Features

2015 OUTLOOK

Published

9 years ago

June 11, 2015

admin

Updated : February 5, 2015 00:30 am,
By Editor

The year will likely see continued consolidation of the major trends that have been holding the industry’s interest for the past few years including Big Data analytics, cloud, SDN, IoT, and BYOD

It looks certain that 2015 will see continued consolidation of the major trends that have been holding the industry’s interest for the past few years. IoT (Internet of Things), SDN, Managed services, Big Data analytics, cloud, Mobility and BYOD are among trends that are in varying degrees shaping the changing face of the industry. The fact that when many of these Technologies come together as enablers, there is likely to be a snowball effect and this is precisely the kind of future we are heading towards with these trends in tandem.

Rabih Dabboussi, General Manager, Cisco UAE says, “By 2022, there will be 50 billion devices connected to the Internet. By some estimates, even this is a conservative outlook. Technology has advanced and has become smaller in size, is more flexible and adaptable to different applications and has also gone down in terms of costs. This has driven a tremendous adoption and appetite in introducing connectivity and intelligence to almost everything around us. Businesses will strive to leverage this connectivity and intelligence to differentiate.”

The IoT opportunity is likely to emerge into the limelight over the next couple of years in terms of deployments. From integration to securing the infrastructure that will enable IoT to work, there is potentially a lot of opportunities that the channel will be likely to unearth.

Sabbahuddin Khan, Regional Manager at Allied Telesis Middle East says, “The IoT trend will dramatically increase the number of network-connected entities. Devices that contain sensors, control, or intelligence will increasingly become network connected. IPv6 will gain wider adoption, as will management technologies that are required to manage network-connected nodes. The IoT will deliver benefits for everyone, from enterprises to municipal councils, but it is the value of information and knowledge that will see new players introduced and new business models emerge during 2015.”

As IoT initiatives get off ground, in fact many of the larger projects could be spearheaded by government entities as they enable more public e-services for the public.

Rabih adds, “The next few years are thus likely to be of IoT gaining ground. We got some economists to gauge the value of the IoT economy. The value at stake of the IoT between now and 2022 is $ 19 Trillion. The potential is immense. We took that model and applied to Dubai and the report was about the value at stake between now and 2019 for Dubai’s smart city initiative. It is about 5 Billion dollars.”

Mobility & software drive the future

Mobile device penetration as well as mobile data traffic growth rate in the region are among the fastest in the world. MEA is set to post the world’s highest-growth rate of IPv6-capable smartphones and tablets according to a Cisco forecast. These trends will encourage even wider adoption of wireless access and Mobile Device management as well.

Sabbahuddin says, “The unprecedented adoption rate of mobile devices in the enterprise landscape means that wireless access is now more important than ever, and will continue to be so for the foreseeable future. The technological innovations that the 802.11ac standard is enabling will lead to continuing growth in demand for wireless access products, and will ensure that wireless access has a critical role in unified enterprise network infrastructure. Users will demand pervasive and reliable wireless coverage and seamless mobility. This wireless expansion drives the need for tightly integrated management platforms.”

In addition, the rising prevalence of Mobile workforces will also mean that workers would need better access remotely. That is driving the demand for hyper-converged systems that help manage virtualized infrastructures. Hyper-convergence infrastructure have a software-centric architecture that tightly integrates compute, storage, networking and virtualization resources and other technologies.

Ahmad Qadri, Regional Director for Middle East at Nutanix says, “Mobility has meant that large teams of people have been freed from their offices and are able to work offsite, either beside their customers or from home to increase productivity, customer satisfaction and personnel retention. But the distributed systems needed to support these work environments are driving the uptake of hyper-converged infrastructure at such a pace that even traditional storage area network (SAN) players are reducing SAN production and redirecting IT spend into hyper-converged technology. And it will become even more prevalent in 2015 as businesses look to the IT department to support this new working environment while still keeping equipment and maintenance costs low.”

Therefore he believes that hyper-converged will transition from the ‘early adopter’ phase to mainstream production environment; from test and development to Tier 1 applications.

Nutanix is partnering with Dell globally and have extended that into the region. The Dell XC-series appliance integrates Dell’s x86 server platform (PowerEdge R720xd) and Nutanix web-scale software to provide a solution with enterprise class performance, scalability, availability and data management features.

Basil said, “Web-scale IT is making huge inroads compared to traditional DAS, NAS and SAN architectures. The demand for software defined storage is going through the roof- over delivering on promise. Cost-wise, it is cheaper and performance wise, it is better. Customers are liking it and software defined storage has seen quick adoption unlike SDN.”

What happened in the case of server virtualization is now unfolding with storage and networks. SDN is still in the initial phase of rollout with Telcos testing it.

Basil adds, “It is only now that SDN is beginning to see traction. Telcos are taking the lead. They are testing and that gives confidence to the enterprise segment to take it up. We are therefore now seeing a lot of interest around SDN.”

Legacy network architectures cannot provide the scale that SDN can potentially bring in to the infrastructure which is required especially as organizations move more workloads to the cloud and the workforce become more mobile.

Sabbahuddin adds, “The flexibility in user location and device usage that is becoming the norm in Enterprise IT, as the BYOD concept has taken hold, will drive requirements for more dynamic operation of Enterprise communication systems. Organizations needing solutions to these requirements will increasingly look to SDN as the source of such solutions. The efficiencies to be gained by integration between business rules, user information, and network infrastructure will benefit network administrators and users alike.”

The cloud’s next phase

According to Rabih, the next phase of cloud computing is about optimizing data centres. That will mean moving some of the actual application processing to the edge, i.e., what is being referred to as ‘fog-computing’. The terms Fog Computing, coined by CISCO, refers to computing on the edge wherein data processing and decisions are happening closer to the event location, leaving only more critical decision making to the central cloud locations.

He adds, “We believe the next phase of cloud computing especially when it comes to smart city initiatives and IoT is in fog computing – taking some of the data centre responsibilities and some of the application processes and distributing it to the edge. So instead of centralizing it in the cloud, you do it in the fog which is closer to the user.”

Rabih claims that Fog computing alongside cloud computing will see more adoption in 2015 in tandem with IoT growth.

Elaborating further, he says, “For example, when you are in the parking lot, the access point covering the parking lot needs to cover your location and the density of cars in the parking lot. That access point needs to tell the lights to turn on or off, brighten up or dim down based on number of people. These decisions need not go to the cloud as they can be taken at the edge. You will see processing and many applications taking place at the edge in places like the parking lot, in a street, a mall, a theatre etc. But you will also see more centralizing applications in the cloud as well.”

There is also likely to be great consolidation in the cloud services market. Ahmad believes that the larger players in the cloud service market will get bigger and there will be a scramble for the rest of the market opportunities.

He says, “If it isn’t already, hybrid cloud will become the ‘new normal’ infrastructure solution as more and more organizations realize the benefits of balancing hardware control and software scalability. Over the next five years, we’ll see the big cloud services providers (CSPs) hold a vast majority of the hardware market. Meanwhile, the smaller businesses fighting for the remaining market share will be forced to pick between building their own open source-based infrastructure solutions or purchasing turnkey products.”

Bigger picture

Quite obviously IoT will also be a driving factor for Big Data analytics to become more prevalent in terms of deployments. There is going to be a growing demand for such solutions for instantaneously fetching results for specific queries. Therefore, the compute infrastructure in the background is going to consume a lot of processing power.

Rabih says, “If you think of Mobility and IoT together, there is going to be a lot of data going to be generated. In order to link to link people, devices, process, things together, there has to be a tremendous amount of processing power that needs to be enabled behind this. The amount of time it takes to search through text is much less than it takes through for a video file or a voice conversation or facial recognition etc. The level of complexity and consumption of computing that is going to be needed in the future is entirely different level than in the past. Hence, the notion of Big Data, which is about taking zettabytes of data in a distributed way across multiple servers and multiple processors so that you gain your result much quicker such as in the case of a crime scenario investigation. It could be so many other different scenarios. In future, the ability to do Big Data crunching will be at our fingertips.”

Cisco’s Rabih also concedes that we are already onto an era when a single company’s solutions will not do and there is likely to be a lot of collaboration that will help enable all required solutions and services.

He adds, “No single company is going to have the answer to all these requirements. We have been developing Technologies both on the analytics side and also on the networking side to enable the Big Data model. We are now integrating Hadoop which is the platform for enabling distributed processing across a compute environment into our systems. We are building the services delivery platform or the orchestration platform that allows to include multiple vendors and allows to do the analytics for you.

Dell strengthened its portfolio in information management solutions with the acquisition of StatSoft last year. StatSoft is a provider of analytics solutions that deliver data mining, predictive analytics and data visualization capabilities.

Basil says, “We now have software portfolio for predictive analytics, an area where we were lacking prior to the StatSoft acquisition. We are in a position now to provide our customers access to proven and affordable advanced analytics solution that delivers the predictive and prescriptive analysis capabilities that their businesses need in order to make faster, more accurate decisions.”

Security, a prime time focus

With more devices connected, it would akin to a mouth-watering prospect for would be attackers as they seek network vulnerabilities to attack. Therefore, security needs to stay competent to tackle malicious attacks.

Rabih says, “Security is becoming a great concern. There will more focus on that and more technologies introduced that will allows us to adopt all the trends that I mentioned. This has to be much more robust than what is there currently. As we go towards the predicted 50 billion devices, the actual attack surface area would have increased tremendously.”

Security solutions will become more heavily integrated to guarantee the security of data and the privacy of users across the entire infrastructure. More organizations in the Middle East today recognize the need for efficient network security systems to secure their Businesses.

Sabbahuddin says, “The increasingly flexible policies of network access and the growing number of threats will escalate the demand for newer network protection technologies. The escalating likelihood of attack and the resulting loss of productivity and damage to reputations will ensure that security is a high priority for executive management—particularly given the number of high-profile attacks during 2014. Likewise, Next Generation Firewall (NGFW) technology, integrating application control capability, will play a leading role in the security space.”

Upbeat outlook

The region continues to be adopt new technologies. Large initiatives are being spearheaded by Government initiatives including the smart city projects.

Rabih says, “We are seeing a determined effort to invest in Technology as a way to enable the transformation of the nation, across the GCC. The vision of the leadership in the region is taking the lead in Technology adoption and we have been engaging with the governments in shaping those strategies and deploying the infrastructures in enabling all of those objectives. IT is now at the forefront of the government’s fiscal budgets. There is an increase in allocation. IT is not an afterthought. Although IT I not a solution to all issues, yet it is an element of all solutions for all problems.”

Sectors including Education BFSI, Education, Hospitality, Healthcare etc are all in process of upgrading their capabilities to compete and provide best services. Technology will remain a key enabler behind those efforts.

Basil says, “Oftentimes, the Middle East or any emerging markets would follow the trends going on globally. Customers see the opportunity because they are not tied down by legacy. The large enterprises see the opportunity to leapfrog other regions in terms of infrastructures and implement modern solutions. The small and medium size enterprises find it cheaper to implement as they can start taking advantage of enterprise grade solutions that are available at affordable costs.”

It has been a tricky era for the partners. They are challenged to embrace the disruptive technologies in their go to market models but most are keeping pace.

Rabih says, “Partner ecosystems have been evolving alongside. We are seeing a big appetite from our partners to sharpen their expertise and tools that helps them to deliver these new Technologies.”

While telcos delivering ICT services as part of their Managed services portfolio will increase, there will a lot more of opportunities emerging in the era that is on the cusp of pervasive connectivity and intelligence. The opportunities for integrators is only bound to rise.

Features

Why diversification is your best friend in today’s market

Published

2 days ago

September 16, 2024

Integrator Web-Editor

By Akshay Sardana, VP – Strategy & International Development, The Continental Group

In the world of investing, diversification is the only free lunch.

It’s becoming increasingly clear that diversification is not just a buzzword but a necessity from a de-risking standpoint. Whether you’re an individual investor trying to safeguard your savings or a financial institution managing large portfolios, spreading your investments across different asset classes, sectors, and geographies is crucial. We are navigating a phase marked by rising inflation, geopolitical tensions, and market volatility. Diversification is a crucial part of your financial safety net. It is just as important to think of how many different ways you can be invested, as it is to think of how long you will be invested.

Portfolios are often built primarily around time in the market; on face value, this is not a bad practice on its own. It is true that the likelihood of risk-adjusted gains goes up the longer you stay invested. But there are plenty of examples over the last five years which show that it should not be your only priority.

Remember the market uncertainty caused by the COVID-19 pandemic? While some sectors took significant hits, others, like technology, pharma, and commodities, saw substantial gains. Such disparities highlight the importance of a diversified portfolio. A large economic downturn doesn’t mean the potential for portfolio growth must fall.

Portfolio diversification is about spreading your investments to reduce exposure to any single risk. For financial institutions, diversification helps manage client portfolios more effectively. For individual investors, it safeguards savings against unexpected market downturns.

Strategies for effective diversification

Here is some data that points out why there is financial prudence in considering a diversified approach.

Tenure/Asset Class	Developed Market Equities(100%)	Developed Market(50%) + Indian Market Equities(50%)	Developed(40%) + India Equities(40%) with Gold (20%)
1 Year	16.66%	23.21%	22.60%
3 Year	6.73%	9.57%	9.53%
5 Year	11.60%	12.71%	12.28%
10 Year	9.80%	10.62%	9.62%

The table above illustrates how diversification enables investors to reduce concentration risk by spreading their investments across various sectors, asset types, and regions to achieve better results over time.

Asset class diversification: Allocating investments across different asset classes – such as equities, bonds, real estate, commodities, is the most rudimentary form of diversification. Equities might offer growth, while bonds provide stability and income. Real estate can offer inflation protection, and commodities like gold can serve as a hedge against market volatility. This approach ensures that an investor’s portfolio is not overly dependent on the performance of a single asset class. In its most ideal form, this kind of diversification allows for convenient rebalancing – changing the ratio of your investments in different classes – based on market trends.

Individual asset diversification: This strategy involves investing in a variety of assets within the same class. For example, rather than putting all your money into one tech stock or one sector, you might invest in a mix of various sectors. This approach reduces the risk associated with any single company or sector’s performance. This is critical as companies within a sector tend to have correlated performance, whereas different sectors tend to perform differently. By spreading investments across sectors, investors can leverage the strengths of multiple opportunities while cushioning against unidirectional risk.

Geographical diversification: By spreading investments across different regions, investors can hedge against local economic downturns. Investing in both emerging and developed markets can balance risks and rewards. For instance, while emerging markets may offer higher growth potential, developed markets typically provide stability. Recent geopolitical conflicts have shown that even local events can have global repercussions – having your portfolio spread across multiple regions is the only way to guard against such events.

Alternative investments: Beyond conventional asset classes, alternative investments like hedge funds, private equity, private credit, and real estate offer unique advantages. These investments often come with flexible terms and the potential for high returns, though they usually require a longer commitment. For instance, hedge funds, managed by professional fund managers, aim to maximize returns by strategically deploying investments. Private equity and private credit investing can also provide substantial returns but typically involve higher risks in terms of both capital deployed as well as timeframe.

Implementing diversification into your portfolio

Managing volatility in investments is much easier than managing emotions while investing.

To get started, there are two critical ingredients to get right:

Getting the right financial advisor
Setting up the right asset mix

If it’s a personal portfolio, you can start by automating your investments under the guidance of your advisor to ensure consistent allocation into diverse assets. Automating investments helps mitigate the risk of emotional decision-making, ensuring that a portion of your income is regularly allocated towards diverse assets. Regularly review your portfolio – at least once a quarter – and rebalance as needed to align with your financial goals and risk tolerance.

For example, if you’re nearing retirement and looking for more stability, you might reduce your equity exposure and increase investments in dividend-paying stocks and real estate investment trusts (REITs), or even fixed-income assets. Dividend-paying stocks can provide a steady income stream, while REITs offer exposure to the real estate market with relatively lower volatility compared to direct real estate investments.

Of course, none of this is set in stone – it’s essential to stay informed about market trends and adjust your strategy accordingly, as the performance of different asset classes can vary significantly over time. Make sure your plans are dynamic and avoid generic thumb rules, because personal finance is not a one-size-fits-all sphere.

Institutional diversification has some principles that can come in handy. Institutions focus on strategic asset allocation tailored to client needs, leveraging their expertise to adjust portfolios based on market trends. One effective strategy is investing in thematic funds that target specific growth areas, such as technology, healthcare, or renewable energy. Typically these are sectors that show resilience and growth potential, making them attractive even during market volatility. By maintaining well-rounded and flexible portfolios, institutions better navigate economic shocks and sector-specific downturns.

Common pitfalls

Diversification is not without its challenges. Common pitfalls include over-diversification, where the portfolio becomes too complex to manage effectively, and under-diversification, which fails to provide adequate risk mitigation. Over-diversification can lead to diminished returns, as the positive performance of some investments may be offset by the poor performance of others. On the other hand, under-diversification exposes the portfolio to higher risks, as it relies too heavily on the performance of a few assets.

Remember, the key to successful diversification lies in regular reviews, strategic rebalancing, and staying focused on long-term objectives. It’s crucial to remember that financial markets are inherently volatile, and short-term fluctuations should not drive investment decisions. Think of diversification as not just a financial strategy but also a stress management tool for yourself – a sufficiently balanced portfolio will keep you from making hasty decisions. Professional guidance to set up such a balanced system can be especially beneficial during periods of economic uncertainty.

Features

Navigating Merchant Payments under CBUAE’s New Payment Token Services Regulation

Published

1 week ago

September 11, 2024

Integrator Web-Editor

By: Akshata Namjoshi, Associate Partner, KARM Legal
Kabir Hastir Kumar, Associate, KARM Legal

Blockchain and digital assets are transforming the financial landscape, with increasing applications in payments, lending, and asset management.

Stablecoins are particularly being explored for payments due to their price stability. According to the CoinGate Q1 2024 report, USDT transactions accounted for 41.4% of all crypto payments, highlighting a growing trend towards stablecoin use in commerce. Additionally, Deloitte’s report underscores that over 60% of merchants express significant interest in accepting cryptocurrency payments, aiming to enhance customer experience and expand their market reach.

Merchants are increasingly interested in enabling their customers to pay with cryptocurrency. They partner with various acquiring platforms that facilitate these transactions through third-party crypto liquidity providers. Enabling such payment options benefits merchants by expanding their customer base, offering payment flexibility, and enhancing overall customer experience.

In the UAE, the Central Bank of the UAE (CBUAE) has recently introduced the Payment Token Services Regulation (PTSR), which imposes specific requirements on payments in virtual assets. This article discusses the impact of this regulation on merchant payments and its potential to shape the virtual asset industry in the region.

Risks with unregulated Crypto Merchant Payments

Many solutions globally have operated in a legally grey area, where fiat-to-virtual asset conversions were facilitated by both regulated and unregulated liquidity providers, posing risks particularly related to AML practices. Accepting crypto payments without stringent AML/KYC checks, including wallet screenings, could facilitate money laundering by integrating illicit funds into the traditional financial system. This highlights the importance of comprehensive AML measures to prevent illegal activities and ensure the integrity of the financial system. This can only be accomplished through regulation of all players invovled.

Position under PTSR

The new PTSR clarifies the legal framework for crypto payments in the UAE. Contrary to some beliefs, PTSR does not ban crypto payments but regulates them.

The PTSR stipulates that merchants can only accept payments for goods and services in dirham-backed stablecoins.

While many have interpreted this to mean an outright ban on crypto payments, there is no express prohibition on licensed Virtual Asset Service Provider (VASP) first converting virtual assets to fiat or dirham backed stablecoins.

The conversion of virtual assets into fiat or dirham-backed tokens through VARA or SCA -regulated VASPs is still permissible provided the appropriate no-objection registrations and licenses are procured from the CBUAE.

Implications on Existing Merchant Acquirers and Payment Aggregators

Merchant acquirers and payment aggregators in the UAE, regulated under the Retail Payment Services and Card Schemes Regulation (RPSCS Regulation), enable merchants to accept payments through various methods including debit cards, credit cards, and bank transfers. The PTSR though supersedes references to virtual assets in the RPSCS Regulation. Merchant acquirers and aggregators regulated under RPSCS Regulation can seek a custody and transfer license under PTSR for settlements in dirham-backed stablecoins, or a conversion license for facilitating fiat-to-stablecoin exchanges. If they wish to only handle the fiat leg of the transaction, they may continue under their existing license.

To enable trading of virtual assets – fiat/dirham backed stablecoins pairs, partnerships with VARA based VASPs can be explored. Such partnerships would involve front-end integrations to allow paying customers to acquire fiat/ dirham backed stablecoins for payment to merchants. All players must ensure that they operate within their licensing scopes for such arrangements.

Similar models can be seen in other jurisdictions, where the conversion of cryptocurrencies to fiat is handled by licensed VASP, and the fiat leg of the transaction is managed by payment service providers (PSPs), often operating in distinct regulatory environments.

Depending on the structure of the solution offered, contractual relationships will exist between (i) VASPs-paying customers for trading of crypto to fiat/dirham backed stablecoin; (ii) PSPs and merchants for acceptance and settlement of payments; and (iii) between PSPs and VASPs for front-end integration.

These partnerships benefit all parties: customers enjoy flexible payment options, merchants expand their payment methods, and payment service providers and VASPs gain an additional revenue channel.

Implications for Merchants

Merchants should seek comprehensive solutions for seamless crypto payments. These solutions streamline payment processes and enhance customer satisfaction by providing more payment options. Additionally, adopting crypto payments can position merchants as forward-thinking and tech-savvy, attracting a broader audience and potentially increasing sales.

However, in the absence of such licensed solutions in the market currently, some platform structuring may have to be undertaken for quick go-to-market.

Conclusion

While the full impact of the PTSR on payments and the virtual asset market in the UAE is yet to unfold, this regulation marks a progressive step. It offers legal clarity, fosters trust among customers, and ensures regulatory compliance, mitigating AML risks. This novel approach is likely to positively influence the perception and adoption of virtual asset payments in the region, enhancing overall market confidence.

Features

Luxury Through Training: Maintaining High Service Standards

Published

1 week ago

September 9, 2024

Integrator Web-Editor

By Jerome Mortel, COO of Sumo Sushi & Bento

In the ever-evolving landscape of the hospitality industry, maintaining high service standards is paramount to ensuring customer satisfaction and business success. At Sumo Sushi & Bento, we have long recognized that our greatest asset is our team. The role of continuous staff training, and development cannot be overstated when it comes to delivering exceptional service and creating memorable dining experiences for our guests.

Staff training serves as the foundation of excellence in any hospitality business. It equips employees with the necessary skills, knowledge, and confidence to perform their roles effectively. From understanding the menu and mastering culinary techniques to perfecting the art of customer service, comprehensive training programs ensure that every team member is well-prepared to meet the high standards set by the organization.

At Sumo Sushi & Bento, our training programs are designed to be thorough and ongoing. New hires undergo a rigorous onboarding process that covers everything from food safety protocols to customer interaction techniques. However, training does not stop once the initial onboarding is complete. We believe in the importance of continuous learning and development to keep our team motivated, engaged, and up to date with industry trends.

Adapting to Industry Changes

The hospitality industry is dynamic, with trends and customer preferences constantly evolving. Continuous staff training enables our team to adapt to these changes swiftly and effectively. Whether it’s incorporating new culinary trends into our menu or adopting the latest technology on our website or app to enhance customer experience, our training programs ensure that our staff is always at the forefront of innovation.

For instance, the recent surge in demand for contactless dining and digital payment options has necessitated a shift in how we operate. Through targeted training sessions, our staff has become proficient in using these new tools, ensuring that we continue to provide seamless and efficient service to our guests.

Enhancing Customer Experience

Customer experience is at the heart of the hospitality industry. Well-trained staff are better equipped to anticipate and meet the needs of our guests, leading to higher levels of customer satisfaction. Training programs that focus on soft skills, such as communication, empathy, and problem-solving, empower our team to create positive and memorable interactions with our customers.

Building a Strong Team Culture

Continuous training and development also play a crucial role in building a strong team culture. When employees feel valued and supported in their professional growth, they are more likely to be engaged and committed to their roles. This sense of belonging and loyalty translates into better teamwork and collaboration, which are essential for maintaining high service standards.

We believe in recognizing and rewarding our team’s achievements. Regular feedback sessions, performance reviews, and opportunities for career advancement are integral parts of our training programs. By investing in our staff’s growth and development, we create a positive work environment where excellence is the norm.

Investing in our Manpower

The role of staff training in maintaining high service standards cannot be underestimated. We are committed to providing continuous learning and development opportunities for our team. This commitment not only ensures that we deliver exceptional service to our guests but also drives our success in the competitive hospitality industry while fostering a culture of excellence that sets us apart.