A simple concept that could transform computing lies at the heart of the complex “new” tech discipline known as virtualisation, writes ARTHUR GOLDSTUCK.
Imagine that any smartphone you use can be turned into that of any brand you want. It may sound absurd in a world of deadly rivalry between Apple, Samsung and the like. But then imagine that any auomatic teller machine can instantly adopt the brand of your bank the moment you slip in your ATM card. Suddenly, that doesn’t sound so absurd. In fact, the possibility is closer than we may think.
It is made possible by a relatively new and complex information technology discipline called virtualsation, which allows for “virtual machines” to be created in data centres, on central computers called servers. A server can house any number of these virtual machines, which are tied to specific user identities. Log in with the appropriate details, and your personalised machine appears, with very specific applications and content specific to your role in an organisation.
The concept goes hand in hand with cloud computing, which allows applications, content and processes to be accessed from anywhere, on any device, at any time.
These concepts lay behind the creation of WMware, one of the world’s largest providers of cloud computing systems and until recently a subsidiary of storage leaders EMC. When computer giants Dell announced last year they would buy EMC for a record $67-billion, VMware was described as one of the jewels in the acquisition, and remained a separately listed company, with the new Dell Technologies as controlling shareholder.
It’s not hard to see why: the company keeps pushing the boundaries of what is possible in both cloud computing and virtualisation. At its recent VMworld conference in Barcelona, it unveiled new releases of most of its solutions that help companies streamline their IT operations. In combination, these solutions make up VMware’s Cross-Cloud Architecture, which enables companies to run, manage, connect, and secure their applications across any device or cloud service – now including market leaders Amazon and Microsoft – as if they are in their own customised environment.
Because virtual machines are dictated by software rather than hardware, and consumers and corporations alike are seeing their high-tech worlds defined by that software, it becomes easier to envisage smartphones, ATMs or any other hardware adapted to the purpose or preference of the moment. It makes sense, but it also requires a new mindset.
“We are now the psychologists of information, because we have to transform the way people think about techbology,” said Ian Jansen Van Rensburg, VMware Southern Africa’s senior manager for systems engineering, speaking at Vmworld. Ironically, however, South African techies are harder to convince than their counterparts in the rest of Africa.
“In South Africa, if you tell a storage guy his business is going to be a software business, and he’s just invested heavily in storage hardware, he’s probably not going down that route. Yet, everything is becoming software-defined, and people need to wrap their heads around this.”
The real irony is that, in the rest of Africa, far less has been invested in hardware, and the leap to software-defined data centres is far easier from a mindset point of view. Even more ironically, employees who once depended entirely on the IT department for assistance and resources are now bypassing IT administrators so that they can get what they need, when they need it.
For example, marketers who want to share large files online for an urgent project are no longer waiting for the techies sitting in the IT department to approve the budget or set up the appropriate “architecture” for file-sharing. Instead, they log on to the Dropbox online storage service, whip out their personal credit cards and pay for extra capacity. The cost is then charged to routine project expenses.
It may not make a big difference when it is a Dropbox here and a Google app there, but it adds up when such habits graduate to serious business applications. The combination costs so much, yet is not going through the IT budget, that the company has a distorted picture of what is being spent where.
VMware previously called this kind of spending “Shadow IT”, meaning it lurks unseen in the shadows of the IT budget. VMware CEO Pat Gelsinger, in his keynote address at the conference, used a new term, “self-starting IT”, referring to the ability of any tech-savvy staff members to become their own IT providers.
But help is at hand, says Matthew Kibby, VMware regional director for sub-Saharan Africa.
“Users were frustrated because the IT department couldn’t deliver an application to them fast enough. Eventually they got fed up and went to Amazon Web Services or Microsoft Azure and quickly got it off the cloud. VMware’s vision is is to give that control back to IT and say, you are now in control of your IT infrastructure, whether it’s being rolled out on a company laptop or a personal smartphone.
“We not only need to give them back that control, but do it along with the look and feel of being able to access any device from any application anywhere in the world. That’s exactly what the Cross-Cloud Architecture will achieve. We want to make the IT department or Chief Information Officer the new hero of the company again.”
VoD cuts the cord in SA
Some 20% of South Africans who sign up for a subscription video on demand (SVOD) service such as Netflix or Showmax do so with the intention of cancelling their pay television subscription.
That’s according to GfK’s international ViewScape survey*, which this year covers Africa (South Africa, Kenya and Nigeria) for the first time.
The study—which surveyed 1,250 people representative of urban South African adults with Internet access—shows that 90% of the country’s online adults today use at least one online video service and that just over half are paying to view digital online content. The average user spends around 7 hours and two minutes a day consuming video content, with broadcast television accounting for just 42% of the time South Africans spend in front of a screen.
Consumers in South Africa spend nearly as much of their daily viewing time – 39% of the total – watching free digital video sources such as YouTube and Facebook as they do on linear television. People aged 18 to 24 years spend more than eight hours a day watching video content as they tend to spend more time with free digital video than people above their age.
Says Benjamin Ballensiefen, managing director for Sub Sahara Africa at GfK: “The media industry is experiencing a revolution as digital platforms transform viewers’ video consumption behaviour. The GfK ViewScape study is one of the first to not only examine broadcast television consumption in Kenya, Nigeria and South Africa, but also to quantify how linear and online forms of content distribution fit together in the dynamic world of video consumption.”
The study finds that just over a third of South African adults are using streaming video on demand (SVOD) services, with only 16% of SVOD users subscribing to multiple services. Around 23% use per-pay-view platforms such as DSTV Box Office, while about 10% download pirated content from the Internet. Around 82% still sometimes watch content on disc-based media.
“Linear and non-linear television both play significant roles in South Africa’s video landscape, though disruption from digital players poses a growing threat to the incumbents,” says Molemo Moahloli, general manager for media research & regional business development at GfK Sub Sahara Africa. “Among most demographics, usage of paid online content is incremental to consumption of linear television, but there are signs that younger consumers are beginning to substitute SVOD for pay-television subscriptions.”
New data rules raise business trust challenges
When the General Data Protection Regulation comes into effect on May 25th, financial services firms will face a new potential threat to their on-going challenges with building strong customer relationships, writes DARREL ORSMOND, Financial Services Industry Head at SAP Africa.
The regulation – dubbed GDPR for short – is aimed at giving European citizens control back over their personal data. Any firm that creates, stores, manages or transfers personal information of an EU citizen can be held liable under the new regulation. Non-compliance is not an option: the fines are steep, with a maximum penalty of €20-million – or nearly R300-million – for transgressors.
GDPR marks a step toward improved individual rights over large corporates and states that prevents the latter from using and abusing personal information at their discretion. Considering the prevailing trust deficit – one global EY survey found that 60% of global consumers worry about hacking of bank accounts or bank cards, and 58% worry about the amount of personal and private data organisations have about them – the new regulation comes at an opportune time. But it is almost certain to cause disruption to normal business practices when implemented, and therein lies both a threat and an opportunity.
The fundamentals of trust
GDPR is set to tamper with two fundamental factors that can have a detrimental effect on the implicit trust between financial services providers and their customers: firstly, customers will suddenly be challenged to validate that what they thought companies were already doing – storing and managing their personal data in a manner that is respectful of their privacy – is actually happening. Secondly, the outbreak of stories relating to companies mistreating customer data or exposing customers due to security breaches will increase the chances that customers now seek tangible reassurance from their providers that their data is stored correctly.
The recent news of Facebook’s indiscriminate sharing of 50 million of its members’ personal data to an outside firm has not only led to public outcry but could cost the company $2-trillion in fines should the Federal Trade Commission choose to pursue the matter to its fullest extent. The matter of trust also extends beyond personal data: in EY’s 2016 Global Consumer Banking Survey, less than a third of respondents had complete trust that their banks were being transparent about fees and charges.
This is forcing companies to reconsider their role in building and maintaining trust with its customers. In any customer relationship, much is done based on implicit trust. A personal banking customer will enjoy a measure of familiarity that often provides them with some latitude – for example when applying for access to a new service or an overdraft facility – that can save them a lot of time and energy. Under GDPR and South Africa’s POPI act, this process is drastically complicated: banks may now be obliged to obtain permission to share customer data between different business units (for example because they are part of different legal entities and have not expressly received permission). A customer may now allow banks to use their personal data in risk scoring models, but prevent them from determining whether they qualify for private banking services.
What used to happen naturally within standard banking processes may be suddenly constrained by regulation, directly affecting the bank’s relationship with its customers, as well as its ability to upsell to existing customers.
The risk of compliance
Are we moving to an overly bureaucratic world where even the simplest action is subject to a string of onerous processes? Compliance officers are already embedded within every function in a typical financial services institution, as well as at management level. Often the reporting of risk processes sits outside formal line functions and end up going straight to the board. This can have a stifling effect on innovation, with potentially negative consequences for customer service.
A typical banking environment is already creaking under the weight of close to 100 acts, which makes it difficult to take the calculated risks needed to develop and launch innovative new banking products. Entire new industries could now emerge, focusing purely on the matter of compliance and associated litigation. GDPR already requires the services of Data Protection Officers, but the growing complexity of regulatory compliance could add a swathe of new job functions and disciplines. None of this points to the type of innovation that the modern titans of business are renowned for.
A three-step plan of action
So how must banks and other financial services firms respond? I would argue there are three main elements to successfully navigating the immediate impact of the new regulations:
Firstly, ensuring that the technologies you use to secure, manage and store personal data is sufficiently robust. Modern financial services providers have a wealth of customer data at their disposal, including unstructured data from non-traditional sources such as social media. The tools they use to process and safeguard this data needs to be able to withstand the threats posed by potential data breaches and malicious attacks.
Secondly, rethinking the core organisational processes governing their interactions with customers. This includes the internal measures for setting terms and conditions, how customers are informed of their intention to use their data, and how risk is assessed. A customer applying for medical insurance will disclose deeply personal information about themselves to the insurance provider: it is imperative the insurer provides reassurance that the customer’s data will be treated respectfully and with discretion and with their express permission.
Thirdly, financial services firms need to define a core set of principles for how they treat customers and what constitutes fair treatment. This should be an extension of a broader organisational focus on treating customers fairly, and can go some way to repairing the trust deficit between the financial services industry and the customers they serve.