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Veterans prepare for high-tech to move into high-gear

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If we thought the technology revolution was slowing down, fasten those seat-belts. You ain’t seen nothing yet, industry veterans tell ARTHUR GOLDSTUCK.

The dizzying speed of technology advance over the past 30 years, driven first by the advent of the personal computer, followed by the Internet and then by smartphones, was merely the curtain-raiser for the coming decade.

This view was expressed by one industry executive after another in interviews at last week’s Mobile World Congress (MWC) in Barcelona. And these were no start-up upstarts. These were industry veterans who had been instrumental in some of the landmark products and services that built the information technology industry we know today.

Pat Gelsinger, CEO of cloud computing giants VMware, was the first chief technology officer at Intel and architect of the original Intel 486 processor. As one-time head of Intel Labs, he led many of the research projects in the 1980s and 1980s that would help speed up the pace of high-tech change.

“We are at the dawn of a re-acceleration of the technology industry overall,” he said in an exclusive interview at MWC. “The next decade will see more change and new technology than in the last 20 or 30 years.

“An accelerating crescendo of technologies is coming together: cloud, mobile, big data, robotics, analytics, 3D printing, and more. It will bring together a reinforcing set of innovative activities.

“In the next decade, 75 per cent of the world’s population will have a persistent connection to the Internet with some smart device. Today it’s already 40 per cent. Soon, you’ll be able to touch half the world’s population.”

These devices, he said, will come into their own once intelligence is added.

“I can put intelligence into everything for almost zero cost, so while there are more people than machines connected today, in the next few years there will be twice as many machine-connected intelligent devices as human-connected intelligent devices. It will transform supply chains and our quality of life.”

Emerging markets, including South Africa, may well have “some of the greatest opportunities we have collectively over next decade,” he says. “Would someone in Ethiopia or Zambia be able to buy a $700 iPhone and $100 service? Of course not. But in markets where the price of phone is $20 and a service less than $10, we see rapid innovation around affordable access to core technologies, basic financial services, crop information, trading information.”

Gelsinger offered a fascinating vision of a future that is already possible.

“Tomorrow morning your smart device will wake you, and tell you: ‘last night you had a heart irregularity, so I’m waking you early and uploading your biometrics to the medical cloud, I’m running comparisons of your pattern with everyone in your DNA group. I’ve made a doctor’s appointment and loaded the directions into your self-driving car. I’ve moved your regular coffee order to a different Starbucks on your revised route, and made it decaffeinated because you’re seeing the heart doctor.’

“None of that is unreasonable to implement, but the results are life-changing.”

These sentiments were echoed by Frank Kern, chief executive officer of Aricent, a global technology services company with more than 12 000 staff focused on software and hardware innovation. He spent 30 years with IBM, including heading up its core consulting division, Global Business Services. He came out of retirement to take up the challenge of the future.

“This is the most exciting time yet,” he says. “Before, I was just in the boring old computer industry.

“I was around when IBM did a lot of interesting stuff. We created a services business, I ran the consulting business, and in 2009 I created an analytics practise with 9 000 people, worth $25-billion.

“But today is the most exciting time of all. It’s a time when you have a combination of an explosion of sensors, accelerating of communications, combined with the software capabilities of AI, and now we are designing the user interface of the future, the customer experience of the future.”

Aricent owns a renowned strategy and design company, frog, which was responsible for the design of several Apple computers, along with hardware for numerous global organisations. The parent company has also been in research and development of software for 25 years, with a strong focus on telecommunications, and taking a leading position in 5G, AI and autonomous vehicle software.

“We are able to see and participate in multiple trends going on, and all are accelerating at same time. It’s not only one thing right now; it’s all these things that, together, are creating this exciteme.”

Gelsinger puts it neatly into perspective.

“All of this gives me an almost child-like enthusiasm. I’ve been in the technology industry for 37 years. If you ever used a microprocessor or a USB drive, I helped do all of them. But, in many cases, the next decade is as exciting as the last three decades. Because so many of these things will become life-changing and business-changing.”

  • Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter and Instagram on @art2gee

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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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