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.

TNS’s annual Mobile Life study – which explores mobile use among 48,000 people in 58 countries – shows the majority of people around the world now recognise the value of sharing their location to benefit from a range of services.

The key findings, released as a set of interactive visualisations show that the services and apps people use vary considerably from region to region (Available at www.tnsglobal.com/mobilelife).

Location-based services move into the mainstream in the UAE

Almost one fifth of the world’s six billion mobile users are already using LBS, with more than three times this number, 62%, aspiring to do so in the future. Navigation via GPS remains the most popular motivation behind the LBS uptake, which currently stands at 52% in MENA.

There is also growing interest in more diverse activities, with 13% of social network users checking-in through platforms like Foursquare or Facebook Places, versus 11% in 2011.

LBS users are increasingly using services to enrich their social lives, with one out of four people in the UAE using LBS to find friends nearby compared to one in five globally. Around a quarter use the technology to find restaurants and entertainment venues, while 19% check public transport schedules and 8% to book a taxi.

Savvy LBS users in the UAE have realised that there is something to be gained from sharing their locations with brands and retailers – with 11.5% sharing their location in exchange for a deal or special offer; almost at par with the global average of 12.5%.

Beyond current users of LBS, globally a third of people who already or would like to use mobile voucher schemes, highly rate receiving deals when they are nearby a store that they like.  One in five mobile users stated that they find mobile advertising interesting if it is offering them a deal near their current location.

Steve Hamilton-Clark, CEO of TNS MENA explained that location based services are finally coming of age.

“People are realising that sharing their location often offers some kind of reward in terms of a discount or deal. It is the combination of time and context – directing people towards a deal when they can easily redeem it. This unlocks a powerful tool for marketers to develop targeting approaches,” he said.

A complex map of global use

He noted that while the study has shown an increasing willingness to engage with LBS, there are also significant variations in people’s reasons for embracing the service across different markets.  Of all current LBS users, Latin Americans most use the feature to find friends, with 39% stating it as the top reason to share their location, compared to 24% in the UAE.

“There a regional variations on what prompts the desire to engage and these highlight the importance of having a targeted strategy when it comes to location based marketing.

“LBS offers marketers an unprecedented level of engagement and targeting, however it has to be done in line with how people in individual markets want to engage with brands to avoid being intrusive. Where brands get it right, we have seen significant rewards in terms of brand engagement, loyalty and sales,” Hamilton-Clark concluded.

Engineered for the enterprise, HP Converged Cloud extends the power of the cloud across infrastructure, applications and information to provide:

• Choice– through an open, standards-based approach supporting multiple hypervisors, operating systems and development environments as well as a heterogeneous infrastructure and an extensible partner ecosystem.

• Confidence– through a management and security offering that spans information, applications and infrastructure.

• Consistency– through a single common architecture.

HP Converged Cloud brings together  HP Converged Infrastructure, HP Converged Management and Sercurity, Converged Information and hardened OpenStack technology.

“The convergence of cloud computing and mobile connectivity is changing the way infrastructures are built, applications are developed and information is delivered,” said Eyad Shihabi, Managing Director, HP Middle East. “HP Converged Cloud enables enterprises to incorporate a blend of public, private and managed cloud services with their existing IT to create a seamless hybrid environment that rapidly adapts to their changing requirements.”

Research commissioned by HP reveals that organisations are undergoing major shifts in how services are delivered. It also highlights how cloud offerings are increasingly being sourced without IT department approvals.

The survey indicated that almost one in every two enterprises had departments running non-IT-sanctioned cloud solutions, and a full 18% indicated they were unsure. With the projected use of private and public cloud models doubling by 2020, successful organisations will need to find a way to embrace these solutions without adding additional complexity and risk to their environments.

HP Cloud Services will deliver its initial offering, HP Public Infrastructure- as-a-Service, as a public beta starting 10th May. The offering provides on-demand compute instances or virtual machines, scalable online storage capacity and accelerated delivery of cached content to end users. As a result, developers are able to deploy services within minutes and pay only for the resources they use. Also on 10th May, HP Cloud Services will introduce, as a private beta, two additional Infrastructure-as-a-Service offerings: a relational database service for MySQL, and a block storage service that supports movement of data from one compute instance to another.

HP’s new Cloud Maps extend HP’s integrated, open solution by providing pre-packaged application templates that create a customised catalog of application services ready for push-button deployment. Together with HP CloudSystem,HP Cloud Maps can reduce the time to create new cloud services for enterprise applications from months to minutes.

To help test these applications, HP also announced HP Service Virtualisation 2.0. This software offering enables clients to test the quality and performance of cloud or mobile applications without disrupting production systems. This is accomplished by offering access to restricted services in a simulated, virtualised environment.

To address the bottlenecks enterprises often experience when developing new cloud services on complex legacy networks, HP is introducing HP Virtual Application Networks. The solution speeds application deployment, automates management and ensures network service levels in delivering cloud and virtualised applications across the HP FlexNewtork architecture.

To help clients get the most out of these networks, HP is launching two new networking services. HP Virtual Network Protection Service leverages best practices to set the baseline for security at the network virtualisation management layer, which helps to mitigate common threats. HP Network Cloud Optimisation Service helps clients enhance their network to improve cloud-based service delivery by up to 93% compared to traditional download techniques.

For clients who do not wish to manage their own clouds, HP announced new HP Enterprise Cloud Services that provide offerings for private clouds, continuity services and unified communications. By outsourcing cloud management to a trusted IT provider, clients can leverage on-demand usage and pricing models to redirect cost savings to other strategic projects.

To further extend the portfolio, HP also announced the new HP Engineering Cloud Transformation Services that help product development and engineering design teams confidently embrace the cloud to improve productivity and rapidly bring new products to market. In addition, the new Cloud Security Alliance training course arms clients with the knowledgeto avoid potential security implications of cloud solutions.

The Huawei MediaPad tablet has been an instant hit in Qatar with its powerful features that include a seven inch capacitive touchscreen, dual-core processor, Android 3.2 Honeycomb OS, and HD-capable front and rear cameras. The Honor has been one of Huawei’s most popular smartphone devices with its stylish design, excellent display with a 4.0-inch TFT-LCD capacitive touchscreen, and Android 2.3 (Gingerbread) OS.

The U8500 is another feature-packed Android phone that comes with a 3.2-inch capacitive touchscreen, high-speed internet connectivity with HSDPA support, WLAN/WiFi 802.11 b/g support, Bluetooth 2.1 capability, and Android 2.2. The G2800s features FM Radio, Micro SD card support (up to 4GB), stereo headset interface and torch light.

Huawei MediaPad

Ramy Numair, Commercial Director – Devices, iQ, said: “Huawei has been expanding its share in Qatar’s IT market. Informatica Qatar’s extensive distribution network across the country has been a key factor that has allowed Huawei to penetrate various market segments. The new agreement we have signed with Royal Mobile is another important step that will further consolidate our stronghold in the market and bring Huawei products closer to IT consumers.”

Microsoft Open Door will present an opportunity for IT professionals to experience technologies that are not yet available. Attendees will experience a sneak preview of Windows 8, which is not yet retailing. Open Door will also have a special focus on cloud-based solutions where the benefits that Microsoft Office 365, Windows Azure and Windows bring to business and consumers will be showcased.  Other Microsoft solutions that will be highlighted at Open Door UAE include Systems Centre 2012, SQL Server 2012 as well as a range of mobile-based platforms.

“At Microsoft, we place innovation at the heart of everything we do,” said Samer Abu Ltaif, General Manager, Microsoft Gulf. “We are very proud to bring Microsoft Open Door to the UAE in collaboration with our partners. The event will be a great platform for IT professionals in the UAE to experience new technologies that are not yet available in the market. It will also be a great opportunity for us and our partners to showcase a range of soon-to-be-released solutions while addressing the local market requirements from an IT perspective.”

“Dubai Internet City is committed to supporting the growth of the ICT industry and providing an ecosystem that attracts key players into the region. The presence of technology major Microsoft at Dubai Internet City has phenomenally contributed to building the resilience of the industry and driving the region’s positive growth trend,” said Malek Al Malek, Managing Director, Dubai Internet City and Dubai Outsource Zone. “Operational for over ten years at the ICT free zone, Microsoft has attracted a large community of technology professionals and specialists into the region and positioned the country to a global audience. Microsoft Open Door showcases the organisation’s commitment to the UAE. The initiative offers first-hand information, a preview of world class technologies from global specialists, as well as access to professional advice and expertise.”

Open Door UAE is one of five Microsoft experiential technology showcases taking place in the Gulf region in 2012, reaching people across five countries including Kuwait, Qatar, Oman, Bahrain and the UAE.  The strategic partner for UAE Open door is Dubai Internet City and regional sponsors for Open Door are IBM and HP. The UAE edition of the event is expected to gather industry leaders to provide them with the opportunity to experience new solutions and support technologically enabled economic development, in what is quickly becoming one of the fastest growing markets in the region.

“At HP, we are always on the lookout for partnerships and collaborations that efficiently serve our customers and the IT community,” said Alaa Al-Shimy, Enterprise, Storage, Servers and Networking (ESSN) Director, HP Middle East. “Microsoft Open Door presents an opportunity for us to showcase the latest technology and solutions together with our partners and contribute to the growth of the IT industry in the UAE.”

“IT is an essential component to any successful business and with the right mix of solutions and tools, businesses can simply enhance productivity and efficiency in the most cost-effective way,“ said Guy England, Business Unit Executive, IBM Middle East. “We are excited about the partnership with Microsoft Gulf for Open Door and see this platform as an opportunity to connect and engage with leaders from the business [community] in the UAE.”

Google Apps Vault delivers a next-generation archive, retention, and eDiscovery capabilities for Google Apps built on a modern, 100% web-based architecture. Google Apps Vault reduces risks associated with litigation, investigation, and internal and regulatory compliance, and lowers business and IT costs by enabling companies to more effectively manage the information stored in Google Apps. It provides domain-wide search of Gmail and on-the-record Gmail chat, offers and easier way to create systemised, repeatable, and defensible data management policies, and automates legal hold and eDiscovery capabilities to preserve relevant information. Google Apps Vault requires no additional hardware or infrastructure and saves IT costs and resources.

Starting now, customers who sign up for Google Apps for Business can add Google Apps Vault to their Google Apps purchase for an additional USD 5 dollars per user per month. Google Apps Vault adds advanced data management and information governance capabilities to Google Apps with true manage-in-place functionality. Businesses of all sizes can benefit from reduced costs and risks from a more effective ability to manage the information stored in Google Apps.

“Archiving and eDiscovery capabilities are critical for businesses of all sizes to protect themselves and be prepared in the case of a lawsuit,” says Kent Walker, General Counsel at Google.

Google Apps Vault provides unique capabilities including: instant-on functionality, in-place data management with no duplication required, and the security, ease-of-use, and reliability of Google Apps.

Eric Hunter, Director of Knowledge Strategy for Bradford & Barthel added: “Google Apps Vault adds important archiving and eDiscovery capabilities to Google Apps, is a natural complement to Google Apps and allows a seamless integration path forward within the evolving platform.”

Google Apps Vault is now available to new Google Apps for Business and Education customers. If you are a current Google Apps customer you will be able to add Google Apps Vault later in the year. 

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.”

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?

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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.

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The new solution allows small business owners to use HDTV network cameras to help them clearly identify intruders, shoplifters and other incidents. Video can be viewed live and recordings played back from anywhere – on-site or remotely over the Internet. The system supports motion detection and pan/tilt/zoom control. Video clips and snapshots can be exported to colleagues and authorities, and the system supports third-party apps for viewing live and recorded video on leading smartphones and tablets, such as iPhone, iPad and Android.

Unlike analog surveillance installations, Axis Camera Companion does not require a central recording device – a digital video recorder (DVR), network video recorder (NVR), or even a computer. The cameras are powered over the network, eliminating the need for separate power cables. All images are recorded onto a standard SD memory card in each camera, and even if a network fails, the cameras keep recording. This reduces cost, simplifies installation, and makes the system more robust as there is no single point of failure.

The Axis Camera Companion solution consists of three parts: Standard Axis network cameras or video encoders with edge storage support for recording onto SD-cards; a free software client and third-party mobile apps used for viewing live and recorded video; and standard third-party network equipment such as routers, switches, SD cards and NAS devices. Existing analog cameras can be integrated via video encoders.