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Amazon expands in SA

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Amazon has announced it is expanding its presence in South Africa by adding a new office in Johannesburg for Amazon Web Services South Africa.

The new office joins the established Amazon Development Center Cape Town, which has been in operation since 2004 and develops technology for several Amazon businesses, including Amazon Web Services (AWS). As part of this expansion, Amazon also announced that it plans to hire more than 250 people in the next 12 months to fill highly-skilled technical roles that will be based in both locations.

The new Johannesburg office has been launched to support the growing customer base of AWS. The office is now open and operational and is supporting organisations of all sizes, from start-ups to the country’s oldest and most established enterprises and public sector organisations, as they make the transition to the AWS cloud. The new office will have account managers, solutions architects, partner managers and various other functions for South African customers to directly engage with AWS. South African customers looking to learn more about working with AWS should visit aws.amazon.com/south-africa.

This news comes as Amazon celebrates over ten years in South Africa. Amazon first established a presence in the country by opening a development center in December 2004 to help build the Amazon Elastic Compute Cloud (Amazon EC2) service. Many of the more than 250 new roles in South Africa will be based here and will work on Amazon EC2 as well as the engineering of other new services as well as pioneering networking technologies and next generation cloud software.

“Amazon has been an active contributor to the South African technology community for over a decade,” said Steve Midgley, Head of EMEA, Amazon Web Services. “Over this time we have seen some key technologies of the AWS cloud emerge from the country so it is no surprise we are also seeing strong growth amongst African organisations moving to the cloud. Choosing to locate an AWS office in South Africa speaks to the rapidly growing customer base, the broad set of talent here and the investment we are making to support cloud adoption around the world. By expanding our presence in South Africa, and through hiring highly skilled staff, we intend to further accelerate the growth of our cloud customers in Africa and around the globe.”

South African organisations were amongst the earliest adopters of cloud services when AWS launched in 2006. Customers based in South Africa are using AWS to run everything from development and test environments to big data analytics, from mobile, web and social applications to enterprise business applications, public sector and mission critical workloads. AWS now counts some of Africa’s fastest growing businesses as customers including, Entersekt, PayGate and Travelstart as well as established enterprises such as Adcorp and Medscheme.

One African enterprise business that is working with AWS to develop new revenue streams for their organisation is telecoms giant MTN. “AWS expanding their presence in South Africa is great news for the entire African business community,” said Mteto Nyati, CEO of MTN Group. “At MTN, our purpose is to enable and inspire growth on the African continent. By working with a global technology leader such as AWS, MTN is better placed to enable customers to grow their businesses. The relationship with AWS is an important part of our plans to address the needs of enterprise customers in emerging markets, particularly Africa.”

Another large company that is welcoming AWS expansion in Africa is Standard Bank. As one of the largest banks in Africa, Standard Bank understands the power cloud computing has to help the South African economy. “Amazon’s growing presence in the country and the region is something that we at Standard Bank are especially pleased to see,” said Mike Murphy, Executive Head: Group Technology Build, Standard Bank. “The opportunities that AWS’ portfolio of services present to a company like ours, and the local business community, are substantial. When leveraged wisely these cloud technologies give South African companies of all sizes the opportunity to speed up innovation and expand their businesses to compete globally”.

An example of a South African company that is using AWS to grow their business globally is Travelstart. Travelstart is Africa’s largest travel booking website offering flights, hotel bookings, car rental, vacation packages and a range of insurance services. The company operates in more than 15 countries across Africa and the Middle East. “Hearing there is now an AWS office in South Africa is great news for us,” said Anders Bäck, CTO from Travelstart. “Thanks to the pay-as-you-go nature of AWS we have been able to grow our Middle Eastern websites in leaps and bounds while reducing operating costs. By using AWS we have reduced down time by 25% and were able to take on a multi-continent expansion in an agile manner. Without the scalability of AWS, and the support of their team, we would not have been able to achieve this and with an office it should help us even further.”

This news comes as Amazon continues its investment in, and expansion, across Europe, the Middle East and Africa. In 2014 Amazon created over 6,000 new jobs in the region. The new, highly skilled roles being announced today will be based in Cape Town and Johannesburg and include: Software Development Engineers; Network Development Engineers; Support Engineers; Technical Account Managers; Systems Engineers; Solutions Architects and many more. People looking to apply for a role in South Africa, or any of Amazon’s businesses around the world, can apply online at www.amazon.jobs.

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Online retail gets real

After decades of experience in selling online, retailers still seek out the secret of reaching the digital consumer, writes ARTHUR GOLDSTUCK.

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It’s been 23 years since the first pizza and the first bunch of flowers was sold online. One would think, after all this time, that retailers would know exactly what works, and exactly how the digital consumer thinks.

Yet, in shopping-mad South Africa, only 4% of adults regularly shop online. One could blame high data costs, low levels of tech-savviness, or lack of trust. However, that doesn’t explain why a population where more than a quarter of people have a debit or credit card and almost 40% of people use the Internet is staying away.

The new Online Retail in South Africa 2019 study, conducted by World Wide Worx with the support of Visa and Platinum Seed, reveals that growth is in fact healthy, but is still coming off a low base. This year, the total sale of retail products online is expected to pass the R14-billion mark, making up 1.4% of total retail.

This figure represents 25% growth over 2017, and comes after the same rate of growth was seen in 2017. At this rate, it is clear that online retail is going mainstream, driven by aggressive marketing, and new shopping channels like mobile shopping. 

But it is equally clear that not all retailers are getting it right. According to the study, the unwillingness of business to reinvest revenue in developing their online presence is one of the main barriers to long-term success. Only one in five companies surveyed invested more than 20% of their online turnover back into their online store. Over half invested less than 10% back.

On the surface, the industry looks healthy, as a surprisingly high 71% of online retailers surveyed say they are profitable. But this brings to mind the early days of Amazon.com, in 1996, when founder Jeff Bezos was asked when it would become profitable.

He declared that it would not be profitable for at least another five years. And if it did, he said, it would be in big trouble. He meant that it was so important for long-term sustainability that Amazon reinvest all its revenues in customer systems, that it could not afford to look for short-term profits.

According to the South African study, the single most critical factor in the success of online retail activities is customer service. A vast majority, 98% of respondents, regarded it as important. This positions customer service as the very heart of online retail. For Amazon, investment back into systems that would streamline customer service became the key to the world’s digital wallets.

In South Africa online still make up a small proportion of overall retail, but for the first time we see the promise of a broader range of businesses in terms of category, size, turnover and employee numbers. This is a sign that our local market is beginning to mature. 

Clothing and apparel is the fastest growing sector, but is also the sector with the highest turnover of businesses. It illustrates the dangers of a low barrier to entry: the survival rate of online stores in this sector is probably directly opposite to the ease of setting up an online apparel store.

A fast-growing category that was fairly low on the agenda in the past, alcohol, tobacco and vaping, has benefited from the increased online supply of vapes, juices and accessories. It also suggests that smoking bans, and the change in the legal status of marijuana during the survey, may have boosted demand. 

In the coming weeks, we can expect online retail to fall under the spotlight as never before. Black Friday, a shopping tradition imported “wholesale” from the United States, is expected to become the biggest online shopping day of the year in South Africa, as it is in the USA.

Initially, it was just a gimmick in South Africa, attempting to cash in on what was a purely American tradition of insane sales on the Friday after Thanksgiving Day, which occurs on the third Thursday of November every year. It is followed by Cyber Monday, making the entire weekend one of major promotions and great bargains.

It has grown every year in South Africa since its first introduction about six years ago, and last year it broke into the mainstream, with numerous high profile retailers embracing it, and many consumers experiencing it for the first time. 

It is now positioned as the prime bargain day of the year for consumers, and many wait in anticipation for it, as they do in the USA. Along with Cyber Monday, it provides an excuse for retailers to go all out in their marketing, and for consumers to storm the display shelves or web pages. South African shoppers, clearly, are easily enticed by bargains.

Word of mouth around Black Friday has also grown massively in the past two years, driven by both media and shoppers who have found ridiculous bargains. As news spreads that the most ridiculous of the bargains are to be had online, even those who were reticent of digital shopping will be tempted to convert.

The Online Retail in SA 2019 report has shown over the years that, as people become more experienced in using the Internet, their propensity to shop online increases. This is part of the World Wide Worx model known as the Digital Participation Curve. The key missing factor in the Curve is that most retailers do not know how to convert that propensity into actual online shopping behaviour. Black Friday will be one of the keys to conversion.

Carry on reading to find out about the online retailers of the year.

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Reliable satellite Internet?

MzansiSat, a satellite-Internet business, aims to beam Internet connections to places in South Africa which don’t have access to cabled and mobile network infrastructure, writes BRYAN TURNER.

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Stellenbosch-based MzansiSat promises to provide cheap wholesale Internet to Internet Service Providers for as little as R25 per Gigabyte. Providers who offer more expensive Internet services could benefit greatly from partnering with MzansiSat, says the company. 

“Using MzansiSat, we hope that we can carry over cost-savings benefits to the consumer,” says Victor Stephanopoli, MzansiSat chief operating officer.

The company, which has been spun off from StellSat, has been looking to increase its investor portfolio while it waits for spectrum approval. The additional investment will allow MzansiSat’s satellite to operate in more regions across Africa.

The MzansiSat satellite is being built by Thales Alenia Space, a French company which is also acting as technical partner to MzansiSat. In addition to building the satellite, Thales Alenia Space will also be assisting MzansiSat in coordinating the launch. The company intends to launch the satellite into the 56°E orbital slot in a geostationary orbit, which enables communication almost anywhere in Africa. The launch is expected to happen in 2022. 

The satellite will have 76 transponders, 48 of which will be Ku-band and 28 C-band. Ku-band is all about high-speed performance, while C-band deals with weather-resistance. The design intention is for customers of MzansiSat to choose between very cheap, reliable data and very fast, power-efficient data. 

C-band is an older technology, which makes bandwidth cheaper and almost never affected by rain but requires bigger dishes and slower bandwidth compared to Ku-band connections. On the other hand, Ku-band is faster, experiences less microwave interference, and requires less power to run – but is less reliable with bad weather conditions.

MzansiSat’s potential military applications are significant, due to the nature of the military being mobile and possibly in remote areas without connectivity.  Connectivity everywhere would be potentially be life-saving.

Consumers in remote areas will benefit, even though satellite is higher in latency than fibre and LTE connections. While this level of latency is high (a fifth of a second in theory), satellite connections are still adequate for browsing the Internet and watching online content. 

The Internet of Things (IoT) may see the benefits of satellite Internet before consumers do. The applications of IoT in agriculture are vast, from hydration sensors to soil nutrient testers, and can be realised with an Internet connection which is available in a remote area.

Stephanopoli says that e-learning in remote areas can also benefit from MzansiSat’s presence, as many school resources are becoming readily available online. 

“Through our network, the learning experience can be beamed into classrooms across the country to substitute or complement local resources within the South African schooling system.”

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