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PC slump in E Africa

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The East Africa PC market – comprising Kenya, Ethiopia, Tanzania, and Uganda – declined -8.6% year on year in Q4 2016, according to the latest figures compiled by IDC.

The global technology research and consulting services firm says shipments for the quarter fell to 113,303 units as a combination of political, monetary, and economic factors inhibited the PC market’s performance.

“East Africa’s biggest PC market, Kenya, continues to be hampered by political uncertainty in the build up to general elections scheduled for August 2017, while the government’s introduction of monetary policy changes has tightened access to credit,” says Kirui Andrew, a research analyst for systems and infrastructure solutions at IDC East Africa. “The region is also coming under mounting pressure from the influx of gray imports from the UAE. These imported PCs often evade VAT, particularly in Kenya and Tanzania, making them a cheaper alternative that local channel partners simply cannot compete with.”

IDC’s data shows that commercial PC shipments in East Africa fell -9.1% year on year in Q4 2016, due mainly to reduced investments by small and medium-sized businesses (SMBs). Meanwhile, the consumer segment saw shipments fall -7.5% over the same period, in part due to the aforementioned competition from gray imports.

In terms of the overall PC vendor landscape, Dell overtook HP Inc. in Q4 2016 to become the region’s leading PC supplier with 30.1% unit share. Second-placed HP Inc. saw its share fall to 22.3%, while Lenovo remained in third position with 19.6% share of the market.

Looking at Kenya in isolation, PC shipments declined -16.6% year on year in Q4 2016, primarily due to weaker consumer spending and a reduction in commercial sector investments. Monetary policy changes implemented by the Kenyan government have made it more difficult for SMBs to access financial services, leading to a more cautious approach to investing in PC hardware.

Conversely, the Kenyan tablet market saw explosive year-on-year growth of 230.5% in Q4 2016 to total 149,906 units, although much of this growth stems from purchases for the government’s Digital Literacy Program, which is scheduled to end in H1 2017. Excluding the education sector initiative, consumer spending on tablets in Kenya fell -11.3% year on year in Q4 2016, primarily due to high inflation. Positivo BGH and JP SA Couto, the main vendors for the Digital Literacy Program, led Kenya’s overall tablet market in Q4 2016 with shares of 37.4% and 36.7%, respectively. Samsung placed third with 6.1%.

In Ethiopia, there was encouraging PC growth of 18.0% year on year in Q4 2016, despite ongoing political instability. One driver of this growth was a major commercial deal secured by Lenovo. Ethiopia continues to see double-digit annual economic growth, propelling increased investment in the commercial space. Dell, Ethiopia’s leading PC vendor, has boosted its marketing, leading to impressive results in the consumer segment.

Elsewhere, the Tanzanian PC market suffered the region’s biggest year-on-year decline in Q4 2016, with shipments falling -29.0% following the introduction of strict government public spending cuts. There was better news in Uganda, however, as a recovering economy and improved political stability saw PC shipments increase 12.5% year on year.

Looking ahead, IDC expects the East Africa PC market to see marginal growth in 2017, with a year-on-year increase in shipments of 2.0% forecast for the year as a whole.

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Crouching Yeti strikes

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Kaspersky Lab has uncovered infrastructure used by the Russian-speaking APT group Crouching Yeti, also known as Energetic Bear, which includes compromised servers across the world.

According to the research, numerous servers in different countries were hit since 2016, sometimes in order to gain access to other resources. Others, including those hosting Russian websites, were used as watering holes.

Crouching Yeti is a Russian-speaking advanced persistent threat (APT) group that Kaspersky Lab has been tracking since 2010. It is best known for targeting industrial sectors around the world, with a primary focus on energy facilities, for the main purpose of stealing valuable data from victim systems. One of the techniques the group has been widely using is through watering hole attacks: the attackers injected websites with a link redirecting visitors to a malicious server.

Recently Kaspersky Lab has discovered a number of servers, compromised by the group, belonging to different organisations based in Russia, the U.S., Turkey and European countries, and not limited to industrial companies. According to researchers, they were hit in 2016 and 2017 with different purposes. Thus, besides watering hole, in some cases they were used as intermediaries to conduct attacks on other resources.

In the process of analysing infected servers, researchers identified numerous websites and servers used by organisations in Russia, U.S., Europe, Asia and Latin America that the attackers had scanned with various tools, possibly to find a server that could be used to establish a foothold for hosting the attackers’ tools and to subsequently develop an attack. Some of the sites scanned may have been of interest to the attackers as candidates for waterhole. The range of websites and servers that captured the attention of the intruders is extensive. Kaspersky Lab researchers found that the attackers had scanned numerous websites of different types, including online stores and services, public organisations, NGOs, manufacturing, etc.

Also, experts found that the group used publicly available malicious tools, designed for analyzing servers, and for seeking out and collecting information. In addition, a modified sshd file with a preinstalled backdoor was discovered. This was used to replace the original file and could be authorised with a ‘master password’.

“Crouching Yeti is a notorious Russian-speaking group that has been active for many years and is still successfully targeting industrial organisations through watering hole attacks, among other techniques. Our findings show that the group compromised servers not only for establishing watering holes, but also for further scanning, and they actively used open-sourced tools that made it much harder to identify them afterwards,” said Vladimir Dashchenko, Head of Vulnerability Research Group at Kaspersky Lab ICS CERT.

“The group’s activities, such as initial data collection, the theft of authentication data, and the scanning of resources, are used to launch further attacks. The diversity of infected servers and scanned resources suggests the group may operate in the interests of the third parties,” he added.

Kaspersky Lab recommends that organisations implement a comprehensive framework against advanced threats comprising of dedicated security solutions for targeted attack detection and incident response, along with expert services and threat intelligence. As a part of Kaspersky Threat Management and Defense, our anti-targeted attack platform detects an attack at early stages by analysing suspicious network activity, while Kaspersky EDR brings improved endpoint visibility, investigation capabilities and response automation. These are enhanced with global threat intelligence and Kaspersky Lab’s expert services with specialisation in threat hunting and incident response.

More details on this recent Crouching Yeti activity can be found on the Kaspersky Lab ICS CERT website.

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R5m in software fines

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South African companies paid almost R5.2 million in damages for using unlicensed software in 2017 up from R3.6 million in 2016.

This is according to data from BSA | The Software Alliance, a non-profit, global trade association created to advance the goals of the software industry and its hardware partners.

The significant increase in unlicensed software payments – which includes settlements as well as the cost of acquiring new software to become compliant – is the result of more accurate leads from informers, says Darren Olivier, Partner at Adams & Adams, legal counsel for BSA. In 2017 BSA received 281 reports in South Africa alleging the use of unlicensed software products of BSA member companies – this up considerably up from 230 leads in 2016.

“BSA’s recent social media campaign also helped to create awareness among local companies about the need to comply with existing legislation in order to avoid legal action,” Olivier says.

The result has been a 13% increase in settlements paid in 2017, with the settlements total reaching almost R2.5 million.

While the average settlement paid by companies in 2017 was around R36 094, in some cases the amount owed was far greater, as is evidenced by Shereno Printers, a print and design company based in Gauteng, which ended up paying a hefty settlement amount of R260 000 last year in an out of court settlement.

The company’s case was in line with a broader trend, which saw the print and design industry as a whole rank among the top sectors plagued by unlicensed software.

Aside from settlements, companies also paid more than R2.6 million in licenses purchased to legalise their unlicensed software.

And the ramifications of software piracy extend beyond financial implications. “It also results in potential job losses and loss in tax revenue. This is not to mention the financial and reputational damage brought about by security breaches and lost data,” comments Olivier.

As unlicensed software has not been updated with the latest security features, it leaves businesses vulnerable to cyberattack, he explains.

This is a particular problem for companies operating in South Africa where economic crime has recently reached record levels, according to the Global Economic Crime Survey. Indeed, 77% of South African organisations have experienced some form of economic crime. What’s more, instances of cybercrime totalled 29% of economic crimes reported.

This in turn, raises questions around government policy and the adequacy of existing copyright legislation, which only enables the registration of copyright in films, but not in computer programs.

Olivier notes that it is likely the percentage of unlicensed software on South African computers has increased over the past year. “We received many more leads this year, which is an indicator that the amount of pirated software is greater than in previous years,” he comments.

Often unlicensed software is not so much a case of deliberate piracy as it is a result of poor software asset management (SAM).

“For this reason, the BSA encourages all businesses to ensure they have effective SAM practices in place. Companies should be able to confirm what software they are using and are licensed to use – this will help them to identify unlicensed software and can also bring about cost savings. Even the most basic SAM practices such as regular inventories and software use policies can help,” says Chair of the BSA SA Committee, Billa Coetsee.

With this in mind the BSA offers a range of SAM solutions, not only to help organisations reduce legal and security risks, but also to create business value.

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