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Big benefits expected from digital

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Companies in Europe, Middle East and Africa expect IT optimisation and competitive advantage to be the main benefits of digital transformation, according to a new report from F5 Networks, the 2018 State of Application Delivery (SOAD) report.

Now in its fourth year, the report shows how the growing influence of multi-cloud deployments are helping EMEA organisations better optimise apps, automate and embrace digital transformation. It also highlights the most up-to-date operational and security challenges associated with this shift.

“More than ever before, EMEA is heavily focused on building the foundation necessary for application-driven digital transformation. As a result, many are moving toward multi-cloud environments that will enable them to pioneer platforms for competitive differentiation and innovation in the digital economy,” said Martin Walshaw, senior systems engineer at F5.

Digital transformation inspires new architectures and IT optimisation initiatives

According to SOAD 2018, IT optimisation is the number one benefit expected from digital transformation efforts in EMEA (69 percent of respondents). Competitive advantage came second, with 59 percent, and business process optimisation was a close third, with 46 percent.

Realising these benefits entail a combination of cloud, new app architectures, and IT automation.

Over half (57 percent) of respondents indicated they are employing automation and orchestration of IT because of digital transformation. Almost half (48 percent) are moving to deliver apps from a public cloud, and 48 percent are changing how they develop those applications. Forty-three percent said digital transformation has prompted the exploration of new app architectures involving containers and micro-services.

The multi-cloud challenge

According to SOAD 2018, 54 percent of respondents determine which cloud is best for each application on a case-by-case basis. This is fuelling an uptick in multi-cloud environments, with 75 percent of respondents claiming to use multiple cloud providers.

As ever, security remains a key concern in the cloud. In EMEA, applying consistent security policies across all company applications was deemed to be the “most challenging or frustrating” aspect of managing multi-cloud environments (42 percent). Thirty-nine percent believe the biggest challenge is protecting applications from existing and emerging threats. SOAD 2018 concludes that this has led to an increase in organisations deploying Web Application Firewalls (WAFs), with 61 percent now using the technology to protect their applications.

“As applications drive business, organisations make IT decisions based on the needs of the app, leading many to leverage multiple cloud platforms,” explained Walshaw.

“While multi-cloud environments offer many benefits in terms of speed, scale and flexibility, challenges include providing consistent security across clouds, protecting apps from a variety of threats, and gaining visibility into application health.”

Application services are the gateways to the future

On average, SOAD reported that organisations in EMEA leverage 15 different application services to keep their apps fast, safe and available.

Security is still regarded as the most important application service in EMEA (44 percent, compared to 39 percent globally). Interestingly, as IT organisations prepare for the digital economy, gateway services are starting to emerge as a ‘must-have’.  The top gateway services in EMEA relate to the Internet of Things (34 percent), SDN (32 percent), API (32 percent) and HTTP/2 (28 percent).

Key app service security challenges include the increasing sophistication of attacks (42 percent), employees underestimating the impact of not following security policies (41 percent), the increasing complexity of security solutions (29 percent), mobile app security (35 percent) and lack of IT security skills (28 percent).

“By embracing modern application architectures, cloud models and a wide diversity of devices, EMEA organisations are striving to capitalise on the digital economy,” said Walshaw.

“The deployment plans for gateways clearly show that respondents are putting in place the technologies and tools they need to confidently move forward into an increasingly digital future.”

Automation and orchestration: Full steam ahead

Across EMEA, IT departments are embracing programmability and standardisation within their automation and orchestration environments. Three in four (75 percent) of respondents declare the use of automation in the operation of IT infrastructure to be “somewhat” or “very” important. The majority (72 percent) are using automation to realise leaner IT with the goal of reducing OpEx, while nearly half (48 percent) are looking to scale to meet demand.

“With pressure from Dev and Ops mounting, thanks to increasing use of containers and adoption of cloud, traditional IT is embracing programmability to enable the automation and orchestration required to succeed,” Walshaw added.

“However, organisations seeking to optimise IT through automation and orchestration need to standardise before speeding ahead.”

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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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