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Load shedding biggest threat to SMEs

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This year’s SME Survey has revealed that small businesses now consider load shedding to be the biggest threat to their livelihood.

If you were to ask the owners of small and medium enterprises (SMEs) what keeps them awake at night, chances are that you would be inundated with shared concerns. Based on the findings of the SME Survey this year, finance, competition and crime are some of the most pressing issues. However, crime no longer claims first place. Instead, frequent and prolonged power failures rank as the most concerning issue for SMEs.

According to Arthur Goldstuck, MD of World Wide Worx and principal researcher for SME Survey, this year has seen a dramatic shift in what SMEs consider to be the biggest external threats to their businesses.

“With power failures cited by 71% of respondents, the issue rates at almost exactly double the importance of crime, which came in a distant second, at 36%. This category is obviously driven to a large extent by those concerns that are highest in the public mind – SMEs have in the past attributed their sleepless nights to crime, the high cost of fuel, or even interest rates. These results came even when power failures were featured in the survey during the first load shedding several years ago, but load shedding still came well below crime at the time,” he says.

“The reason we have seen such a massive jump for this category is due to the cumulative effects of ongoing load shedding. While load shedding has been punted as a temporary problem, it is clear that business fears that it is going to be with us for the foreseeable future.”

Ethel Nyembe, Head of Small Enterprise at Standard Bank, says: “While big companies have the infrastructure, client bases and capital to cope with the challenges highlighted in the survey, many small businesses, which have the potential to be active players in the South African economy, do not have the financial muscle and resources to overcome these challenges.”

Elaine Wang, Microsoft Business Unit Manager at Rectron, adds: “With the ever-looming possibility of load shedding, there is no better time for SMEs to consider a cloud solution for their businesses. Given limited capital for expensive infrastructure, public cloud offerings are a great way to ensure that SMEs are protected against loss of data and downtime. These solutions also ensure that they are able to stay up to date with the latest in technology offerings while paying on a per user or usage basis.”

Goldstuck concurs: “The impact of even short periods without power is greater on SMEs than it would be on larger companies that likely have generators and other fall-back options.”

“The rising concern regarding load shedding is probably also due to the fact that its effects seem more severe now than they did in 2008 and, at the same time, the lights are off for longer periods now. On top of this, there seems to be additional challenges, such as blown transformers that occur when the power comes back on, increasing concerns for the safety of home appliances. All of this, combined, paints a very bleak picture for SMEs,” he adds.

It is also essential for SMEs to play a role in mitigating the effects of load shedding, such as backing up data on their computers, which is integrally tied to a sudden loss of power. “Backing up any less than on a daily basis can prove to be disastrous for an SME, yet the figures demonstrate that the proportion of SMEs doing exactly this has risen from only 30.5% in 2014 to a still-low 40% in 2015,” he says.

There is no doubt that, by failing to improve their policies on backing up, SMEs are flirting with disaster, he says. In an era when electronic information is the lifeblood of a business, it is almost inconceivable that more than one out of every three SMEs only backs up on a weekly or monthly basis.

“Part of the problem is that few SMEs associate power failures with the need to back up data, and yet unexpected load shedding is one of the events most likely to lead to a loss of data,” says Goldstuck. “However, with load shedding expected to be with us for the foreseeable future, I anticipate that backing up will become far more of a priority for SMEs as we move forward. After all, there are already more than enough worries SMEs face, so the thought that one might lose vital business data to an unexpected power failure should be cause for concern for small businesses.”

Ms Nyembe says that big organisations are no longer the primary focus for growth and job creation. The biggest emerging economies today are driven by SMEs as key drivers for economic growth, innovation and sustainable employment. She is of the view that if South Africa is to join their ranks, SMEs need the necessary backing, namely financial assistance, access to markets, corporate and government support, business and skills development, and mentorship.

The SME Survey is the original and largest representative survey of SMEs in South Africa and, since 2003, has contributed ground-breaking research into the forces shaping SME competitiveness.

* SME Survey 2015 is sponsored by Standard Bank and Forest Technologies powered by Rectron

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Fibre critical to SA

By JACQUES DU TOIT, CEO of Vox

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It has been almost a week since South Africa joined several other countries around the world in locking down to limit the spread of the coronavirus. But beyond the impact this has had on people’s lives, it has highlighted how essential access to reliable, high-speed fibre infrastructure has become for the economy to keep going.

It should come as no surprise that the government has identified it as a critical service. Fortunately, many people are still able to work remotely and fulfil most of their job requirements, albeit in a digital-centric way. Broadband penetration is critical to the economy – in a study conducted by the World Bank it was proven that for every 10% increase in broadband penetration there is an increase between 1.19% and 1.35% rise in GDP. South Africa is in desperate need for all kinds of economic stimulus and hence the importance of keeping these services running during a Lockdown period,

Of course, this entails more than just video conferencing and sending more emails. It reflects a fundamental shift in business approach that will enhance how companies operate. Once the lockdown ends, the landscape would have evolved to such an extent that nothing will return to normal.

This push to allow for working from home, has put pressure on IT departments to ensure systems still run smoothly. If anything, it has illustrated that aging connectivity such as ADSL can no longer be relied upon. And while much is made about the user-friendliness of wireless technologies such as 4G, LTE, and 5G, the high cost of mobile data and the incapacity of the networks to deal with the influx of demand does not make it a viable option either.

One of the challenges mobile operators face is high contention rates. This means that the more users are on their networks, the slower access becomes. We have seen  LTE users experienced a speed decrease from 20Mbps to just 0.6Mbps when people started flooding video streaming sites rendering them virtually unusable. And beyond zero rating data to limited educational resources, the mobile providers have given little by way of a fresh value proposition to consumers during this difficult time. The recent price reduction was long overdue and is still not close to rates offered by the fibre operators.

For their part, many fibre operators have provided consumers with upgrades that automatically doubled their line speeds, free installations, increased capped products by as much as 3 times. This faster access is essential given how consumer usage patterns have now changed from download only to needing to upload data as well.

These changes have seen application marketplaces experience a significant shift in focus. During the week of March 14 to 21, business apps topped 62 million downloads globally, an increase of 45% over the previous week. Furthermore, Google has made the premium features of its Hangouts Meet application available for free and Microsoft is offering a free six month subscription to Microsoft Teams, to name just two examples of how changing consumer behaviour is changing the market dynamics of connectivity solutions.  

One of fibre’s strengths is its scalability and capacity – it is virtually unlimited. This means users’ line speeds can be upgraded in real-time with no disruption. And because it provides a smooth transition to the cloud, fibre also enables companies to automate many administrative-intensive processes thereby freeing up users to deliver more strategic value to the business.

Embrace the new

It is now an opportune time to look at embracing new ways of working and engaging with one another.

Take schools and institutions of higher learning for example. The situation has forced them to start working on distance learning options. If learners cannot return to school, e-learning becomes essential to help them keep up with work. This highlights the significant digital divide in the country where millions do not have access to the systems to allow for this to happen.

This requires educators to think differently and look for viable alternatives. It could very well pave the way for SMEs to come up with more innovative ways of educating and working in this time of crisis.

On the corporate side, the lockdown has forced many companies’ hand in getting them to examine how best to use cloud-based business tools. This is critical if remote workers are to be empowered and help organisations remain fully functional during the lockdown.

Some of these tools can encompass everything from transitioning the PBX into the cloud that redirects company calls to employees’ mobile phones, embracing unified communication solutions such as Microsoft Teams to ensure team members are still in touch with one another and can deliver on their project deliverables, and even using the Adobe Sign e-signature service to send, sign, track, and manage signature electronic document processes.

But irrespective of the solutions used, the common denominator is having a fast, reliable connectivity infrastructure. Therefore, fibre network operators have a critically important role to play in the country and must take this responsibility seriously.

Vital to adapt

Agility has become essential for survival. Society must work together to address the critical needs in the country. To this end, people must collectively take ownership of the issues faced. For example, parents need to be more involved in their children’s education and employees accept the responsibilities that come from working from home and ensure that they are disciplined.

South Africa is already starting to see this change. Fewer vehicles are on the road meaning people are spending less money on petrol, there are reduced emissions that benefit the environment, and fewer traffic officials who can be used to assist police and the military with other, more essential services. Small entrepreneurs will start to broaden their target markets placing pressure on large corporates to improve their value proposition. 

Once the lockdown ends, fibre would have shown how it can create a better life for people while still enabling many to continue to do their work. There are lessons to be learnt from this as the country starts accepting this more effective way of working instead of trying to return to how things were.

Fibre has evolved from a luxury to becoming a utility such as electricity and water – one that has become essential to help grow the economy. Fibre will allow customers to accelerate the migration to cloud based services as it provides higher speeds, no contention ratios, and higher reliability. As a fibre network operator, Vox is taking its responsibility very seriously and will use this period as an opportunity to continue serving in the best interests of the citizens of the country.

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DStv Now adds free education to ‘lockdown channels’

In its response to the COVID-19 lockdown in South Africa, DStv is offering 16 free channels on its streaming app

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Two new channels have been added to a free service being provided on DStv Now, the online version of DStv. 

In response to the unfolding COVID-19 pandemic, DStv owner MultiChoice worked with local and international news channels in mid-March to add 24-hour news coverage to the DStv Now free service.

The company says the intent was to help all South Africans stay up to date with announcements and developments, and the results so far are encouraging. Usage of the service has increased 20% since the lockdown began, and peak usage is up 80% compared to pre-crisis peaks. 

 Now, in another step to help families through the lockdown period, MultiChoice has added additional educational content to the free service with the Mindset PoP channel. This channel features educational programming covering the entire General Education and Training (GET) phase, including Early Childhood Development (ECD), as well as a key focus on the Grade 4 – 9 curriculum. 

The channel aims to prepare children for when schools reopen. Mindset PoP will deliver live lessons daily, with six fresh hours every day. A website is available for parents to download worksheets and information sheets to work through with expert teachers. Lessons are based on the South African Curriculum Assessment Policy Statements (CAPS) and are also aligned to the Cambridge curriculum.

“We’re extremely grateful to all of the channel providers for being so willing to work with us to help all South Africans through this unprecedented lockdown period,” said Niclas Ekdahl, CEO of the Connected Video division of MultiChoice. 

“Thanks to their support we’re able to keep people informed, keep kids’ educations going, and keep people entertained.”

The full list of channels available to non-DStv customers on the DStv Now free service is:

100 – DStv

180 – People’s Weather

238 – SuperSport Play

313 – PBS Kids

317 – Mindset PoP

320 – Channel O

343 – TBN

400 – BBC World News

401 – CNN

402 – Sky News

403 – eNCA

404 – SABC News

405 – Newzroom Afrika

405 – AlJazeera

414 – Euronews Now

417 – africanews

To sign up for the DStv Now free service, go to http://now.dstv.com 

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