Emerging Technologies: What they mean for SMBs

IDC's Small & Medium Business Roadshow Kuwait 2012

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Agenda
Key Macro Trends
Global & Regional trends affecting business environment

IT Spending & CIO Feedback

Global. Regional and SMB spend IT challenges and priorities

Emerging Trends in the ICT Industry

Four Pillars of ICT Transformation

Winning Strategies
Key Messages and Suggestions

IDC

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Nov-12

Macro Trends

Global Economic Uncertainty

Political instability in MEA

Oil Prices
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Growing investments by ME Governments

Nov-12 3

Middle East IT Spending Comparison

16,000 14,000 12,000 10,000 8,000

6,000
4,000 2,000
CAGR: 9.5%

2011

2016

Saudi Arabia UAE

Egypt

Kuwait

Qatar

Oman Bahrain Jordan Lebanon

IDC

Source: IDC MEA Blackbook Visit us at IDC.com and follow us on Twitter: @IDC

Q4 2011

Nov-12

Kuwait IT Spending from 2010 to 2016

US$m 2500 2,117 1,974 2000 1,666 1,515 1500 1,295 1,372 392 359 179 195 434 216 241 270 1,819 580 530

481
305

335
1000 170 500 789

833

929

1,017

1,097

1,174

1,232

0 2010 2011 2012 2013 2014 2015 2016

Services

Packaged software

Hardware

Drivers Government spending in social infrastructure to drive IT spend Banks & Oil & Gas companies to lead IT investments led by Islamic banking & production capacity expansion respectively
Source: IDC 2012
IDC

Inhibitors Political instability to defer large expenditure

Lack of skills and local players

Nov-12

IT spending in Kuwait by sectors

500.00
450.00 400.00 350.00
Spending in 2011 in US$m

18% 16% 14%

CAGR in % between 2011 and 2016

12% 10%

300.00 250.00

8%
200.00

150.00
100.00 50.00

6% 4% 2% 0%

0.00

IDC

Nov-12

SMB Spending Worldwide & MEA

Worldwide SMB IT Spending Growth Forecast 2011-15
14% 12% 10% 8% 6% 4% 2% 1.1% Japan Western Europe North America Latin America Central & Middle East Asia Pacific Eastern & Africa Europe 4.3% 5.2% 9.4% 9.5% 9.6%

12.8%

0%

GCC IT Spending 2011 by Sectors

MEA SMBs are expected to be the one of the highest spenders in the world
Consumer 27%
SMBs 29%

SMBs constitute more than 99% of the companies in GCC, but account to less than 30% of the IT spending

Enterprises 44%
100% = US$15.13 bn
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SMB Spending in Kuwait

Kuwait SMB IT Spending = US$ 455.2 Mn 2011-2016 CAGR = 10.2%

800 2011 IT Spending USD Mn

SMB IT Spending 2011-2016

138 129 113 99 87 75 153 133 222 238

700
600 500
SMBs 33%

400 300 200 100

173

198

Corporat es 44%

246

276

295

319

340

364

Consum er 23%

0
2011 2012 Hardware 2013 2014 2015 2016 Services Software

IDC

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Nov-12

Challenges Facing CIOs

Key Challenges Facing the CIOs Today in the Middle East
Staffing issues (recruitment, retention and development) Measuring ROI of IT investments Driving innovative use of technology 49% 44% 44% 33% 43% 66% 59%

Maintaining security
Change Management IT Project Control and management Obtaining sufficient vendor support levels Explosion of data storage requirements 26% 23% 24%

36% 40%
45% 40% 49% 34% 43%

Consumerization of traditional IT
Modernization of legacy applications

8%
24% 19%
Source: IDCs Middle East CIO Survey (Jan-Feb 2012) N=88

2012

2011

IDC

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Nov-12

Strategic Initiatives
Top Strategic Initiatives for Next 12 Months

Operational Efficiency

93%

Customer Relationship Enhancement

61%

Cost Optimization

53%

Innovation

53%

Source: IDCs Middle East CIO Survey (Jan-Feb 2012) N=88 IDC Visit us at IDC.com and follow us on Twitter: @IDC Nov-12 10

Key Investments Underway

Technologies Scoped for Projects in 2012
Virtualization (server, storage, network, desktop/client) Business intelligence and analytics Mobility devices and applications Business Continuity and Disaster Recovery GRC Solutions CRM Applications Unified Communications 360 Security Managed Services 59% 43%
Source: IDCs Middle East CIO Survey (Jan-Feb 2012) N=88 IDC Visit us at IDC.com and follow us on Twitter: @IDC Nov-12 11

92% 85% 83%

72% 73% 72%

70% 66%

Cloud Apps and Services

4 Pillars Key Tech Themes

Driving Innovation in 2012

Cloud & Virtualization

Big Data & BI

Social Technologies

Mobility

IDC

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Nov-12

4 Pillars Key Tech Themes

Driving Innovation in 2012

Cloud & Virtualization

Big Data & BI

Social Technologies

Mobility

Virtualization & Cloud

Around 23% of servers shipped worldwide have virtualization, up from 4.5% in 2005

Worldwide cloud IT spend to reach $40.32 billion in 2012, up 32% from 2011.

IDC

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Virtualization Adoption in GCC

Government, Finance, Manufacturing and Communications leading verticals Server environments most virtualized

KSA

31%

63%

6%

UAE

22%

54%

23%

Qatar

39%

56%

6%

OGCC

23%

75%

2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Yes

No

Don't Know
Source: IDC GCC Cloud Readiness Study, 2011

IDC

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Cloud Slow adoption due to lack of awareness

Cloud Adoption among MEA SMBs
16% We are currently deploying / planning to deploy a Private Cloud 11% We are currently utilizing / planning to utilize Public Cloud We are currently deploying/planning to deploy a Hybrid Cloud We have no interest in deploying any kind of cloud environment

6%
67%

Considerable interest in private cloud implementations in the Middle East Telecom operators gearing up to introduce cloud based services
Government implementing private cloud The lack of adoption among SMBs is mainly due to a lack of awareness VIVA Kuwait recently implemented a private cloud solution based on HP technology

Familiarity of MEA SMBs with Cloud

Strong Understanding Familiar

22%

Awareness Gap

36% 27% 16% 0% 20% 40% 60% 80% 100%

Fairly Familiar
No Familiarity

Source: IDC Cloud Study 2012 Nov-12 15

IDC

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Drivers for Private Cloud in the GCC

Drivers for Private Cloud
Cost reduction through improved utilization of shared resources Standardization of ITEfficiency processes

53%

drive

35% 32% 28% 27% 24%

Faster deployment of IT resources

Pricing Advantages Improved security (within the firewall) Visibility into costs Ability to scale up or down on demand

19%
18% 14% 0% 20% 40% 60%

IT headcount reduction
Using cloud to provide business value and innovation

n=87, ranked as top 3 drivers Q: If you are currently using or planning to use a public /(private in case of private) or hybrid cloud deployment in your organization, please select from the list below the reasons for choosing the public cloud model, ranking them in order of importance with 1 as the most important. IDC Visit us at IDC.com and follow us on Twitter: @IDC Nov-12

Drivers for Public Cloud in the GCC

Drivers of Public Cloud
Access to better technology Pay for use model Faster deployment of additional IT resources Lack of physical IT infrastructure Preference for monthly payments over high initial license fees Access to better quality of IT skills Visibility into and management of IT costs Size of organization make (public) cloud services attractive Access to latest/advanced software, techniques Move from CAPEX to OPEX 0% 10%

37% 34% 26% 22% 20%

20% 19% 17% 15% 13% 20% 30% 40%

n=57, Ranked as top 3 drivers Q: If you are currently using or planning to use a public /(private in case of private) or hybrid cloud deployment in your organization, please select from the list below the reasons for choosing the public cloud model, ranking them in order of importance with 1 as the most important. IDC Visit us at IDC.com and follow us on Twitter: @IDC Nov-12

4 Pillars Key Tech Themes

Driving Innovation in 2012

Cloud & Virtualization

Big Data & BI

Social Technologies

Mobility

Big Data & BI

IDC

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Nov-12

Big Data & Analytics

Worldwide digital content volume to touch 2.7 zettabytes in 2012, up 48% from 2011. Over 90% of this information will be unstructured. High competition, varied customer demands, and high data availability SMBs integrating social media functionalities with core applications Converting raw data into information can drive value

Along with growing data is rising security threat. On an average, an organization confronts 5,000 threats in a month

Increasing threats, growing network resources and the changing nature of remote worker access

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4 Pillars Key Tech Themes

Driving Innovation in 2012

Cloud & Virtualization

Big Data & BI

Social Technologies

Mobility

Social Technologies

IDC

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Nov-12

Online Resources
Customers are increasingly going online for before making a purchase 77% population in Arab region below 40 yrs age

9% fixed broadband penetration in Kuwait

Facebook penetration in Kuwait is 32.4%, third highest in ME behind UAE & Qatar eCommerce GCC B2C eCommerce sales to triple to reach US$60bn by 2015 while digital advertising in Kuwait will reach US$61bn a 32% CAGR from 2011 30% of SMBs in emerging markets see online resources(such as social media, ecommerce ) as a major priority WW time spend on social networks rose from 6% in 2007 to 20% in 2011 Online promotion, operations, information gathering and purchasing growing as SMBs step up to increased competition

IDC

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4 Pillars Key Tech Themes

Driving Innovation in 2012

Cloud & Virtualization

Big Data & BI

Social Technologies

Mobility

Mobility
Mobility becoming an integral part of MEA businesses IT strategies Emerging markets will drive mobile device price points way down

IDC

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Nov-12

Mobility
Advent of smartphones, netbooks, tablets, broadband, mobile apps we are seeing increasing consumerization of IT

Support remote workers and alternative work styles

Implememt workflow & customer interaction applications

For SMBs,
Increasing requirement for mobile device integration and management Policies and processes Security measures to prevent data loss Drivers productivity, reduced cost (capex & travel etc) Challenges Security, data leakage

IDC

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Winning Strategies for SMB IT Decision Makers

Align IT to Business Implement IT solutions to support business objectives to build intelligent enterprises

Achieve Efficiency through Cloud

Access latest in IT through public cloud Improve efficiency and reduce costs through virtualization and private cloud

Deploy Scalable Solutions

Plan for future demands now Data demands are on the increase

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Winning Strategies for SMB IT Decision Makers

Grab the Social Media Opportunity Integrate social media functionalities with core applications Create bi-directional channels to engage customers directly

Utilize Mobility to improve productivity

Mobile workflow applications can improve productivity Customer interaction applications can improve customer service

Secure your Systems

Develop comprehensive security strategy to prevent business disruption and data loss

IDC

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