overall the DSF 2012 period.

The statistics also revealed that cardholders from Russia, Saudi Arabia and the United States were the top-spending countries during the DSF 2012 period, contributing more than USD 122 million, USD 106 million and USD 92 million respectively to the UAE economy – with each showing significant increases in spend compared to the DSF 2011 period.

“Other retail” came out on top of the merchant category, with more than USD 171 million spent during the month-long event. “Lodging” (hotels and apartments) came in second place with over USD 112 million spent; while “remaining merchants,”‘other travel and entertainment’”and ‘”department stores” completed the top five spending segments, with over USD 89 million, USD 35 million and USD 17 million spent respectively.

“It’s great to see DSF 2012 having such a strong impact on the local economy, despite the current global financial challenges,” said Karim Beg, Head of Regional Marketing for Visa for Middle East and North Africa (MENA). “Over the years, DSF has really helped put the UAE on the map, attracting visitors from all over the world to take advantage of the great promotions on offer. This year’s success proves yet again the ongoing popularity of the shopping festival, and of the UAE as a leading international shopping destination.”

Visa has sponsored the leading shopping and entertainment event since its inauguration in 1996. As the official payment partner of DSF, Visa has the ideal platform to educate shoppers about the convenience and security of electronic payments while simultaneously rewarding them with value added prizes. As part of this year’s activity, Visa ran a series of promotions giving cardholders the unique opportunity to attend the upcoming London 2012 Olympic Games this coming summer.

Ratcliff observed that another key learning from the summit was that prepaid linked to advent of mobile and digital technology usage.

Francesco Burelli of Value Partners Management Consulting, a global player on mobile and payment technology, confirmed that mobile is key to prepaid growth worldwide and emphasised that Middle Eastern countries could play an essential role in driving this development.

Burelli said that mobile payments were bound to thrive in the Middle East region where average mobile penetration is over 120 percent, one of the highest in the world.

“Almost 40% of the region’s population is below 19 years, and 70% of total population is unbanked, which makes the region a hotspot for prepaid growth.” he said.

Travel and foreign exchange products also emerged as another segment for high growth in prepaid, according to experts.

Ibrahim Ahmed, Head of Prepaid Cards & Electronic Payments, Al Fardan Exchange said: “Dubai is the hub and first touch-point for international travelers; in fact the Dubai International Airport connects to over 220 destinations across six continents on more than 150 airlines.

“Passenger numbers were an estimated 51 million by the end of 2011 and set to reach 98 million by 2020; therein is a huge opportunity for travel prepaid cards.

Mohamed Moussa of research house TNS MENA agreed on the massive potential of travel prepaid, especially among outbound tourists and travelers.

TNS MENA presented exclusive research that showed almost 80 per cent of UAE-based travellers used cash while travelling internationally; the right product could convert them into prepaid users.

Experts called for more efforts on prepaid education and awareness

The call for more education among consumers and stakeholders came from both the speakers as well as delegates. Almost 36% of prepaid providers voted for education and awareness as a crucial factor for successful launches, in a delegate poll conducted on-site.

Consumer education was considered an even bigger concern by mobile prepaid providers.

A quarter of the delegates felt that lack of consumer awareness could be a major hindrance while close to half felt that stakeholders including banks lacked the necessary awareness on construct a successful mobile prepaid product.

“Prepaid is a low cost and efficient payment mechanism but education of consumers and stakeholders is one of the key issues that need to be addressed,” said Kunal Bist, Director of Treasury and Trade Solutions at Citigroup Global Markets.

Bist further added that changing the mindset towards prepaid should be a priority for all providers.

Ratcliff says this extends to banks, who are currently not taking full advantage of their position in the prepaid value chain. “Banks are currently issuing prepaid products across the Middle East, and it is the right time for programme managers to be given more freedom to develop new and innovative products.

Ahmed, agreed to this sentiment and also stressed on the need of clear regulations for stakeholders

“Awareness will definitely drive the success of prepaid cards penetration and usage. At the same time clearly defined rules by respective Central Banks will enable banks and financial institutions (like money transfer companies) to accelerate the prepaid market to its true potential,” he said.

Innovation and value for consumers will bring revenues and consumer confidence

David Parker, CEO Polymath Consulting, a leading card expert emphasised that the success of prepaid programmes depends on a winning combination of innovation and value for consumers.

Parker said that prepaid must be multifunctional, easy-to-use, and offer safety, security and control spend in order to become a winning revenue generating product.

He further called on prepaid providers to lead this innovation. “Providers must be willing to match consumer’s expectations of ‘value in prepaid’ and not push their own agenda,” he said.

“Innovation comes in all shapes and forms, it could be multi-currency cards, a lifestyle enabler, multi-purpose travel prepaid and so on. The providers must step up; think of ways to engage consumers with a compelling reason to convert to prepaid.”

David Parker, CEO Polymath Consulting and Francesco Burelli of Value Partners Management Consulting with experts discuss the challenges in regional prepaid market

Decision makers of region identified prepaid opportunities in on-site voting

- Over 96% of delegates have plans to launch prepaid products in Middle East.

- 26% of providers believe mobile prepaid is a massive opportunity while 21% felt that remittance prepaid has huge potential. Government payroll, (14%) travel and gifts (7% each) were also considered to be big potential segments.

- Almost 20% of delegates confirmed that launching a Virtual prepaid product was on their immediate agenda while another 20% have plans to launch a new remittance product.

- Close to 12% of delegates confirmed that a general purpose and gift prepaid product offering was on top of their expansion strategies for the upcoming year.

Ratcliff concluded said that the Summit agenda of case studies on Building a successful prepaid product and insight in How to generate revenue from prepaid was well received by all in attendance.

The third edition of Prepaid Summit: Middle East 2012 concluded in Dubai on March 21^st with Visa International on-board for the third time in a row as the Summit’s Title Sponsor.

As the first country in the region to launch “Connect To Learn,” Djibouti will introduce the project as part of the Drylands Initiative, which was initiated to address the deepening humanitarian, economic and security crisis of pastoralist communities and encompasses eight sites across six countries.

“We are looking forward to start working on getting the project off the ground in Djibouti,” said Abdulrahman Mohamed Hassan, Djibouti Telecom’s CEO. “With Ericsson’s expertise and the strong commitment and involvement of governments at the regional and national level, including a ministerial-level working group, I’m sure the initiative will successfully bring connectivity to rural communities and help them achieve their educational goals.”

The project will focus on bringing the benefits of connectivity to secondary schools in the country using the power of cloud-based technology, specifically PC as a service.  It will also use the knowledge and experience of the Djibouti Government and the Earth Institute to implement information and communications technology (ICT) in three secondary schools in resource poor settings to enhance the quality and access to teaching and learning resources in a safe, cost-effective and user-friendly way.

Anders Lindblad, President and head of the Middle East region at Ericsson stressed that “The ‘Connect To Learn’ initiative, serves as a powerful demonstration of the role ICT can play to bring connectivity and efficiency in education.   Reinforcing our commitment to use technology for good in a networked society, this initiative and partnership with Djibouti Telecom enables students in Djibouti to unlock the key to access the worldwide library of information and content on the web.”

BrazArtis, an import-export company based out of Brazil, today launched a new array of organic coffee catering to the coffee enthusiasts in the Gulf Region, this includes gourmet green, roasted and freeze dried coffee.

With about third of the world’s production, Brazil is the largest producers of coffee. It is estimated that it will reach between 48 and 52 million 60kg (132-pound) bags in 2012, up by 20.2% compared to last year’s production which has reached an estimated 43 million bags, according to CONAB. The production of Arabica coffee represents about 74% of national production, roughly 36 to 39 million bags.

“Brazil’s vast landscape offers various types of splendid coffee beans, as they are planted in diverse micro-climates within separated growing region. When taking organic coffee into consideration, it comprises top quality coffee grains, and consequently offers unsurpassed taste and aroma. With a vast line up of green coffee beans as well as processed coffee, we are passionate about offering our clients with top quality taste and fragrance.” – said a spokesperson for BrazArtis.

BrazArtis’ scope of operations includes green, gourmet, freeze and spray dried coffee. The endeavour to expand organic coffee exports to the Middle East is aligned with the continuously growing demand for organic products.

From left to right: Rashed Ali Al Ansari, General Manager of Al Ansari Exchange, and Chandra Prasad Dhakal, Executive Chairman of International Money Express

Al Ansari Exchange, the UAE’s largest exchange house network that provides worldwide remittance and foreign exchange services, has announced that it has recently signed an agreement with International Money Express (IME), Nepal’s leading money transfer company, offering remittance services to Nepal through “Cash Express” service. Al Ansari Exchange will facilitate remittance transactions through any of its more than 110 branches across UAE, while recipients can receive the amount through more than 1,800 outlets of IME in Nepal.

Emerging demand

Business and consumer interest in cloud IT services has increased over the past year. Despite the occasional security and continuity setbacks, cloud IT offerings—whether through publicly accessible services, privately gated services, or hybrids—are on the rise, particularly for corporate customers.

On the consumer side, this development has just begun. Companies are creating more and more services—some as simple as basic file storage—to satisfy the rising demand from residential customers for cloud services. Most prominently, Apple recently launched its iCloud offering with a huge burst of marketing.

These efforts are geared toward meeting consumers’ rising demand for space to store and share their growing amounts of data and to be able to access that data across an ever wider variety of devices.

Most SmartPhones currently provide 16 to 64 gigabytes of data storage, enough to hold the great majority of most consumers’ music, pictures, and application data, along with a reasonable number of video clips. As the amount of content owned by consumers continues to multiply, their storage demands will also grow, as will the storage capacity of their devices. By 2020, individual smartphones will most likely offer as much as several hundred gigabytes of storage.

Unsurprisingly, consumers are already demanding the right to consume all of their media across all of their devices, from anywhere and as seamlessly as possible. But the sheer amount of data they hope to store and share will make it increasingly difficult to maintain identical sets of data across all devices.

“Merely synchronising the many devices each household owns will become hopelessly impractical. Already, the dormant demand for cloud storage is two to five terabytes, and it will likely increase ten-fold over the next ten years,” said Bahjat El-Darwiche, Partner with Booz & Company. “If that exponential growth continues, consumers will seek one of two solutions: keeping files on devices at home, with all the cost and complexity of maintaining the necessary hardware, or moving them to outside, cloud-based servers, which would be easier to maintain, and probably more cost-effective.”

In the long run, the only viable alternative will be the cloud—both for storing all this data and for making it available on the many devices on which people expect to be able to access it, from anywhere, at any time. To be sure, the cloud solution requires that a broadband network is available and that the data can be stored on a reasonably reliable and secure cloud service. But that’s exactly where the opportunity for telecom operators lies.

Given the level of demand, and the sheer volume of data that will need to be stored and sent around, the market for low-cost consumer cloud storage will explode in the next several years. We expect that managing this data volume across multiple devices and networks will substantially affect the entire structure of the whole communications industry—not just the storage infrastructure but the broadband data networks as well. What will this new market look like, and who is most likely to benefit?

A range of service providers

Until recently, the primary market for cloud computing was the corporate world, where data centres and cloud services have already become rela­tively common.

In 2010 and 2011, cloud services began to proliferate for consumers, starting with sites for posting and sharing videos and photographs, and then moving to documents and proj­ects (including places for children to post and collaborate on schoolwork). These services are evolving rapidly now, as a variety of companies—large players like Apple, Microsoft, and Google, and smaller, niche firms such as Dropbox—begin to offer consum­ers a range of online services.

Consumers looking just for storage solutions can create their own private cloud at home, through one of several possible hardware options. Previously reserved for high-end mar­kets, network-attached storage (NAS) systems have become increasingly common, particularly as consumers migrate from desktop PCs to note­books and tablets, since without a desktop computer, there is no natural place for large amounts of storage at home. The simplest options involve hard drives attached directly to the router that distributes broadband throughout the home.

Installing and provisioning a full-fledged stand-alone NAS system, however, is likely not an option for most customers. Such systems require additional backup in case of failure, and accessing the data when not at home requires a robust household broadband connection and relatively complex setup procedures. Some consumer-oriented companies provide solutions; for example, Apple’s Time Capsule and video-sharing pro­grams, built into its operating system, automatically maintain a hard-drive backup and device-to-device synchro­nisation, keeping track of terabytes of data with minimal attention.

But Time Capsule, too, requires some knowledge to set up. Moreover, as computers, tablets, and smartphones proliferate, many consumers will lack the skill and time required to main­tain, in effect, a complex home-based data server system for their families. And just the power needed by a NAS system may cost as much as 200 a year.

Local versus global delivery

The market dynamics of cloud infrastructure, the network of hardware and connections that gives people access to storage, are quite different from those of cloud services—the range of services and software that people use when online. Thus, the race to provide consumer-oriented cloud infrastructure and services will lead to a separation of the two and a restructuring of the entire cloud computing industry.

“This separation can be traced to the essentially different means by which services and infrastructure will need to be scaled up. Cloud service providers primarily offer the software that is visible to consumers as they manage their use of the cloud, with the underlying infrastructure typically hidden,” said Dany Sammour, Senior Associate with Booz & Company. “Because software by nature can scale up quickly and globally, these providers can operate in very specific niche environments, offering specialized services to relatively narrow groups of consumers living around the world—and maintain quite profitable businesses as a result.”

Cloud infrastructure providers face a very different challenge. As the demand for cloud storage rises, and the business becomes increasingly commoditised, prices will drop quickly. Companies hoping to compete in the cloud storage market will need to massively and rapidly scale up their data centres to maintain a competitive cost structure.

Among the requirements will be optimized data centers greater than 10,000 square metres each, dedicated solely to low-cost storage, and co-located with the broadband network infrastructure for maximum performance. Providers must be able to continually expand and optimise every aspect of their operations, from manpower and maintenance to the sourcing of equipment, space, and power. As storage increases, capital expenditure will continue to grow, totalling several hundreds of millions of dollars for a typical mid-sized operator.

In this environment, a critical question arises: Which players will be able to scale up their infrastructure offerings to the size required, and will it be a local or global scale game?

Operators’ right to win

“Should operators enter the cloud infra­structure space? The answer is largely dependent on whether they can define for themselves a clearly articulated way to play and defend their right to win by developing a strongly differentiated set of key capabilities in this domain,” said Sammour. “Already, some operators have dem­onstrated that they can combine their network transport capabilities with cloud service provisioning to differenti­ate themselves from cloud infrastruc­ture and service providers that operate independently of the networks.”

In addition to their technological advantages in combining their networks and cloud infrastructures to offer higher quality at a lower cost, operators could also bring to bear their deep understanding of the local market and customer base. They have an established billing relationship with their customers, allowing them to adapt their offerings to different segments to secure customer satisfaction and retention.

Indeed, operators typically know how to segment and address their customers, they have a good reputation for managing large-scale secure infrastructure, and they can flexibly adapt to local legislation and regulation.

Overall, the combination of cloud and network infrastructure management with a good understanding of the customer and the local market situ­ation gives operators a clear right to win in offering consumer-centric cloud infrastructure.

Executing the way to play

Network operators need to move fast and be decisive in defining their optimal way to play in the cloud. How they do so will ultimately depend on their market footprint, geography, network infrastructure, and customer base.

“They must also be specific in defining a way to play that gives them a clearly articulated right to win. The way to play for an incumbent national operator will differ from that of a mobile low-cost challenger. The value lies in building a coherent, differentiated set of capabilities and getting the timing of the scale-up right, a choice that will depend greatly on how well a player understands its local markets,” commented El-Darwiche.

- Operators should begin by assum­ing that very few cloud service providers will be willing or able to take the risk to scale up their own cloud infrastructures to the degree required. They need to take a three- to five-year perspective in building their scal­able cloud infrastructure. Then they have to be ready to open this cloud infrastructure and operating model to third parties based on well-defined open interfaces.

- Operators must also clearly differentiate their consumer cloud offerings from any corporate public cloud services. They need to offer retail customers a simple user interface, easy-to-use consumer-oriented processes, and personally tailored service levels, all integrated with some social network services. For many operators, this will mean investing in (or acquiring) interface and design capabilities that they have not needed in the past.

- Operators must invest in up-selling capabilities for their cloud infrastructure that will enable them to add revenue per month to their existing revenue base for some 10% to 20% of their key custom­ers, while selling more incremental services to the remaining customer base.

- Operators need to be ready to scale up their offerings to tera­bytes of storage for millions of users, if required, while maintain­ing an attractive cost structure throughout the scale-up. This will require investing in substantial operational capabilities in scaling up cloud infrastructure.

- Operators need to get the timing of the scale-up right. Then they must make sure they have the strategic suppliers in place to ensure access to additional hardware, space, power, and the like. And finally, they must be able to design their data centres to achieve the lowest possible operating cost.

The burgeoning market for consumer cloud services presents operators with a significant growth opportu­nity. To gain a clear right to win in the residential cloud space, however, they must combine their cloud and network infrastructures in a differ­entiating way and with a focus on their specific geography, markets, and related customer segments. And they will have to carefully define their specific way to play in this game. In doing so, they must develop clear answers to the following questions:

- When should I invest in cloud infrastructure, and to what extent?

- How can I best leverage network infrastructure together with the cloud?

- On which segments should I focus initially, and in the long run?

- Which services should I provide on my own, and with whom should I partner?

- Which capabilities do I need to invest in and develop?

- How can I best interact with a wide range of third parties?

Click here to download the PDFreport by Booz & Company.

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Doha, Qatar. Crowds gather at the International Exhibition of Internal State Security 

The region’s most influential trade exhibition dedicated to internal State security – has announced  that its ninth International Exhibition of Internal State Security will take place on October 8-10, 2012, at the Doha Exhibition Centre in Qatar.

Milipol Qatar, co-organised by the Ministry of Interior of Qatar and the France-based Milipol organisation since 1996, welcomes every two years industry professionals from the Middle East, Near East and Asia. A leading international event, Milipol Qatar is the technological showcase for innovative products and services in the public and industrial security sector worldwide, and for companies from around the world wishing to develop their business in and around the Middle East.

The exhibition in 2010 attracted more than 5,500 visitors – from 61 countries – to the stands of 222 exhibitors from all over the world. Participating exhibitors for the event in October are still being finalised – and new, interested parties being contacted on an ongoing basis – but four main themes have been established as being particularly relevant at this time, and these will form the basis of the focus of Milipol Qatar 2012. These themes are: protection of industrial and sensitive sites, law enforcement and crowd management, border control and management, and counter-terrorism.

Qatar has a huge infrastructure development programme going on right now and its economy is booming. Up to $75 billion is earmarked for new infrastructure, public facilities, sports facilities ( the 2022 World Cup), communications and transportation. All of these have security-related requirements.

Internal State and private security opportunities exist in Qatar and across the Middle East as a whole, where the market continues to grow strongly.  October’s event is already seeing much interest from exhibitors and delegates, as well as local, regional and international media.

Developments leading up to the event in October can be followed on twitter @milipolqatar and on facebook at Milipol Qatar.

The health IT market is expected to experience a compound annual growth rate of 24% through 2014, according to RNCOS, a market research company. This overdue investment in IT is aimed squarely at the construction of a long-anticipated information backbone that will support improved care quality and cost reduction through enhanced connectivity and data analysis.

The developing health IT infrastructure, with its host of new applications, is ushering in the most intensely competitive era in the healthcare industry’s history. Charles H. Fine of MIT’s Sloan School of Management used the term “clockspeed” to describe the pace of business evolution within industries. He found that industries with faster clockspeeds, such as computers and entertainment, had higher levels of market experimentation, more competition,and increasingly frequent waves of innovation.

“This will be challenging for the healthcare industry and for insurers in particular, who are used to a much slower pace of change,” said Dr.Walid Tohme, Principal with Booz &Company. “To succeed, they’ll need to look outside their sector for effective business models, and build new capabilities that support rapid product development, a consumer product mind-set and expansion into adjacent markets.”

Healthcare’s Challenge

The leading healthcare insurers will find that IT modernization will either expand their role as information aggregators, making them the primary engine for higher-quality, more cost-effective care or enable new competitors to supplant them. Historically, insurers have not needed a strategy for responding in a fast-paced environment. Repeated waves of consolidation (which oriented insurers toward scale rather than innovation), complex regulatory requirements, the competing incentives and targets of multiple stakeholders, and the slow adoption of information standards have created speed bumps that impede innovation.

As health IT become more connected, precise and prevalent, many companies will have to race to realise its potential. Insurers’ products have already begun to be Smartphone technology that enables faster, more comprehensive data collection. Existing competitors and new entrants will create real-time decision support tools to help providers and patients better manage care. Microsoft, for example, is exploring virtual care delivery. Medical device manufacturer Medtronic has developed Wi-Fi-enabled cardiac devices that allow doctors to remotely monitor and assist patients. Insurers, who currently control claims data and the valuable insights contained therein, will face a crucial point of reinvention as these advances and the companies that field them engage consumers, influence medical utilization and seek a proportional share of the healthcare dollar.

The Amazon Way

Health insurers looking for guidance on how to compete in a fast-paced environment won’t find many examples within their own industry, but they can look to industries where the clockspeed has long been fast and furious, such as online retailing. One excellent model for them to study is Amazon.com Inc. Amazon has built a full-service, seamless vertical approach — including order fulfillment, recommendations and customer service  around its core retail business over the past decade. Simultaneously, it has staked out beachheads in key horizontal platforms, becoming a partner to other vendors through Amazon Marketplace, e-commerce hosting and Web services (home of its cloud computing business). These businesses generate additional revenues that are funneled back into R&D for Amazon’s core business.

“This kind of approach could translate very well for healthcare insurers today, but to make it work, they will have to establish the proper balance between vertical and horizontal integration, and between control and speed,” says Jan Schmitz-Huebsch, Senior Associate with Bootz & Company. They will need a vertically integrated approach that keeps critical components under proprietary control to create differentiation. At the same time, they will need strong horizontal capabilities that can be deployed in fast and flexible ways to help master accelerating product cycles.” For example, insurers that decide to help physicians use EHR [electronic health record] data will need swift application development capabilities. That robust expertise could be deployed in multiple vehicles, such as cloud-based computing to the physician’s desktop or to handheld devices, and for multiple purposes, for example, health analysis or prevention campaigns.

Three Areas of Focus

To compete effectively in a faster environment, insurers will need to develop capabilities that enable them to achieve the following outcomes.

  - Business systems designed for rapid product development

Insurers often serve several customer segments in different regions and provider networks. This emphasis on breadth has contributed to an abundance of uncoordinated technology strategies and a scattershot approach to value chain design. Furthermore, speed-to-market has often seen as commodities in the more consumer-driven post-reform marketplace, where health-insurance exchanges, bundled offerings, greater transparency, easy comparison of features, and lower switching costs will soon be commonplace.

 - A consumer product design mind-set

 Insurers have traditionally maintained market share by locking in networks of customers and providers by relying on strong brand names. But they may be ill-equipped to compete on product features in an environment with low switching costs and intense competition. To succeed in this emerging environment, successful health plans will develop strong brand identities. They will use these brands to better align demand with care utilisation, creating new products (such as one-price care bundles) and designing incentives that shift care to less-expensive channels (such as non-acute care facilities and preventive health programs).

To capture the expected growth in individual and small group markets, insurers will need to sell directly to these groups, manage their experience, and encourage healthy behaviours. This will require more focus on customer engagement, including the support and provision of enhanced interventions and self-care, as well as new service channels.

- Expertise in entering adjacent markets 

Although some insurers may decide to stick to their traditional strengths in core administrative services to insulate them from the faster pace, they are likely to discover that competing on transactions alone has drawbacks. The large-scale system migrations required to significantly improve transaction speeds are both costly and risky. Only a few insurers will achieve the necessary economies of scale, and they will most likely become outsourcing partners for the rest of the industry.

“Instead, most insurers should be looking for areas where there is headroom for growth, such as adjacent markets for care delivery. Products and services aimed at delivering more effective outcomes at lower costs, solving ambiguous clinical problems, and promoting virtual care delivery are rich areas of new opportunity for health plans,” said Dr.Tohme. “Successful plans will consolidate a broad range of platforms, including Smartphones, cloud-based computing, and videoconferencing, to launch care products that deliver greater value. They will also master the art of relationship building and creative collaboration to overcome adversarial provider relationships and consumer mistrust.”

Keeping Pace with Change

Insurers will succeed either by meeting multiple needs within their chosen markets or by realising the full breadth of capabilities in their horizontal niches; over time, they may do both. In any of these scenarios, health insurers will have to design value chains that can deliver successive waves of innovation.

“They must be prepared to quickly generate and launch new products and services, learn, adapt, and repeat the process, if they hope to profitably retain fickle customers who traditionally have not taken a great deal of responsibility for or control over their own care,” concluded Schmitz-Huebsch.

Clearly, existing players won’t be able to depend on their hard-won brand equity. In other industries, established brand names have meant little when the pace of innovation has accelerated (think of Encyclopedia Britannica, displaced by Wikipedia’s open source model). As Charles Fine’s work on clockspeed ultimately concluded, the only enduring competitive advantage is the ability to continuously assess and build value chains that exploit current opportunities and anticipate future ones.