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Short shift to cloud

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Migrating to the cloud doesn’t have to be a complex task anymore. KABELO MAKWANE, MD of Accenture South Africa’s Cloud First business, explains the ‘Lift and shift approach’.

‘Lift-and-shift’ – the classic approach to cloud migration – means this: take all your existing IT structures, procedures and applications and transfer them to the cloud.

On paper, such an approach seems sensible. Yet, while cloud migration may mean the benefit of eliminating physical hardware infrastructure on the IaaS layer, transferring needless complexity elsewhere can in fact cause a business’s total cost of ownership on the cloud to escalate. More broadly, the speed and effectiveness of any cloud migration is highly ecosystem-dependent; the application landscape forms only one part.

The reason is the amplifying effect of the cloud. Poorly designed or inefficient IT operating models have their flaws emphasised by the as-a-service paradigm. On one hand, this means that if businesses haven’t designed an efficient service management model or built their application sets with an eye on leanness, they may end up spending more to maintain those functions in the cloud. Other ecosystem areas – including governance and management – also require an expert guiding hand when it comes to cloud pivots.

All businesses are likely to witness a degree of change in their IT operating models when undertaking a migration. For one, cloud changes the way people operate within an IT environment. Because of the high degree of automation within the cloud, for example, people are both freed up and required to work at a higher order, both in terms of IT ops and administration.

Given this consideration and others, enterprises need to assess how fast and to what extent they want to rotate to the cloud. Will it be full-on ERP in the cloud? Full CRM in the cloud with mobility? Partial? The growing impetus for enterprises to forward integrate using cloud services is a related consideration. Indeed, the trend is coming to demand increasing attention.

Consider the near-ubiquity of self-service banking apps. Today, we’d say that a financial services provider without one belongs in the stone age. And yet banking apps have been a relatively recent development. Healthcare is seeing similar developments with the rise of wearable tech. The industry is likely to witness the same level of forward integration, requiring consumers to take some degree of responsibility in terms of managing their own health and wellness.

When it comes to the application-level changes cloud-minded businesses undergo during migration, natively cloud apps will be those requiring the least remediation. Others will likely require more rationalisation and consolidation. Hearkening back to the concept of leanness, enterprises often have a large real estate of custom applications spun out by IT over time. Performing analysis and due diligence on the application landscape before a migration is key. Migrations present a good opportunity to do a little spring cleaning.

Integration layers – what we used to call ‘middleware’ – are key here, yet the area has also witnessed something of an overhaul. There are still middleware players – they haven’t gone away; they have just reinvented themselves. When it comes to modernising applications, containerisation allows for application migration without full reengineering. From a DevOps perspective, tools such as Kitkat and Cucumber can help with rewriting applications so that they become cloud ready.

Another key aspect of the migration ecosystem is governance. The sphere may be easy to overlook, yet business need to ask themselves key questions: ‘Do we have a governance model for operating in the cloud? Does it extend to security, risk and identity management?’ In this line, a concept known as shared responsibility is gaining traction. The approach means that enterprises cannot negate their responsibility to secure their applications and data, even if the cloud is more secure than their existing on-premise environment. It’s about a joint effort.

A final ecosystem component is that of cloud service brokerage. Businesses’ habits of consuming federated IT infrastructures and application environments haven’t gone away. Interest in engaging multiple providers is still driven, in some cases, by organisations shying away from vendor lock-in. Alternatively, enterprises may buy different applications for different purposes, informed by their strategy.

When it comes to consuming federated or disparate environments, businesses often require some level of service brokerage. So there is an emerged discipline – within hyperscale cloud particularly – wherein specific boutique outfits are now building brokerage capabilities. The result is that organisations can consume from multiple cloud types on their own terms.

At the broadest level, to be able to fully realise the promise of cloud in terms of speed, efficiency, cost effectiveness, scale and optimisation, capable oversight is required. The result is that cloud management platforms have emerged – many hyperscale cloud providers are now building management capabilities onto their offerings.

AWS’s EC2 platform for example has seen ongoing investment to natively embed functions around identity management and application integration in the cloud and Microsoft Azure Cloud also sees heavy investment in this area as well in order to build native capability. By embedding such tools, it becomes far easier for businesses to deploy cloud applications as extensive knowledge of middleware and integration tools are no longer required.

In sum, effective, cost-effective cloud migration depends on thoughtful deployment on a host of levels – applications, governance, management and brokerage among them. In short, it’s all about leveraging the ecosystem.

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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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