Business Review Asia magazine - December 2017 by Business Review Asia

China’s war on pollution and opportunities for western business

NUTANIX and the rise of data storage applications

D e c e mb e r 2 017

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FOREWORD WELCOME TO THE December edition of Business Review Asia. This month we have included a lead feature on Nutanix, a company which has a high presence in Asia producing cloud infrastructure. President Sudheesh Nair speaks to Kieron Bain about how ecommerce can be impacted by intelligent storage. We also have a feature on China’s continued ‘war on pollution,’ with David Wright of Turquoise Venture Capital offering valuable insight into how western business can benefit from new opportunities as China seeks to move away from traditional energy and curb its carbon footprint. For this month’s Top 10, we have looked at Asia’s 10 richest businessmen – who has moved up from last year and why? Be sure to check out our company reports from Okada Manila, BNP Paribas Cardif, Bollore Logistics, URBAN REVIVO, BBM and Digital Realty. As always, we hope you enjoy the magazine and welcome your feedback on Twitter see you in 2018 when we look forward to sharing our widest variety of features yet.

Enjoy the issue! www.businessreviewasia.com www.bizclikmedia.com

F E AT U R E S

10 NUTANIX and the INTERVIEW

rise of data storage applications China’s war on pollution and opportunities for western business

22 INSIGHT

ASIA’S

TOP 10

RICHEST BUSINESS LEADERS

C O M PA N Y PROFILES

BBM

TECHNOLOGY

Okada Manila SUPPLY CHAIN

BNP Paribas Cardif SUPPLY CHAIN

December 2017

BollorÃ© Logistics

SUPPLY CHAIN

URBAN REVIVO SUPPLY CHAIN

100

110

Digital Realty TECHNOLOGY

INTERVIEW

NUTANIX AND THE RISE OF DATA STORAGE APPLICATIONS President Sudheesh Nair gives the inside track on the power of intelligent storage to evolve ecommerce Written by KIERON BAIN

INTERVIEW COMPUTING POWER IS increasing exponentially. Symbiotic relationships occur when new machines interface with the raw, unpredictable real world, enabling humanity to rapidly adapt to constant change. Data is the lifeblood of this process; greater quantities of data increase the precision of accurate modelling leading to more efficient, streamlined results. But how will these swathes of numbers be managed within a limited processing environment? Nutanix, a US-based hyperconvergence expert with a considerable footprint across Asia, is constructing the architecture necessary to predictively pipe information where it is needed. We spoke to Sudheesh Nair, president of Nutanix to understand how this company’s innovative approach is revolutionising the way

commerce uses storage solutions. Early days Sudheesh met with the founders of Nutanix in 2001, while working in the Bay area start-up culture. Each went their separate ways, either to larger organisations like Google or back into the foray of innovation, but upon regrouping in 2009 the idea for the company that evolved into Nutanix was born. An expert was required to take the beta and alpha products to market and manage field operations. Sudheesh’s name was thrown into the hat. Speaking about the early days, he observes: “Most major startups have two or three diversions from the original mission. This wasn’t the case with Nutanix. “Our vision engages two disciplines: the first is the public cloud and the

“OUR VISION ENGAGES TWO DISCIPLINES: THE FIRST IS THE PUBLIC CLOUD AND THE SECOND IS THE BRIDGE BETWEEN THE CONSUMER’S ARCHITECTURE AND THEIR OWN CHOICE OF PUBLIC CLOUD VENDOR” SUDHEESH NAIR President of Nutanix 12

December 2017

SUDHEESH NAIR President of Nutanix

INTERVIEW second is the bridge between the consumer’s architecture and their own choice of public cloud vendor.” Storage as an application How did the company evolve from this initial point? “The next step was to take storage and virtualise it as an application, before releasing it as a product. We called this hyperconvergence. While many of the established giants of the hardware industry made millions of dollars selling storage arrays, our application distributes data and utilises storage across the entire network. “There’s no need for a monolithic machine with this dynamic environment that provides capacity where required. Think about how computers take other technologies like music players, video editing equipment and calculators and create them as software applications. Nutanix replicates this idea with storage.” As an example, Sudheesh illustrates: “You’re running a storage intensive system. You have a couple of choices. Either you purchase storage only nodes with reduced processing power or you select an application capable of intelligently managing the 14

December 2017

storage on your network. Factor in technology that predicts what data will be accessed by your processes and you have a fast swap system that can be constructed on large computational units with very little storage capacity.” Idea evolution After developing this powerful storage application, it was time for Nutanix to go further. Regarding the evolution of the business, Sudheesh explains: “Our mission was not to simply build hyperconvergence. It was much more than that. Virtualisation is powered by VM-ware, developed in 2001, allowing processing time to become a commodity as you split workloads between servers.” “We wanted to allow our clients to commercially exploit storage in a similar fashion by building Acropolis, a new virtualisation software that delivers on three fronts. One: support for both VMs and containers natively. Two: the security that is necessary for a hybrid cloud environment. Three: the ability to move workloads between data centres.” Moving away from the innovationspace, Sudheesh discusses how Nutanix engages the business world with these high-powered and agile

Nutanix’s Acropolis, a new virtualisation software

storage applications. “As much as I like talking about hyperconvergence, companies don’t care about this technology. Pressure is coming from consumers to increase the number of services available to them. The final part of the puzzle is making entire systems invisible. All end-users and IT teams see is the application. They don’t need to be concerned with how the solution works or fits into their existing architecture. “We call this Prism. It positions the right application at the right node at the right time, allowing the management complexity to be

significantly reduced. Tech teams still retain access to full system analytics to understand how the storage application is being utilised, but do not have to approve every decision on the network.” Approaching markets – a competitive stance All of this sounds both innovative and attractive. Ask anyone who works in large corporate organisations, however, and they will inform you that change is a difficult and often arduous process. How does Nutanix plan to engage larger clients? 15

â&#x20AC;&#x153;In China we partner with Lenovo, helping us with distribution across Asia. They recommend our solution, and we have found that trust between them and their clients is more important than knowledgeâ&#x20AC;? SUDHEESH NAIR President of Nutanix 16

December 2017

INTERVIEW Sudheesh discusses the company’s acquisition and development strategy. “To gain traction you need a really good go-to-market machine. And our creativity stretches across all disciplines. When we started we did not have legacy customers holding us back. This allowed us to innovate within the customer engagement sphere. Combine this with automated level one and two support functions as a cornerstone in building our approach from the ground up. “We partner sellers on a worldwide basis. Our philosophy is to become a local-global company. You need a degree of location-sensitive savvy, achieved through strong relationships. In China, we partner with Lenovo, helping us with distribution across Asia. They recommend our solution, and we have found that trust between them and their clients is more important than knowledge. This market has been burned from making relationships with US startups which have failed to deliver.” Broaching Frontiers – New Attitudes To cope with the evolving attitudes of today’s marketplace, Sudheesh

explains Nutanix’s philosophy: “Our sales organisation is very engineeringcentric – the days of salesmen going places and delivering a brochure are over. Social media has replaced a large degree of the sales process. “When a customer gives you an hour, this is an opportunity to show how you will customise your product to fit in with their aims, needs and objectives. ‘Show up and throw up’ selling has had its day. Companies know your product. They want to know how your solution will solve their specific problem.” Hyperconvergence – Tonic for All? Does Sudheesh believe that hyperconvergence should be implemented by all companies? “Replacing traditional architecture is not the game,” he argues. “Think about how long it takes to set up a sequel server, together with the management fabric and support functions. If the public cloud is more cost-effective, business will be driven towards this environment. There are disadvantages however; companies are locked into public cloud APIs and they have lost control of the 17

INTERVIEW architecture in favour of the vendor. â&#x20AC;&#x153;Our viewpoint is very simple. Processes should be simple without the need for employees plugging in cables or writing code. Hyperconvergence is the platform on which the enterprise cloud is constructed. Virtualisation stack, automated stack, self-service capabilities, mobility between public cloud; these pieces come together to deliver a public cloud experience with allowing the customer to use the facility in line with their own expectations.

Broadcasting the message To help companies understand hyperconvergence, Nutanix launched the .Next series of lectures. Sudheesh expands on this potential learning experience: â&#x20AC;&#x153;There are two conferences. One in the US, the other in Europe. We want to get our customers together and get them sharing information on how they utilise hyperconvergence within their business. With .Next on tour, we take this forum out on a worldwide basis to interact with local customers, using our local-global approach. It is not about selling, but rather a resource

About Nutanix: Our Journey to the Enterprise Cloud

December 2017

“With .Next on tour, we take this forum out on a worldwide basis to interact with local customers, using our local-global approach. It is not about selling, but rather a resource pooling exercise that allows Nutanix to better understand customers, industry trends and movements.” SUDHEESH NAIR President of Nutanix

pooling exercise that allows Nutanix to better understand customers, industry trends and movements. “I have learned that no-one can sell our product better than our customers. If I can put 10 prospects and one hundred customers in a room, then I am going to walk away with more potential new business than any activity I can lead on my own.” The future What is the future for Nutanix? With technology embedded in many aspects of modern life, hyperconvergence could enable new subsidiary technologies to blossom. “We are experiencing a large degree

of activity in the world of IoT (internet of things) as hyperconvergence allows the data generated by cars, oil rigs, shipping tankers, aircraft and every device to be collated and utilised to build an electronic map of the world. What do you do with this amount of data? Nutanix takes the cloud to the process.” “This is a very exciting process for us. At the beginning of November, we plan to explore our new product Intelligent Edge with the upcoming set of .Next tours. We will require more partnerships with bigger players, such as Google, one of the leaders in machine thinkers. We want to be an integral part of the oncoming rise of IoT.” 19

Chinaâ&#x20AC;&#x2122;s war on pollution and opportunities for western business

INSIGHT China’s increasing efforts to tackle pollution are about more than clearing the air – they point to a more developed nation and new opportunities for the west Written by OLIVIA MINNOCK

IN 2014, CHINA’S Premier of the State Council, Li Keqiang, declared a “war on pollution”, citing the smog enveloping China as “nature’s red-light warning against inefficient and blind development”. He pledged to reduce steel and coal-based electricity production among other initiatives. Since then, China has been making inroads into reversing the damage and is making moves into the wider world to gain technology and expertise in its battle with smog. This may not only present opportunities for China, but for western business too. It has also made pledges progressing from vague goals to legislative targets, to try and curb pollution and move towards sustainability. According to David Wright, Director for China at Turquoise International, a UK-based investment bank, this is essential if China is to become

the developed, globally-connected nation it wishes to be. At the Communist Party Congress this October, president Jinping Xi pledged to open China’s doors wider and continue to battle climate change. Wright comments: “One of the things that Xi was saying was that China will continue to open up and connect to the world, and that’s all part of this strategy of how China can be developed and stable country.” “When I left Beijing in 2014, the air was dangerous. It has moved from just being annoying to actually being dangerous and I think that’s the issue with water, soil and air in China. If they want long term stability and growth, this is a very key part of achieving that.” Wright feels China’s efforts to deal with pollution are “heavily linked with macroeconomic strategies and the development of China in general”. However, this development is 23

INSIGHT no mean feat. As industry booms, reductions in pollution levels waver. This year, China’s manufacturing industry reportedly grew at its fastest pace since 2012 – and this may have helped to scupper China’s hitherto progressive improvements in air quality. Between January and July 2017, air quality worsened, with the 12 cities in Northern China reportedly seeing an 11.3% increase in PM2.5 and other harmful particles – the first rise since 2013. This resulted in a crackdown to meet 2017 targets, with some cities pledging to halt steel production for the winter months. The Ministry for Environmental Protection also launched a yearlong special inspection. One of China’s recently announced plans includes moving exclusively to ethanol-based gasoline by 2020 – which will not only tackle pollution problems in the world’s biggest car market but also use up stockpiles of corn – and ending the sale of petrol and diesel cars in favour of electric or hybrid equivalents, though the timetable for this remains to be finalised. In addition, 2016 saw just 3mn 24

December 2017

tonnes of renewable fuel being used, and China will need to up this to meet targets – but it has pledged to produce biofuel “on a large scale” by 2025. According to Wright: “A lot of this is coming right from the top, this is a strategic focus. As air pollution has got so bad, it’s become a real social issue – there’s a lot of potential for social unrest because of air and water pollution and problems with food, which has resulted in an increase in imported western food over the last few years.” Indeed, in 2014, agricultural pollution was named as a huge problem and 8mn acres of China were believed to be too polluted by heavy metals to grow crops. China is investing on a national and provincial level in new technologies to solve the crisis. Wright says: “There’s a few big environmental tech conferences put on mainly by local governments in China, for example, the Yancheng local government has really been pushing environmental tech and wants to be known as a hub of excellence, so they’ve got a lot of universities to conduct their environmental technology research there… the

h t i h w t l i a w e l d a o e t d s o t t orrts ff e o s ff ’ e a s n ’ i a h n C i “ h C “ thh i w t i d e w k d n e i l k n y i l l i vily a e v h a e e r h a e r n o a i t n u o l i e h t ppoolllut e d h t n a d s n e a i s g e e attegi r t s a r c t i s m c i o n m o o c n e o ” maaccrrooec l a r ” m l e a n r e e g n n e i g a n i n hiina C f h o C t f n o e t n m e p o m l p e HTT ddeevvelo IGH RIG WR AVID W DAVID D

INSIGHT local government gives incentives like free rent and various grants.” The government has also used technology to allow its citizens to keep tabs on pollution, building a network of monitors to track PM2.5 with data made available publicly to smartphone users who can track local air quality, with the option to report breaches in pollution levels. An international affair Indeed, China’s efforts heavily involve opening up to other nations, another important point discussed at the congress. “Xi mentioned China is going to focus on an equal deal for western companies as well as Chinese companies. In the last few

December 2017

years there’s been a real openness and desire, particularly by local governments in China, to support and bring in western business.” In August, China’s Minister for Environmental Protection Li Ganjie called for closer cooperation between China, South Korea and Japan in the improvement of air quality. According to Xinhau, Li said that improving air quality was a priority of common concern for the three countries, and was the first area of cooperation under an action plan for the period from 2015-2019. He praised the previous work of the countries in tackling air pollution and sandstorms, and expressed hope that “the three sides would continue giving full play

KEY FACTS • PM2.5, or “particulate matter, 2.5 micrometres or less,” is a harmful combustion particle found in air which is a known cause of respiratory and cardiovascular illness. • David Wright is Turquoise International’s Director for China and has over 15 years of experience working with companies in China. He has been a director at Turquoise for two years. • Turquoise is a UK-based Investment Bank which mainly focuses on energy, environment and efficiency. It was founded in 2002.

to their respective advantages, and share experiences on environmental protection on the basis of mutual respect and win-win cooperation”. China has some big goals it cannot achieve alone. Wright comments: “In some ways, regulation is getting tighter in China in that what they need to achieve is further on than in Europe or North America. For example, China wants to be the leading electric car manufacturer in the world, so their market is ahead of Europe and North America as the government urges manufacturers to come up with solutions. In many ways, they are leapfrogging in terms

E’’SS R E E H R T E S H T R A S E R Y W YEA FEEW T S F A T L S E A L H T E H N D ND A ““IIN T N S S A E S N S E N E N P N O E ALL OP REEA AR NA L A C L BBEEEEN O A L C Y O L B Y Y L B R AR LY ULLA C I U T C R I A T P R , A E P R , I RTT E O P R DEESSIR P O U P D S P O U S T , O A T NA, HIIN CH N I C S N T I N S E T N M E N RNM ESSSS”” N I E S N U I GGOOVVEER B S U N B R E N T R WEESSTE N I W G N I N I G R N B I R D B N AND HTT A IGH RIG WR ID W DAAVVID D

December 2017

INSIGHT of regulations and support. China is already asking more from their domestic regions than the west.” Opportunities for the west “If it’s done right there’s a real opportunity for western businesses entering or growing in China… it can be harder, but there seems to be an increasing amount of support from the Chinese government for western businesses in China,” continues Wright. As for the UK companies Turquoise deals with, “there are a lot of UK acquisitions going on, but a lot of it is western companies pitching to the Chinese to see if they’re interested or not. There’s been a lot of hesitation or feeling that it’s a lot of hassle dealing with Chinese investors, because of the history where there’s been previous outbound investment from China, mainly from state-owned enterprises of high-level individuals. It hasn’t been particularly commercial.” Now, however, things are changing. “The big move for outbound investment is that a lot of it is now coming from listed companies in China which are more commercial. “Everyone at a big level and lots of companies at a smaller, venture

capital, early stage level, are trying to get in – but at that level I think it’s harder to have the resources and spend the money that’s needed. Across the board, China is recognised because of the size of the market but also because the central government is really encouraging development. “One of our portfolio companies, Bactest, a UK water tech company, has partnered with a Beijing sewage treatment utility to trial their technology, and they’re working on a few more links. “We have just last month closed a deal where we helped a Chineselisted company buy an aviation heating company in the UK – as far as we’re aware, this is one of the first deals that’s involved a westernbased advisor with a Chinese-listed company on an outbound acquisition.” China’s proactivity and willingness to reach beyond its borders will not only prove helpful in developing the nation, but lucrative for those western businesses willing to dive into the market: “There’s going to be an increasing amount of outbound investment which is really worth, from a UK perspective, finding out about and getting involved in.”

TOP 10

ASIAâ&#x20AC;&#x2122;S TOP10

BUSINESS LEADERS

Business Review Asia takes a look at the richest business people in the region, updating Business Insiderâ&#x20AC;&#x2122;s 2016 list to see whatâ&#x20AC;&#x2122;s changed and how these billionaires have developed their fortunes Writ ten by Olivia Minnock 31

TOP 10

Dilip Shanghvi

CEO, Sun Pharmaceuticals Forbes reports Dilip Shanghvi’s reala decrease from the $16.4bn Business

Image credit: www.miui.com

Insider reported for 2016, but still a

Lei Jun

healthy ninth place on the list. The 61-year-old was the richest man in India for a period in 2015, briefly dethroning Mukesh Ambani. Shanghvi founded Sun Pharmaceuticals in 1983 with an investment of $1,000 – the company now has a revenue of $4.54bn and employs

CEO, Xiaomi

17,520 people. Sun has segments in US,

In 2016, Business Insider reported Lei

India, Western Europe, Canada, Australia,

Jun was worth $14.4bn – however, for

New Zealand and other regions.

Image credit: https://www.flickr.com/photos/dasphoto/17191672511

time worth in October 2017 as $11.8bn,

October 2017, Forbes reported his net worth to be just $6.8bn. The 44-year-old is based in China and chairs Xiaomi, which he co-founded in 2010. Xiaomi is a tech unicorn and became the fourth largest smartphone producer in the world and the biggest in China, within about thre years of its founding. At present it is the fifth largest supplier of smartphones worldwide, holding about 6.2% of market share. Prior to the foundation, Lei was CEO of Chinese software company Kingsoft which he took public in 2007. Between his resignation from Kingsoft and founding Xiaomi, the billionaire continued to make his fortune as a venture capitalist. 32

December 2017

Image credit: www.alwaleed.com.sa

Alwaleed bin Talal bin Abdul Aziz al Saud Investor

Prince Alwaleed bin Talal Alsaud was stated to be worth $22.5bn by Business Insider last year and now has a Forbes real-time Net worth of $17.8bn. The 61-year-old Saudi Arabian Prince has invested wealth inherited from his grandfather, the first ruler of the Kingdom of Saudi Arabia, across the US and Middle East in areas like real estate, entertainment and education. He currently has stakes in Twitter, the Four Seasons, Time Warner and Motorola. In 2016, Prince Alwaleed gained a stake in Uber competitor Lyft, leading a $247.7mn investment.

08 Image credit: Copyright by World Economic Forum

Azim Premji

Chairman, Wipro Ltd Azim Premji is a 71-year old tech businessman who runs Wipro, inherited from his late father. The company is now an IT giant and Premji’s worth was stated to be $16.5bn in 2016 but now amounts to $19bn. Wipro is a global IT service provider with sectors providing strategy advisory, engineering, maintenance, analytics, thirdparty IT products and databases, among other products and services. Wipro currently employs 160,000 people and has a current revenue of

$8.47bn. Premji is listed by Forbes as the second richest man in India and the 15th “richest in tech.” 33

Wang Jianlin

Owner, Dalian Wanda Group In 2016, Business Insider put Wang Jianlin’s worth at $29.6bn. At present, the 62-year-old Chinese billionaire is valued at $29.7bn. The real estate tycoon owns Dalian Wanda Group, China’s largest commercial

Lee Shau Kee

Owner, Henderson Land Development A huge increase in Lee Shau Kee’s net worth has brought him up to a Forbes value of $29.4bn in 2017. Business Insider placed him on its 2016 list but he was attributed with a lower value of $18.5bn. Lee made his fortune in real

Legendary Entertainment for $3.5bn. In 2016, Wang was awarded the Malcolm S Forbes Lifetime Achievement Award, and became the first Chinese mainland entrepreneur to be commended in this way. Wanda recently began construction on a structure in Chicago worth $900mn. Image credit: www.wanda-group.com

Image credit: www.hld.com

property company. He also recently bought

estate in Hong Kong and is now 88 years of age. He founded Henderson Land Development in 1973 and the company now generates average annual sales of about $3bn. Henderson is based in Hong Kong and it holds stakes in Towngas and Hong Kong Ferry. In total, Lee’s company employs 7,730 people and has a current revenue of $3.6bn. 34

December 2017

Image credit: www.lksf.org

TOP 10

Mukesh Ambani

Chairman, Reliance Industries Mukesh Ambani was reportedly worth 24.8bn in 2016 and now holds a real time net worth of 38,9bn according to Forbes. The 59-year-old was named the richest man for the 10th year in a row in 2017, and lives in the world’s costliest home, Antilla. The 27-storey mansion in Mumbai cost

Li Ka-shing

Chairman, CK Hutchinson Holdings

$1bn. He took over Reliance Industries from his father in 2002 and the petrochemical, oil and gas company now has a revenue of $56bn. As stocks in Reliance rose in early 2017, Ambani briefly overtook Bill Gates as the world’s richest man. Reliance added $15.3bn to Ambani’s personal wealth last year, which increased by 67%.

Li Ka-shing was stated to be worth $19.5bn in 2016 and now has a value of $34.5bn according to Forbes. The 88-year-old has made his fortune in diversified investments in Hong Kong and owns CK Hutchinson Holdings The company mainly engages in port operation and also has retail, infrastructure and energy segments, as well as engaging in financial business. The group employs a total of 178,800 people. In September 2017, it was announced Li was entering into a partnership with Alibaba head and fellow billionaire, Jack Ma, to bring a digital wallet service to Hong Kong.

03 35

TOP 10

Jack Ma

CEO, Alibaba Jack Ma was valued by Business Insider at $26.5bn but the Alibaba chairman now boasts a real-time value of $39bn, and is constantly neck-and-neck with the top member of this list. Alibaba is one of the largest e-commerce businesses in the world and Alibaba Group Holdings engages in online and mobe commerce through several subsidiaries which operate in China and internationally. It is involved in cloud computing, media entertainment and logistics. Ma has also invested in Huayi Brothers and Beijing Enlight Media, entertainment companies in China. Alibaba has recently partnered with Mexico to allow the country to more easily export to China. Alibaba has also pledged to invest $15bn in research and development with the opening of its Academy of Discovery, Adventure, Momentum and Outlook, and as such Maâ&#x20AC;&#x2122;s business is set to go from strength to strength. The 52-year-old started China Yellow Pages in 1988 before going on to found Alibaba in 1991.

December 2017

Ma Huateng CEO, Tencent

While Business Insider put Ma Huatengâ&#x20AC;&#x2122;s 2016 worth at $17.1bn, his real-time value is currently just over Jack Maâ&#x20AC;&#x2122;s at $39.8bn. The founder of Tencent Holdings is currently aged 45 and also owns stakes in 58.com and Glu Mobile. Tencent was founded in 1998, when Ma was just 26, and became incorporated in 2004. The company currently employs 40,680 people and has a revenue of $3.28bn. Tencent Holdings, through its subsidiaries, provides media, entertainment, e-payment systems, value-added service for smartphones and online media among other services across China. Tencent is consistently named one of the 10 most valuable companies in the world. Tencent owns popular Chinese web chat service, WeChat, which has recently launched WeChat Pay, which allows its 1bn+ users to make e-payments with their smartphone.

01 37

A digital ecosystem Written by Dale Benton Produced by James Pepper

Breaking free from BlackBerry, BBM is embarking on a major growth throughout Indonesia, transcending beyond simple instant messaging

n the modern world, everything is instant. Entertainment continues to find ways to be in the palm of our hands and at our very fingertips - it has to be, we demand it. As the world continues to become more and more digital, consumers demand more and more of their needs to be readily available and hosted in one simple location. Utilities, e-commerce, social media, television, accessible at the push of one button. Instant messaging used to be exactly what it implies, a form of contact that was fast and easy to use. But now, even instant messaging has had to transform, as “chat” is very much the killer application, enabling instant messaging companies to expand into becoming ecosystems, bringing together chat, social, content and commerce. Most will have heard of the likes

December 2017

of WeChat in China, LINE in Japan, Kakao Talk in Korea as instant messaging companies that have made this transformation already, but BBM in Indonesia is also one that comes into the fray. Born out of BlackBerry, best known to the general public as the former developer of the BlackBerry brand of smartphones and tablets, has transitioned itself to an enterprise software and services company. As an instant messaging service, BBM was very much a consumer dominated product, but as BlackBerry shifted its focus to enterprise, it no longer fit the parent company’s direction and BlackBerry looked for options to maximise its value going forward. In 2016, Creative Media Works, a division of PT Elang Mahkota Teknologi Tbk (Emtek) – one of Indonesia’s largest media, content and social

TECHNOLOGY

Matthew Talbot Matthew Talbot is chief executive officer of BBM. He brings to his role more than 20 years of technology industry leadership, international management, and extensive sales and marketing expertise in mobility and cloud technologies, financial services, telecommunications, and consumer content in both start-up and public company environments. BBM is one of the largest and the world’s first mobile

CEO, BBM

messaging app. Moving beyond Blackberry devices with over 100 million installs on Android, iOS, and Windows, BBM has evolved from a pure messaging application for communication (text and video) to a social ecosystem unifying Chat, Social, Commerce, Services and Ads. On 27 June 2016, Creative Media Works, a division of PT Elang Mahkota Teknologi Tbk. (Emtek, IDX:EMTK) Indonesia’s largest media, content and technology

business - announced a strategic alliance with BlackBerry to accelerate BBM’s research and development in offering new and exciting features, services and content to the global consumer market. Creative Media Works now operates under the BBM banner as a stand-alone consumer focused business with offices in Waterloo, Mississauga, Ottawa, Singapore, Jakarta, UAE and South Africa.

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networking business - announced payments (utility payments, top-ups) a long-term strategic alliance to comics, shopping, travel, career, accelerate consumer BBM’s research sports, transportation, coupons, and development in offering new and subscriptions, beauty, sports and polls. exciting features, services and content This ecosystem, as Talbot notes, is to the global consumer market. all centred around one unifying vision. “BBM is actually 12 years old this “It’s the goal of making sure that year,” says Matthew Talbot, CEO of in a day in the life of a consumer, the Creative Media Works (CMW), the one app that people go to is BBM, company which has the as it can connect all their daily license to operate, services, social experience develop and run and content at their BBM Consumer fingertips,” he says. globally. “For a Since becoming long time, BBM a part of the Emtek was the default Group, BBM Number of global messaging is significantly service, and expanding its market employees everyone remembers presence in Indonesia at BBM having a BlackBerry and across the Middle East email account and using and Africa. Talbot, having worked BBM. Obviously though the market within the mobile technology solution has changed, and with that, we BBM space for more than 20 years, has seen has also had to change to survive.” the transformation of the market and, This new direction has seen BBM more importantly, what customers evolve from a pure messaging are demanding right here, right now. service connecting people to a “Messaging apps are the new social ecosystem, unifying chat, ecosystems. The average consumer social, commerce, content and has over 3.4 messaging applications services such as news, games, video, on their phone, and only uses four to

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“It’s the goal of making sure that in a day in the life of a consumer, the one app that people go to is BBM, as it can connect all their daily services, social experience and content at their fingertips” MATTHEW TALBOT CEO of Creative Media Works

December 2017

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five apps every day. The application war as such is already won for time in app, and due to the significant cost involved in constantly trying to drive consumers to individual applications, as well as ongoing support costs around development had accelerated this opportunity,” says Talbot. Talbot points to Facebook’s acquisition of WhatsApp in 2014 as a pivotal moment in the changing perception of what a messaging app could and should be. “That was the year when messaging apps surpassed social media apps,” he says. “The reality is, the killer application already exists and it is messaging. The stickiness of messaging presents a real opportunity to integrate more and more content and relevant services, increasing stickiness, increasing time in app, by allowing consumers to access multiple services they do each day via the one app and socially connecting them.” CMW’s core vision is for BBM to be the top one or two messaging applications within its key markets, but as Talbot notes, it’s hard for any messaging service to go from zero to

more than 60mn users. To that end, BBM is focused on expanding and cementing its footprint in markets where it already has a significant holding, such as Indonesia, and parts of the Middle East and Africa. “Messaging is all about scale, and the network and connection effect that it creates,” Talbot says. “We’re continuing to scale from organic growth, while simultaneously becoming stickier by providing more services and more content into the daily lives of our consumers. The key success factor here is about partnering with ‘best of breed’ content and service providers that are local and relevant to our consumers.” This part is key and CMW has partnered with a number of players in Indonesia already, as well as globally. Just to name a few examples of the breadth of BBM’s portfolio, it has successfully incorporated the world’s leading hotel price comparison site HotelsCombined, online e-commerce marketplace Bukalapak, and global transportation technology company Uber to name a few. IT is also working to launch a payment wallet solution

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BBM

with the group’s joint venture with Ant Financial called ‘DANA’, which will enable end-to-end payment across the BBM ecosystem of content and services, online and offline payments, as well as person-toperson payments within Indonesia. “We’ve really tried to partner with the best of breed partners and integrate them into BBM,” Talbot says. “That comes back to the opportunity around the scale that we have, which has enabled us to work with partners that are very much aligned with our success.” Creative Media Works, operating as BBM, was established in 2016

December 2017

and the following 12 months has seen significant growth for BBM, but there has been one persistent challenge that Talbot has had to contend with, something that he calls the company’s “Achilles heel”. “I can give a speech at a conference, lay out a full presentation on what BBM is and what it stands for and our ambition, and I can guarantee that people will walk away from it and still refer to us as BlackBerry Messenger,” he says. “It’s two-fold really though, because in markets like Indonesia, BlackBerry is such a well-known brand, you have to strike a balance against what has

BBM Messenger Partners with Criteo to Augment Access to Premium Brands and Advertisers in Indonesia Welcome to the #VibrantFuture of Commerce Marketing Since establishing its publisher relationship with Criteo (NASDAQ: CRTO), the commerce marketing leader, in 2016, Creative Media Works, operating as BBM, has expanded its access to premium brands and high-value advertisers, resulting in significant increases in in-app engagement for brands through BBM Messenger. BBM is the largest messaging platform in Indonesia and has more than 60 million monthly active users. Since it was created in August 2005, BBM has evolved from a pure messaging application for text and video communications to online social ecosystem unifying chat, social, commerce and services like bill payments, top-ups, vouchers / coupons, games, comics, news, video, shopping, travel, sport, career and polls. BBM Messenger’s strength lies in its ability to convert app traffic into consumer engagement, thereby enabling eCommerce players with ads within BBM to increase online sales and engagement. BBM leveraged Criteo to accomplish the following: • Efficiently pinpoint or target specific users within BBM Messenger’s user base, by leveraging The Criteo Engine’s ability to understand each consumer’s online browsing and purchasing behaviour. • Optimise BBM Messenger’s ad inventory by allowing premium, high-value advertisers to engage more effectively with BBM Messenger users through personalised and brand-appropriate ads delivered in real-time. “Indonesians spend an average of 5.5 hours a day on apps and the mobile web, with BBM Messenger being one of the top mobile apps when it comes to usage frequency and duration. For brands looking to grow online sales in Indonesia, in-app advertising on BBM Messenger is a massive consumer engagement opportunity. Criteo’s machine learning algorithms intelligently match publishers’ ad inventories with brands’ dynamic ads to achieve the best consumer engagement results. We look forward to continuing to help platforms like BBM Messenger maximise revenue, while helping brands maximise digital ad spending,”

said Dushyant Sapre, Regional Director, Global Supply and Business Development, Asia-Pacific, Criteo. Results from Criteo’s Collaboration with BBM Since becoming a Criteo publisher, BBM has achieved the following results: • 50 percent increase in overall click-through rates on the BBM platform • 50 percent increase in click-through rates for retailrelated ads on the BBM platform • 50 percent increase in BBM’s daily ad revenue “BBM Messenger works with the best-in-breed partners globally, as part of a continuous effort to provide an enriched user experience, while delivering optimal results to brands and advertisers. The partnership with Criteo gives us access to a robust network of premium and high-value advertisers, while increasing our user engagement and click-through rates. In addition, this collaboration allows both teams to collectively explore various ad formats and methods that work best for brands looking to engage mobile consumers in Indonesia,” said Matthew Talbot, CEO of Creative Media Works, the company that operates and runs BBM globally.

Click here to watch how BBM worked with Criteo Creative Media Works now operates under the BBM banner as a stand-alone consumer focused business with teams operating from Waterloo, Mississauga, Ottawa, Singapore, Jakarta, UAE and South Africa. For more information, visit www.bbm.com.

Introducing the Criteo Commerce Marketing Ecosystem: Criteo, the leader in commerce marketing, is building the highest performing and open commerce marketing ecosystem to drive profits and sales for retailers and brands. 2,700 Criteo team members partner with 16,000 customers and thousands of publishers across the globe to deliver performance at scale by connecting shoppers to the things they need and love. Designed for commerce, Criteo Commerce Marketing Ecosystem sees over $550 billion in annual commerce sales data. For more information, please visit www.criteo.com or email APACMarketing@criteo.com.

BBM

come before and what messages move to the cloud promises significant and brand image we want to build improvements in performance as well around the new BBM in the future.” as the ability to launch and scale more In light of branching off into its and more services and content. own venture and company culture, As part of the migration, Emtek CMW is working very closely with will be rationalising BBM’s existing BlackBerry as the company is infrastructure by leveraging on GCP still completing the migration of custom Virtual Machine (VM) types infrastructure and processes from across all of BBM’s components. operating under BlackBerry umbrella. Google Cloud’s presence over the This migration brings map and ability for software about its own unique load balancers to be challenges for Talbot, globally reachable The year as it doesn’t synergise allows BBM to that BBM was with the agile centralise its established environment that infrastructure in BBM is now trying select regions, but still to operate within. provide a low latency, “We are still hosting user experience for its our infrastructure within global subscriber base, as the BlackBerry data centres network traffic will be ingested in Canada, and we’re only halfway in the geographically closest Google through the transitioning process,” Point-of-Presence and traverse he says. “Without control of our their backbone to BBM servers. infrastructure end-to-end, it’s like trying “Google Cloud Connect is a service to steer a boat without a rudder.” offering, which will allow us to connect Part of the transition to a new our Google Cloud infrastructure infrastructure has been its deal with in Singapore and Taiwan to the Google to run on the Google Cloud BlackBerry data centres that are Platform (GCP) in Southeast Asia. This located in North America,” says Talbot.

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BBM migration stats As part of the migration, Emtek will be rationalizing the infrastructure by leveraging on GCP custom VM types across all the BBM components:

CORE MESSAGING

BBM ON BLACKBERRY INFRASTRUCTURE

BBM ON GOOGLE CLOUD PLATFORM

~5,000 instances

~3,500 instances (with autoscaling)

~500 instances MEDIA STORAGE

NetApp Filers

Migrate to pay per use on GCS

Solid State Disk over FusionIO LOGGING AND MONITORING

~5,000 instances

Migrate PubSub and Dataflow

BIG DATA AND ANALYTICS

~1,000 instances

Migrate to Dataproc and BigQuery

DATABASES

~500 instances

Leverage Cloud SQL

The hardware footprint in the Google Cloud, which spans multiple permutations allows BBM to spin up beefy virtual machines, previously only achievable on bare metal nodes; for example, a 64 vCPU node with 240GB of RAM. This allows for vertical scaling, reducing BBMâ&#x20AC;&#x2122;s node count footprint and operational overhead.

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BBM

“This network circuit will ride on top of Google’s Wide Area Network and subsequently interconnect with BlackBerry infrastructure over dedicated fibre optics - this allows us to be in control of our own destiny and limit any impact from other ‘network hungry’ Google customers.” GCP became available in Singapore just this year, which has allowed CMW to host its BBM platform in “our own backyard”, making it easy to deliver services to the company’s largest user base in Indonesia.

“We are excited to be able to deploy into the GCP Singapore region, as it will allow us to offer our services closer to our largest customer base,” says Talbot. “Coupled with Google’s global load balancers and extensive global network, we expect to be able to provide a low latency, high-speed experience for our users globally.” Such a significant project, one that will see enormous quantities of data and data storage be migrated to a new platform, is not without its risks and Talbot is targeting a Q1 2018

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launch date, which will provide enough time for the company to complete its full migration of infrastructure, processes, data and systems. Operating in the mobile consumer business, one that continuously transforms and evolves at an increasing rate, Talbot is all too aware of the importance for BBM to remain at the forefront of this change in order to survive. For BBM, the company today handles between 15,000- 20,000 customer service requests on a

weekly basis, with 6,000 app reviews and approximately 2,000 comments and social engagements. This allows CMW to gain a true picture of understanding what the customers are looking for as a service solution. “We have such a huge number of touchpoints with the customer on a daily basis where they tell us exactly what it is they don’t like and don’t think works, but more importantly what they do like and what does work,” says Talbot. “The moment you start thinking

BBM

“There’s a tremendous opportunity for CMW to expand the BBM application into something that adds value to people’s daily lives, but we have to execute on that vision, and make sure that we take this opportunity and build something special” MATTHEW TALBOT

CEO of Creative Media Works

December 2017

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you’re doing something right, that’s when you stop pushing yourself. It’s important to hear what’s going wrong and not tell people what you think is going right.” As CMW continues this migration, partnering with more and more key providers in the market, the company’s immediate goal is to completely free itself of its BlackBerry heritage and truly establish itself as a new entity, and become one of the leading digital ecosystems in Indonesia. For Talbot, he sees BBM becoming more than a simple ecosystem but a

part of consumers’ everyday lives. “We have between 50 and 55mn monthly active users at any given month in Indonesia, so we can have a huge impact on the day-to-day activities via BBM,” he says. “There’s a tremendous opportunity for CMW to expand the BBM application into something that adds value to people’s daily lives, but we have to execute on that vision, and make sure that we take this opportunity and build something special.”

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A STORY OF SUPPLY CHAIN TRANSFORMATION Written by Catherine Sturman Produced by Charlotte Clarke 55

VICE PRESIDENT OF SUPPLY CHAIN LISANNE BOGLE DISCUSSES HOW THE TEAM THINKS ‘OUTSIDE THE BOX’ IN THE DELIVERY OF OKADA MANILA’S PROCUREMENT SOLUTIONS IN THE PHILIPPINES

kada Manila is a US$2.4bn development that is the largest and most expensive property in Entertainment City, in Manila, Philippines. Set in 44 hectares of prime land, it is positioned as an integrated resort with features that cater to different kinds of people, yet it mainly stands for one thing: entertainment. While it has a casino and gaming area— the largest in the country in terms of size and gaming options—it has a rich array of unique and world-class amenities that truly spoil its guests with choices on how they would like to spend their time, from relaxation to shopping to dining and other kinds of entertainment. Its most iconic feature is the US$30mn The Fountain, which brings select music to life through a fantastic choreography of light and water. Aimed to become Manila’s main tourism icon, this fountain is designed and developed by WET, the same team

December 2017

Lisanne Bogle, VP of Supply Chain.

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sourcing, procurement, and cost control means specific to

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• POS Management Portal

variety of options for large or small enterprises, including cloud

• Mobile Approval Workflow

based hosting. The system is designed to be the supply chain component of any ERP system and provides a modern POS Management Portal to manage and integrate with any point-of-sale system.

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OKADA MANILA

behind the world’s most popular water features in Las Vegas and Dubai. Okada Manila is also home to the country’s first-ever indoor beach club and nightclub, Cove Manila. Enclosed in a glass dome, 100m in diameter and 30m in height, Cove Manila features artificial white sand and can host up to 3,000 guests. Okada Manila is being built against a backdrop of how the Philippines has become a hotbed for investment and one of the fastest growing economies in the world. The government’s sixyear “Build Build Build” construction and infrastructure initiative is set to further attract new and upcoming services here, such as the launch of integrated resorts that contain hotels, retail outlets, spa and leisure facilities, traditional gaming services and much more. Moreover, developers are now catering to an increased

consumer desire to seek a complete experience, rather than spend money on one area of entertainment. “The different kinds of tourists, such as families, are not going to be encouraged to come here if there is no variety of exciting and worthwhile things for them to do,” explains Lisanne Bogle, Vice President of Supply Chain for Okada Manila. “That’s why integrated resorts give an all-encompassing answer: they provide something for everyone. “There are four integrated resorts in Manila: Resorts World, City of Dreams, Solaire and Okada. Traditionally, gaming has been popular with tourists from various Asian countries and Las Vegas used to be the draw. With the advent of gaming in Macau and southeast Asia, the number of tourists to these destinations has increased, especially VIP guests who provide

“Integrated resorts give an all-encompassing answer: they provide something for everyone” LISANNE BOGLE VP of Supply Chain for Okada Manila

December 2017

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a strong backbone to the entire industry of entertainment and travel. “The region’s economy has grown and expanded in the last several years, which also means an increase in disposable income. Citizens from many countries are able to travel more and explore many sought-after destinations.” Changing attitudes Operated by Universal Entertainment Corporation subsidiary Tiger Resort,

The Deluxe Twin suite at the Okada Manila Resort

Leisure and Entertainment Inc., Okada Manila houses a number of diverse food and beverage outlets, retail, leisure, sports and spa facilities and, of course, traditional gaming services which are open 24-7. Although it is mostly complete, there is still some ongoing construction, and Okada Manila’s procurement team faces a number of challenges in its daily operations. Its vast team is split into three areas to cater for these demands:

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OKADA MANILA

business processes, procurement Thinking outside the box and strategic sourcing, and “We’ve been gradually adding more warehouse, receiving and logistics. real estate to our operations, so In order to ensure competency in we’re in a very hybrid situation,” all areas of the business, there is an Bogle continues. “Not only are we increased need for versatility in both processing the fit out requirements thought and action, as Bogle explains: for the hotel and restaurants, “All members of the procurement team but we are managing the daily need to understand each step in the operational requirements for the procure to pay process and the existing operations.” impact of logistics; whether With such complexity, it is the customs clearance ‘thinking outside of process, the specific the box’ has become items that require the norm for Okada The number paperwork for Philippine Manila. When of integrated Amusement and Gaming ordinary software resorts situated Corporation (PAGCOR) lacked the adaptability in Manila approval and also those required to satisfy its items that have been approved everyday needs, the team by the Philippine Economic Zone looked at alternative solutions. Authority (PEZA) and what additional The implementation of hospitality documentation may be needed once software RedRock has become the order has been placed. There is a essential within its procure-to-pay need for speed, urgency and a lot of solution, which also manages communication to ensure shipments Okada Manila’s growing inventory are not delayed. A small misstep could and is supported by Microsoft result in a delay in handover of an area Dynamics AX for the financials. or a direct offer program not meeting With a campus of this size, the expectations of the guests.” efficiency is important and Okada

December 2017

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S U P P LY C H A I N

Manila maintains onsite warehousing for over five hundred items, including operating supplies and also food and beverage items. The warehouse team manages over 500 SKUs, many of which have different weights and expiration dates. “We’re dealing with many products that do not have a fixed case weight,” Bogle says. “As these cases go into inventory, we need to be able to record the actual incoming weights, the costs and subsequently the average inventory cost to

The Retail Area at the Okada Manila Resort

correctly and accurately calculate the food costs and the recipes. “When we order beef, it doesn’t necessarily come in a fixed case weight, but in an average case weight. However, we get charged by the kilogram, not by the case. You may say that a case is an average of 25kg, but there are times we receive 24.7kg, then the next time we receive 25.3 kg. We have to have a system that manages the ability to calculate the true cost, and also to manage

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WE HELP PEOPLE BE THEIR BEST IN THE MOMENTS THAT MATTER Motorola Solutions is a global leader in businessto-business communications and technology solutions for emergency services and commercial organizations, encompassing both hardware equipment and software applications. As a high-tech company with a global history of 89 years, Motorola Solutions has 14,000 employees in over 60 countries, including the Asia Pacific region where we have been present over the past 40 years with 31 offices in the region including Philippines. Today, our solutions are being deployed throughout the Philippines in sectors including public safety, transportation, oil and gas and hospitality. With innovation ingrained in our DNA, our advanced technology can help organizations to service clients with reliability and security, keep industry workers safe as well as enable hotels and retailers to provide guests with memorable experiences. “Although you won’t always see our technology in the foreground, it’s always in use, helping

emergency services and commercial organizations to work more safely, as well as increase productivity and efficiency,” says Jane Coo, Country Manager, Motorola Solutions Philippines. Okada Manila, an integrated resort covering over 44 hectares of prime land has recently implemented Motorola Solutions TETRA digital two-way radios and WAVE work group communications to connect employees working across diverse operations, such as security, food and beverage outlets, retail, leisure, sports and spa facilities, and 24/7 traditional gaming services. “Digital radios help our staff to enjoy clear, crisp and uninterrupted communication over our vast premises. With such extensive operations, connectivity is crucial to ensure that we provide quality service to our customers. In addition, WAVE helps to link up employees using two-way radios with colleagues at desktop machines, mobile phones, tablets or any other communication device to enable wider coverage”, says Lisanne Bogle, Vice President of Supply Chain, Okada Manila.

www.motorolasolutions.com

S U P P LY C H A I N

our inventory based on what we call catch weight variances,” she adds. “Most large ERP solutions have not been successful in providing a solution for this specific requirement. Additionally, we now utilise a new bolt-on solution to RedRock that has allowed us to increase the efficiency of our supplier registration and accreditation via an electronic supplier portal. Initially, the use of that portal is for our vendors to undergo vendor registration and accreditation. Vendors are provided with a username and password and a link to access the portal. They complete an online application providing us with required information on their company, and

they upload pertinent licenses, permits, insurance documents and financials. The business process team will then verify for authenticity, work with risk management on the financial assessments and conduct background investigations. This online portal has saved us a significant amount of time reducing the process from nearly three weeks to a matter of days. Then, the second part of this solution will allow us to do electronic RFIs, RFQs and RFPs, as it actually ties in with RedRock. All processes within one framework reducing the volume of excel spreadsheets and tender documents and paper files.” “Identifying the right software

“Identifying the right software solution is never an easy task; ensuring it meets the operations’ requirements is key. Technology should work for us, and not the other way around” LISANNE BOGLE VP of Supply Chain

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OKADA MANILA

solution is never an easy task; ensuring it meets the operations’ requirements is key. Technology should work for us, and not the other way around.”

across multiple outlets where possible. This has consequently become vital to restaurant operations to ensure food costs are controlled without endangering the quality and uniqueness of each menu. “We may Reducing product costs use pork belly in multiple restaurants, As more restaurants open, food and and each chef is likely to ask for a beverage requirements increase different specification – bone-in, dramatically. In addition to skin-on, skin-off or boneless preparing meals for more or a combination,” Bogle than six thousand says. “By standardising team members on the specification, we are a daily basis, each able to ensure that we The year that kitchen under Okada have the right volume to Okada Manila Manila prepares its leverage negotiations was founded own menus for its with suppliers. restaurants. The number “Cost reductions come of ingredients slowly grows in many forms, however, we and the specifications become can only take so much cost out of varied. Okada Manila’s Supply Chain the product, so we get creative in is now tasked with not only sourcing looking at different ways of procuring all of these different products but products. Maybe we reduce the also managing costs. Optimisation number of deliveries; the vendor of product specification is an saves on freight and logistics approach that has led the company cost and we can then share those to dive deep into all specifications savings. It’s really thinking outside and work with the F&B department the box and collaborating with in discovering synergy of product vendors; understanding how they

2016

December 2017

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The Executive Suite at the Okada Manila Resort

S U P P LY C H A I N

do business, how we do business, and how we can work to eliminate some of that excess cost that is added into the cost of goods.” Systematic processes The integrated resort sector in the Philippines is still in its infancy and that means that experienced resources are sometimes limited. Training is key, and finding the right individuals with the right attitude and potential is the starting point at

Okada Manila. As a result, it continues to be committed to undertaking an ongoing talent development drive and deliver extensive training across its operations. “We spend a lot of time working with our teams, whether it be on an individual basis or whether it be in a group setting, to really get them up to speed,” Bogle explains. “If you clarify why things are done, you then get the support which in turn brings a better result.”

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OKADA MANILA

“It’s really thinking outside the box and collaborating with vendors; understanding how they do business, how we do business, and how we can work to eliminate some of that excess cost that is added into the cost of goods” LISANNE BOGLE VP of Supply Chain

December 2017

S U P P LY C H A I N

In addition to training, ensuring transparency is something that Bogle stresses is of utmost importance within Okada Manila’s procurement functions. Transparency of vendor selection, the tender process, the award are all non-negotiable. Processes and controls are also vitally important to the success of Supply Chain within the organisation. “We educate our BUs on our SOPs, we are constantly evaluating our SOPs as the business changes to ensure that we are covering all angles,” Bogle notes. “We do not want to strangle the operation, but we need to ensure that all processes are adhered to. Accountability, visibility and responsibility are buzzwords for the supply chain team. Strict regulations have also ensured that compliancy continues to be an essential area of focus within Okada Manila’s procurement team.”

Red Spice at the Okada Manila Resort

Long-term growth There are more exciting times ahead for Okada Manila and the Supply Chain team. Nonetheless, despite the challenges, Bogle is enthusiastic about the growth of integrated resorts and Okada Manila’s long-term potential. “Our guests are not looking to sit at a table for 24 hours nonstop. They’re looking for entertainment,” she concludes. “They’re looking for that experience, and that is something that we will give them.”

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BNP Paribas Cardif in Japan: Leading the industry with customer care Written by Nell Walker Produced by James Pepper

Joel Edgerton and Colm Kennelly explain how BNP Paribas Cardif has struck the balance between technology and customer experience to dominate the insurance market in Japan

hile the world of insurance is ostensibly centred around human experience, itâ&#x20AC;&#x2122;s amazing how often that focus falls by the wayside, particularly as technology becomes ever more of a priority. BNP Paribas Cardif, the insurance arm of BNP Paribas, is working tirelessly to buck this trend.

December 2017

Joel Edgerton, COO, and Colm Kennelly, CIO, have been fronting a technological transformation of the Japanese arm of the business. With backgrounds in business, finance, and engineering between them, the pair boast a powerful grasp of both technology and economics in order to lead this transformation.

TECHNOLOGY

BNP Paribas Cardif head office

“We are very committed to the Japanese market. We have been growing faster than the market for about 14 years,” says Edgerton. “We’re not a normal insurance business – we work with partners on bank insurance which distribute our products. Facing strong competition, we realised that the best way we could compete

was with customer experience. That started our transformation.” As a result, BNP Paribas Cardif in Japan has stormed ahead of other businesses and shed competition, upgrading along the way without negatively impacting customers. According to Kennelly, the technology transformation

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B N P PA R I B A S C A R D I F

Inside a Cardif office

December 2017

in Japan was a mountain to climb as opposed to a hill, but the payoff has been huge. “The real battle in Japan is generating buy-in and building momentum and trust in terms of the vision, the mission, and the direction, which involves a healthy degree of change and disruption,” he explains. “Once you get to that point, you mold it all to Japanese values and culture which results in a team player mindset. It’s a very steep mountain initially, but the wonderful benefit is that when you do, you get a conveyor belt-type delivery mechanism where you can churn out quality delivery whilst building on trust and delegation that I don’t think you get in many other countries.” Edgerton and Kennelly worked on creating the most amount of flexibility in the business transformation whilst catering to the requirements and culture of the nation they serve. BNP Paribas Cardif wanted to introduce more products and distribution channels, leading it to deconstruct core systems and rebuild them in a more modular way, ensuring a data-driven process and infrastructure. “We can reuse our business logic and reuse data while moving in a way that’s flexible and agile,” says Edgerton. “We’ve got the architecture mapped out for the next five years to develop, in close coordination with our head office. We’ve already started building out pieces of it that are in place, and as we add new business functionalities

B N P PA R I B A S C A R D I F

they’re built into the new architecture. Data is core to that, but the real impact is not so much on the technology as much as how we implement change. In particular, what is the customer experience impact of any given change?” “We’re not a technology company, we’re an insurance company,” adds Kennelly. “We’ve got a laser focus on the fact that our mission is to deliver tailored, best-in-class and

fit-for-purpose insurance solutions to improve the risk management and quality of life for our customers. Technology isn’t the be all and end all, because there will be cases where we have customers who are very receptive to and demanding of high technology, and customers who are the exact opposite. It’s very important that we have a real and accurate sense of what our customers are looking for.” BNP Paribas Cardif utilises data to

The BNP Paribas 360° 2017 Corporate Film: Discover the other VR-based solutions available to BNP Paribas customers 82

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Cardif is part of the BNP Paribas Group better understand customers, first and foremost. This extends from the most basic point of contact at the call centre, where BNP Paribas Cardif puts no limit to how long an operator stays on the line, to the most complex elements of any relationship between a customer and an insurer. “We see a lot of possibilities about how we can create new and better interactions with customers,” says Edgerton. Kennelly adds: “What’s very important in Japan is trust, respect, sincerity, and commitment. Delivery of superior product is the result, but it’s about the journey for us.” “You hear customer experience buzz words all over the place,” Edgerton continues, “but we don’t want to do the same as everyone else.” As such, the business organises its own

“Our mission is to deliver tailored, bestin-class and fit-for-purpose insurance solutions to improve the risk management and quality of life for our customers” Colm Kennelly, CIO

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B N P PA R I B A S C A R D I F

Neusoft Corporation, being a leading IT solution and service provider named to PwC's Global 100 Software Leaders.

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December 2017

TECHNOLOGY

version of customer experience around a Japanese concept called ‘omotenashi’, which translates directly into English as ‘hospitality’. “In Japan, the word for ‘customer’ and ‘guest’ are the same,” says Edgerton. “The assumption with omotenashi is that you know your customer so well that you’re able to fulfil their needs without them asking. There is no difference between you and your customer.” No longer needing to compete on price or product specifications, BNP Paribas Cardif concentrates on competing with this omotenashi concept, which is long-running and ever-evolving. Taking the time and effort to create strong relationships ensures a unique level of loyalty. Kennelly is keen to point out that the audience any business needs to get on board first is its employees, long before customer partnerships can be forged, and that the unique way in which Japanese people work as a team is invaluable. “The expectation is that the senior individual at the top of the

organisation provides a safety net if things go south, but there’s also an understanding of a level of support from the collective,” he states. “That’s what generates the belief, the trust, and the commitment. If anything goes wrong, the team will try to solve it with transparent communication and try to make decisions based on data.” “The characteristic I’m looking for in new employees the most nowadays is curiosity,” Edgerton adds. “Employees that are willing to ask questions: ‘why is the customer happy or unhappy? Why are we doing it this way? Why are we not doing it another way?’ In the same way, we do not want suppliers but partners that are willing to learn and grow together with us. It’s that curiosity combined with technology that’s really going to take us forward. “For the companies adapting to technology change, the ones that will be successful are the ones keeping their core beliefs and focus on the customer, and use technology to benefit them. Otherwise you either rush to get the technology in place to survive, or get wiped out.

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“In Japan, the word for ‘customer’ and ‘guest’ are the same. There is no difference between you and your customer” Joel Edgerton, COO

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“We want to be in the first group. We want to be an innovator, a pioneer, and not be scrambling for survival. We want to add value to the customer.” For Kennelly, the customers must have a “meaningful and aligned experience with BNP Paribas Cardif” in order for the business to thrive. Currently, it appears that this mindset has been wildly successful for BNP Paribas Cardif, and allows the business to bask in confidence for the future while it moves ahead with advanced technology. “We’re looking at what we do in terms of AI, in terms of business automation, IoT, mobile, cloud, social, and how that’s all underpinned by being a truly digital processdriven company,” Kennelly concludes. “We also need to challenge ourselves naturally in terms of whether what we’re doing is adding real value from the customer’s perspective. If not, apart from the mandatory topics which we have to do regardless of whether the customer sees the value or not, we shouldn’t be doing them.”

Transparent communication is an important feature of Cardif’s company culture

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BOLLORÃ&#x2030; LOGISTICS putting Vietnam on the logistics map Written by Nell Walker Produced by Charlotte Clarke

Marc Moeschlin, Managing Director of Bolloré Logistics Vietnam, describes the ways in which the business is taking advantage of market growth in Vietnam by expanding the business footprint and investing in the country

olloré Logistics, with its headquarters in Puteaux, France, has been active in Vietnam since 1989. It has since firmly made its mark in the country, serving some of the most high-profile brands in the world and providing the keys to managing the supply chains of its customers in this dynamic high growth market. With over 30 years of experience up his sleeve, gained mostly in Asia, Managing Director Marc Moeschlin has sat at the helm of Bolloré Logistics Vietnam for the last two years with a desire to take advantage of a thriving industry. Marc Moeschlin started working in logistics in Switzerland in 1986 for a medium-sized international German Logistics company, immediately after completing his degree at EPCI/ESSEC

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Business School in France. Overcome with a desire to travel and discover Asia, he took a year off to fly to Hong Kong and travel throughout China and across the world before returning to the same company he first worked at – this time based in Singapore – in 1990. Thus began a career of management-level freight forwarding and supply chain roles in various Southeast Asian countries, building up a wealth of experience before joining Bolloré Logistics two years ago. As Managing Director, Moeschlin oversees all activities in Vietnam, freight, warehouse and logistics, projects, supply chain management, covering the full pallet of services provided by the company. “It’s an interesting role in an exciting country,” says Moeschlin, and what

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Marc Moeschlin Managing Director

Marc Moeschlin started working in logistics in Switzerland in 1986 for a medium-sized international German Logistics company, immediately after completing his degree at EPCI/ESSEC Business School in France. Overcome with a desire to travel and discover Asia, he took a year off to fly to Hong Kong and travel throughout China and across the world before returning to the same company he first worked at â&#x20AC;&#x201C; this time based in Singapore, in 1990. Thus began a career of management-level freight forwarding and supply chain roles in various Southeast Asian countries, building up a wealth of experience before joining BollorĂŠ Logistics as Managing Director two years ago.

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makes Vietnam so thrilling for Bolloré Logistics is its fastgrowing market on both the export and import side. “We are present in Hanoi, Danang and Ho Chi Minh City; but the latter - formerly named Saigon - is the biggest city and also where our head office is located,” Moeschlin explains. “The challenge in this country is to take full advantage of the growth happening. Vietnam is experiencing over 6.5% GDP growth right now, and looking at the still growing foreign investment, these growth levels are here to stay for several years to come. We’re benefitting from an increased demand in the footwear and clothing sector, which has been transferring a lot of orders from China, and the high tech and telecom sectors have seen major manufacturing investments, especially in the north of Vietnam where one of the biggest mobile phone factories in the world is located.

“Also, we have a growing middle class here in Vietnam, increasingly wanting to source and buy international brands,” he adds. “Earlier entries like Zara and more recent entries like H&M are getting a lot of attraction here, due to Vietnamese women having an increasingly high rate of employment and therefore their own buying power. Luxury is also a great sector for us to develop as the market in Vietnam grows. “A challenge here is the development of new airport infrastructure,” Moeschlin continues.

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“Ho Chi Minh City is actually building a new airport for 2025, but the question remains on how we will manage the cargo volume growth at the existing airport until then.” How, indeed, when the local market is thriving to such an extent? Online shopping is a constantly-flourishing industry in Vietnam. More and more, consumers are opting to buy via their personal devices, meaning a huge surge in e-commerce; which

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generates increased domestic and international cross-border flows. “We are seeing the business model changing rapidly because of this, and we’re tailoring our offer to support this industry as much as we can,” says Moeschlin. “Thanks to our logistics hub in Singapore, we can serve the region, including Vietnam. Alongside this, we work with strategic partners who can provide the last-mile delivery service so that we can offer

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a country wide end-to-end service.” Besides e-commerce, Vietnam offers a wide range of opportunities. On the manufacturing side, Vietnam has become a good addition to China, and businesses have begun to realise that the balance is shifting, creating opportunities for Vietnam. This is further enhanced by various Free Trade Agreements (FTAs) that Vietnam has signed or is on the verge to implement. Being a leader on the FranceVietnam trade lane and ranking in the top 5 logistics companies in Europe – one key trade where Bolloré Logistics has some major advantages is between Vietnam and Africa. Vietnamese telecom companies have successfully sold their network equipment and technology to some countries on the continent, and there has been a great deal of soft commodity business between Africa and Vietnam; in which Bolloré Logistics already plays a major role in Africa, thanks to its leading market position there. “We see Africa becoming more of

“The challenge in this country is to take full advantage of the growth happening” MARC MOESCHLIN Managing Director a consumer nation in the future,” says Moeschlin. “Mobile phones, footwear and garments especially are growing markets there and commodities like cashew nuts and cotton are moving in increasing volumes.” With an unmatched network in Africa, Bolloré Logistics is in a good position to let its customers in Vietnam leverage and develop trade sustainably, with full visibility and control from end-to-end – even to landlocked countries. However, as Moeschlin explains, partnerships begin within the business. “In order to satisfy our customers, our key partners are actually our staff,” he says. “It’s essential for us to have a

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“Bolloré Logistics is a family-owned business, and we are bringing that family spirit down through every level of the business” MARC MOESCHLIN Managing Director

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stable and well-educated work force in a high growth market such as Vietnam. Bolloré Logistics is a family-owned business, and we are bringing that family spirit down through every level of the business. This unique DNA and the efforts put into staff development ensure that we have quite a low staff turnover compared to the rest of the market, allowing a consistently good quality of service, which is a strong point in satisfying our customers.” Bolloré Logistics Vietnam offers extensive training and development possibilities to its staff - the company holds an edge in the sense that it is a pioneer. It was the first international logistics organisation to receive the license to operate in Vietnam, and the ongoing success story of Bolloré Logistics is something which attracts the needed talents in this competitive market. The business is also doing its part to fill the skills gap by partnering with education services and developing a work-study programme in which students can work towards their degree by also spending time in the workplace. The company does, of course,

keep local partners close as well, and due to its status, Bolloré Logistics is able to pick and choose precisely which companies have the quality processes and standards it demands. “We have to actively coach them and bring them up to standard, which we are doing with a very active vendor management program. That enables us to provide the kinds of service our international customers are expecting,” says Moeschlin. To support its strong partner relationships, technology is also a key enabler. For one particular aerospace customer, the company applied a solution called Link Mobile for item tracking whereby the recipient of the cargo signs on the trucking partner’s mobile device. This proof of delivery (POD) is instantly uploaded and visible in the corresponding tracking and tracing application. Similarly, other customers are making use of Bolloré Logistics’ e-booking tool, reducing data input. While these may be small steps, they make a big difference in terms of business efficiency. Moeschlin and his team are working towards a

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more integrated way of working, with algorithm-based decision-making becoming the norm for the Bolloré Logistics Vietnam operators to make the best choices for the customers, optimising their experience. “The intention is to make this data much more useable and better in predicting where the capacity will have to be and where prices will go in the future,” he explains. “We very often take a bet on the future,

December 2017

and we need to be able to read the market better than the competitor.” Bolloré Logistics also works hard on innovation with the B. Lab – an innovation community within Bolloré Logistics that aims to create new products, services and processes that tie into the digital revolution. Its responsibility as a company also encompasses social and societal aspects by integrating the expectations of stakeholders and

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playing its part in developing the local economy. In terms of sustainability, for example, Bolloré Logistics is able to provide details of a customer’s CO2 emissions based on shipment data, enabling them to see their impact on the environment and adjust accordingly. Bolloré Logistics Vietnam has several corporate social responsibility (CSR) programs in place locally, and recently supported local communities by donating

its old IT equipment to a nongovernmental organisation training underprivileged students in Danang. Bolloré Logistics Vietnam’s consideration for CSR is part of what makes the business unique, and the future looks brighter than ever for Moeschlin and his team.

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Written by Fran Roberts Produced by Charlotte Clarke

The journey to a superfast supply chain 101

Founded in 2006, Urban Revivo is a fastfashion brand specialising in contemporary clothing and accessories for men, women, and children, selling accessibly priced fashion targeting 15 to 40-year-olds. Ethan Zhong, Vice President of Supply Chain, explains more about the company’s superfast supply chain

“

Urban Revivo is a fast fashion company and it was built 11 years ago. The founder of Urban Revivo visited Zara in Japan and then he came up with this idea in China – we didn’t have a fast fashion company,” reveals Ethan Zhong, Vice President of Supply Chain. “Urban Revivo is a successful company; it’s grown very fast. It has grown by 50% every year, and now it has around 200 stores in China, and our sales revenue is close to RMB3bn [US$452mn].” Brands such as H&M and Zara were said to be among the very first fast fashion retailers. When the latter opened its first US store in 1990 – having first launched in Spain in the 1970s – it announced

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that it would only take 15 days for a garment to go from concept to completion. As Urban Revivo expands internationally – first to Singapore, with the UK in the pipeline for 2018 – there is increased pressure on the company’s supply chain to achieve such short turnaround times. “Actually, it’s a super big challenge for the whole supply chain because we launch more than 20,000 kinds of new products every year. We have a huge timetable and a superfast supply chain. To compare with a traditional fashion company, we launch new products every week. So, our suppliers, we require them to supply those products to us, within around 15 days to 30 days,”

URBAN REVIVO

â&#x20AC;&#x153;I got my Master Degree in computer science at Vaxjo University in Sweden. I served Nokia, Lenovo and Mars Confectionary and now I am the Supply Chain VP at Urban Revivo. I am familiar with sales and operation planning, procurement, production, quality, industrial engineering, logistics and so on. I enjoy transferring the supply chain management skills from one industry to another and have rich experience of improving the whole supply chain including cost saving, shortening the lead time, upgrading the quality KPI and so on.â&#x20AC;? ETHAN ZHONG VP of Supply Chain

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“As part of the supply chain transformation, my key focus is to develop our suppliers” Ethan Zhong VP of Supply Chain The Supply Chain and Product team

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Zhong reveals. “We need to prepare some raw materials in advance. We have around 100 small suppliers that have high self-authority and they can support our short lead time. We also use a huge timetable to manage the cross functions and to launch new products every week on time.” SUPPORTING SUPPLIERS The company announced it would be expanding worldwide when it celebrated its 10th anniversary last year, adding that it had ambitious plans to open around 400 stores globally by 2020, with stores set to follow in Europe as well as more across

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Urban Revivo supplier conference Asia outside China. As Urban Revivo develops, so must its suppliers. “Most of our suppliers are really small suppliers, because Urban Revivo was growing quite fast in the past. So now, in the future, as part of the supply chain transformation, my key focus is to develop our suppliers,” Zhong observes. “We do our best to support them. We consider them as our key business partners.” It is not just suppliers that Urban Revivo views as key partners. “For the logistic part we also work with Jingdong,” Zhong notes. “Jingdong, also known as JD.com, is one of the two largest B2C online retailers in China by transaction volume and revenue and a member of the Fortune Global 500. Such a strategic partnership is certainly indicative of Urban Revivo’s growing clout. “Jingdong is a very big e-commerce company and from this year it wanted to launch its new

FACTS • Founded in 2006 • It has grown by 50% every year, and now it has around 200 stores in China, and our sales revenue is close to RMB3bn [US$452mn]. • More than 20,000 kinds of new products every year • We have around 100 small suppliers • Ambitious plans to open around 400 stores globally by 2020

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“Because we have a lot of small suppliers, the IT system is very important for us to speed up our supply chain and also cut down the labour cost” Ethan Zhong VP of Supply Chain

2017 winter campaign for men’s clothing

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business of logistics services. Jingdong has very strong capability in its logistics – it’s famous for its speed, for its e-commerce platform. In the past, Jingdong Logistics only served its own website, and now they are open to other customers. We have strategic operations with Jingdong this year, and next year they will support all of our logistics service, including the transferring and warehousing,” Zhong advises. “This is the first year Jingdong opened up its logistics, so they also want to have a strategic partner to have a test case to show to other customers in the future. They give a lot of support to us. We support each other. We grow together.”

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2017 winter campaign for women’s clothing INVESTING IN AUTOMATION According to the Ministry of Human Resources and Social Security of the PRC, the urban unemployment rate in China was 3.95% in Q2 2017. With the employment rates so high, recruiting enough top talent has been a challenge for Urban Revivo as it has expanded. “This year we faced one big challenge. In the peak season, it’s quite difficult for our recruitment. We upsized our salary for the casual workers by around 20%, but still we have a labour shortage problem. So now, to be more efficient, we’ve needed to invest in some robots for our warehouse that can help to save the cost,” Zhong notes. “That’s the biggest invaestment

$452

million The annual revenue for URBAN REVIVO (US dollars)

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URBAN REVIVO

Above: A management team building activity Right: Urban Revivoâ&#x20AC;&#x2122;s top management team

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information and communicate this to our suppliers daily, by phone or online support,” Zhong observes. “But now we are working with the IT suppliers to see if we can build an IT platform system to help to monitor the order information and transfer the order information automatically.”

for our supply chain in 2017.” Naturally, Urban Revivo is looking to make further technological investments. “Now we plan to upgrade our supply chain IT system. Because we have a lot of small suppliers, the IT system is very important for us to speed up our supply chain and also cut down the labour cost. We have a lot of associates to collect the order

GLOBAL GROWTH Whilst Urban Revivo has achieved much in a short space of time, the company certainly shows no signs of slowing down. “For the next five years we want to grow to more than RMB10bn [US$1.5bn] sales revenue every year. That’s our mission,” Zhong states. “And we hope we can break even in the global market two or three years later because this is our first year entering the global market. We’re at the beginning; we still need to learn about the global market – what’s their fashion taste? What’s their weather like? We’re learning about their behaviours all the time.”

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The connected data hubs for Asia Pacific Written by Niki Waldegrave Produced by Glen White

Peter Adcock, Digital Realty’s APAC vicepresident, design and construction, talks about the company’s growth plans, and why he won’t be totally relying on driverless cars anytime soon

D I G I TA L R E A LT Y

igital Realty is the world’s largest full-scale data centre provider offering colocation, interconnection and cloud services. It has more than 150 data centres in 11 countries, servicing more than 2,300 companies of all sizes in 33 global markets across its secure, network-rich portfolio of buildings located throughout Asia Pacific, North America and Europe. Equating to more than 26mn sq ft of Data centre space across the world. For more than nine years, the business has delivered a portfolio of data centre solutions – including Digital Realty has announced a joint venture with Mitsubishi

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colocation, Cloud services, business ecosystems, Turn-Key Flex (TKF), and powered base buildings (PBB) – with a record of 99.999% uptime, unmatched by any other data centre provider. In October, Digital Realty announced it has entered into a 50/50 joint venture with Mitsubishi Corporation to provide data centre solutions in Japan. The joint venture, named MC Digital Realty, will benefit from Mitsubishi’s local enterprise expertise and established data centre presence in Tokyo, as well as Digital Realty’s global client base and industry-leading track record of

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data centre operational excellence. Digital Realty will contribute its recently completed data centre development project in Osaka, while Mitsubishi will contribute two existing data centre facilities in the western Tokyo suburb of Mitaka. Collectively valued at approximately 40bn Japanese Yen – or approximately $350mn – the three assets will build a meaningful platform to serve the broader Japanese market, with the potential to significantly expand its scope over the next several years. And in September, Digital Realty, which turns over $2.7bn annually,

‘FOR NINE YEARS, DIGITAL REALTY HAS DELIVERED A PORTFOLIO OF DATA CENTRE SOLUTIONS WITH A RECORD OF 99.9% UPTIME, UNMATCHED BY ANY OTHER DATA CENTRE PROVIDER’

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Based in Sydney, Australia, Greenbox delivers innovative data centre architectural design services to clients throughout South East Asia. Resilience is at the core of our philosophy. Resilient buildings donâ&#x20AC;&#x2122;t just sustain the required functionality but evolve alongside it â&#x20AC;&#x201C; a symbiosis of structural function, operational needs and style.

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I T / R E A L E S TAT E

announced the commencement of new data centre SYD11 – its fifth in Australia – which is being built in Erskine Park in Western Sydney. The facility will be adjacent to the company’s existing SYD10 facility, and this signifies huge expansion in the AUS market, adding to the other three Australian facilities in Digital Realty’s Australian portfolio – SYD 12 in North Ryde, and the two data centres in

Melbourne, MEL10 and MEL11. Once operational, SYD11, located across 16,360 sqm, will be a 14MW facility and the build, which will employ around 500 contractors, is expected to take 12 months. APAC vice-president, design and construction, Peter Adcock says Sydney – which has the biggest tech start-up ecosystem in Australia – is crucial to the Digital

“We’ve got the potential to pretty much double our APAC footprint in three to five years” – Peter Adcock, Digital Realty’s APAC vice-president, design and construction

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D I G I TA L R E A LT Y Realty’s ambitions in Asia-Pacific. It also has award-winning sites in Singapore, Hong Kong and Osaka. “We’ve got the potential to pretty much double our APAC footprint in three to five years,” he says. “Australia – and Sydney particularly – is an ideal location to be a hub. There’s a lot of demand from a whole range of companies that want to establish a presence and provide a low latency service in the country in Australia. “Sydney’s ideally placed on the Eastern Seaboard, with the fibre optic backbone that runs up through

‘THE ACQUISITION OF TELX IN OCTOBER 2015 UNIQUELY POSITIONED THE BUSINESS TO PROVIDE A COMPLETE RANGE OF DATA CENTRE SOLUTIONS ON A GLOBAL SCALE’ 116

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Brisbane and Queensland, and down to Canberra and Melbourne. It picks up a large part of the Australian population, and is sitting on submarine fibre cables too.” The company is currently working on its latest state-of-the-art, trademarked 4.0 Architecture POD (performance optimised data centres) design, and will install it at the new facility. Its unique trademark has been

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developed from the knowledge gleaned through the construction of more than $2.5bn worth of data centres globally, and uses a modular methodology to build-out raised floor data centre space using standard power and cooling building blocks for cost-effectiveness, design flexibility and energy efficiency. It will boast the same cooling solution that’s being adopted at its

larger scale facilities in the US, which have a pumped refrigerate economiser cycle on it as well, ensuring excellent annualised Power Usage Effectiveness (PUE) without any water usage, which can be quite excessive in large data centres. “We’ve got the lithium ion battery technology as well that we’re adopting,” Adcock reveals, “which gives a better performance than traditional lead acid. And on the monitoring side, we’ve got the data centre information management (DCM) product, which is a digital

“Australia – and Sydney particularly – is an ideal location to be a hub” – Peter Adcock, Digital Realty’s APAC vicepresident, design and construction

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158 2300 +1.9million data centres worldwide

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Adding value to your project – every step of the way • Over 40 years’ experience providing cost and general consultancy services to the global construction industry • Working across sectors such as Commercial, Data Centers, Education, Healthcare, High-Tech Industrial, Hospitality, Life Sciences and Retail • Providing faster project delivery, greater cost efficiency and maximum value for money • Working for the biggest search, owner-occupier and colocation providers in the world

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John Butler Managing Director, Asia Pacific john.butler@linesight.com +65 6801 4540

I T / R E A L E S TAT E

proprietary. It gives the team in the “The Digital Osaka 1 Data Centre US head office global visibility of the was the big one that really got the whole portfolio around the world. attention of the guys back in the US,” “That works off the same model adds Adcock. “That was 95% sold database as the BMS system which before it was opened. It started out as is a Schneider Struxuware Building an easy stepping stone for a lot of the Operation (SBO), Power Monitoring American companies, working with Expert (PME) unit. This means we can an S&P 500 company they know, and log in and find the utilisation of all our provided a product they’re familiar properties around the world in with because it’s consistent different locations, giving around the world, barring us the information any legislative or to manage and fine code differences.” tune operation and Osaka is a melting performance.” pot of many industrial The significant fields, a broad crossNumber of investment into SYD section of businesses, employees at 11 and the Asia Pacific universities and tech Digital Realty construction plan development. Two over the last 18 months cloud social media stemmed from the Digital companies immediately Osaka 1 Data Centre in Japan – its snapped up the space, and in first facility in the country, which May, Digital Realty announced it provides 7.6MW of IT capacity. is building Digital Osaka 2 ¬Data A thriving financial and colocation Centre – which is four times the centre, Osaka is the Silicon Valley of size of Osaka 1 – alongside it. Japan. A gateway for international It’s in the final stages of design and exchanges, it houses a population will launch next year. The two Osaka of more than 20mn people and has centres will create a Connected Data a GDP of approximately 80trn yen. Centre Campus, which SYD 10 and

1,400+

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“The Digital Osaka 1 Data Centre was the big one that really got the attention of the guys back in the US” – Peter Adcock, Digital Realty’s APAC vice-president, design and construction

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SYD 11 have been modelled on. “We always planned to expand in Sydney,” Adcock continues. “We also originally purchased a block of land next door to SYD 10, and it’s the next iteration of design – where SYD 10 is seven or eight megawatts, SYD 11 will be up to 14. “That’s driven by the increased density of the computer equipment that’s going on the white space, so that’s gone from a four to five kilowatt per cabinet average up to six, seven, eight – and in Japan we got some of that up to 12 to 15, so demand is driving the density increases as well, which is where we’ve had to become a lot more diligent on the airflow management.” Earlier this year, Digital Realty CFO for APAC, Krupal Raval, revealed many of its global top-tier clients are looking to expand massively in Australia, facilitated by the Connected Campus of SYD 10 and 11. Digital Realty Connected Campuses bring all the critical data centre, network elements, cloud and connectivity together under a single, secure environment for

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Build Here. Digital Realty.

numerous Australian and international customers. They deliver the on-ramp to the cloud, plus Digital Internet Gateways that optimise customer value through massive network-dense connectivity. The beauty of the Connected Campus is that even on SYD 11’s first day of operation, there’s already a connectivity-rich environment next door, and because the two data centres are side by side sharing a common boundary, the conduits at the boundary already exist and can be connected in. “It gives a very strong ecosystem of customers through the POP and service exchange, and rather than

coming in and out of the data centre, they’re actually doing business within it,” Adcock explains. “If you have a large mix of customers, like we have, they’re all exchanging amongst each other, and once you get the on-ramp to the Cloud, players such as Amazon, Google and Microsoft – Facebook is doing something different – once you get one or two of those companies in, the whole thing starts to multiply.” In December 2015, Digital Realty announced a partnership with IBM to launch Direct Link Colo, a solution that connects customers its data centres directly to IBM Cloud via SoftLayer’s global Cloud infrastructure platform.

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“We’re being asked more frequently to provide remote services in the data centres that we’re working in” – Peter Adcock, Digital Realty’s APAC vice-president, design and construction

Latest stateof-the-art, trademarked 4.0 Architecture POD (performance optimised data centres) design

By removing third party carriers, the hybrid eco-system for organisations is easier. “Some of the companies are so big, they acquire to catch up,” he adds. “IBM acquired SoftLayer and are buying into new digital technology. Microsoft is putting a lot of money to catch up with Amazon, who got an early adoption lead. And Google does its own thing.

Adcock says because the industry is growing so quickly, the biggest challenge is finding employees with the right skillset – and keeping them. “We’re being asked more frequently to provide remote services in the data centres that we’re working in,” he reveals. “I think that’s just a case of, things are growing so quickly, some of our customers are trying to push more of that onto us,

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which is something we support. “But everyone is struggling to find people that are trained. It’s interesting, as we’re actually finding companies that are either evolving the company itself – or groups within the company – to specifically service data centre work. “It’s quite a unique skill set because, you actually want a highquality product built quickly to start with, which is challenging itself – but these facilities are never build out 100% day one. “And we use a modular, POD-type system, so as you go back and do those build outs in a live data centre, you need to have tradespeople that are very aware of what environment they’re working in – you don’t want something they’re doing to bring down customers’ operations.

“These have to be very precisely planned and designed and built so that you can shut down sections of it, and use your redundancy to do your maintenance without impacting on the customer. So, you tend to build quite strong relationships with very precise people that understand the whole Permit for Work process and are very detailed.” He reveals another challenge is that whenever anyone wants to start up a data centre, they try to entice staff away from Digital Realty, because they know they’ve been well trained, and the process and procedures in place are industry-leading. In Australia, co-location growth is predicted at a compound annual growth rate (CAGR) of 11.4% until 2022, and managed hosting revenues predicted to grow at a CAGR of 14.5%.

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Digital Tseung Kwan O - A virtual tour of Digital Realty’s Hong Kong Data Center

ONCE FULLY OPERATIONAL, SYD11 WILL BE A 14MW FACILITY, ACROSS A TOTAL OF 16,360 SQM But Adcock claims the future of colocation managed services is hard to define over the next few years. “Now, with your cloud, you’ve got private, public and hybrid,” he explains. “What colocation does, and always will, is allow the smaller companies as they’re growing a stepping stone. “But equally, with the Amazon and Microsoft, they’re almost virtualising that colocation process – and to the same extent, we are, through the service exchange. That gives you the chance to connect to a lot of different services, and electronically, where in the past you used to have

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the physical cross connects. “They’ll still be around, but I think the business is evolving and virtualising a lot of those features. I think the big thing is going to be ‘bots’, so rather than speaking to a person, it’s an automated service.” He uses the analogy of driverless cars, saying a lot of those features are already currently in the background, ditto with aeroplane auto pilots, “but we still have pilots there to step in when something out of left field happens that hasn’t been programed in, and would take some time for a computer to adapt. “There’s always going to be a future

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there for these,” he adds, “it’s just a matter to what scale they fit in to the whole stepping stone process.” Data centres are essential utilities, as like in previous centuries, when power, electricity, water and telephone exchanges were. Because data centres and WiFi-type services are provided at the edge, people have got used to having instantaneous content-rich data, which then dictates low latency high bandwidth services – and while they’re an essential utility, the performance they need to operate is at such a high level. “There’s a lot of talk about edge computing, and really that falls back into where you get demands for low latency,” he adds. “There’s such a data-rich environment demanded nowadays. “We used to have main frames and desktops, then it was laptops, and now handheld devices are doing the same thing. There’s so much compute power that’s embedded everywhere now that needs to be connected

back to somewhere, and the Internet of Things is going to be an amazing opportunity for people who mine that for performance and applications.” Adcock says he sees DNA genome as one of the major technology breakthroughs, and finds it mapping mind-blowing how you can have bespoke medicines targeted for you based on what genes you’ve got and how they react. “It used to take years to map the DNA genome of the humans,” he says, “and now they’re offering it as a service which is done in a matter of days. Behind that is massive compute power, so we’ve seen some of the institutional companies investing a lot of money in those analytics. “Sometimes, you dare not ask what’s happening in some of those data halls. Our POD is typically 1,000 sqm of white space and you walk in there from one end to the other and it’s just rows and rows of computers – and what they can be doing on them now is amazing.”

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78 NOVEMBER 2017

FRANCE  PARIS PORTE DE VERSAILLES  PAV. 4

Heading for a collaborative & digital supply chain

• EXHIBITION • BUSINESS MEETINGS • CONFERENCES www.supplychain-event.com

20-23 MARCH 2018

FRANCE  PARIS NORD VILLEPINTE  HALL 6

International Week of Transport and Logistics

• 40,500 PROFESSIONALS • 800 EXHIBITORS • 100 CONFERENCES • 8 HIGHLIGHTS • THE INNOVATION AWARDS • SMART HUB by SITL www.sitl.eu

20-23 MARCH 2018

FRANCE  PARIS NORD VILLEPINTE  HALL 6

Materials handling exhibition for industry and distribution

• 15,000 PROFESSIONALS • 150 EXHIBITORS • CONFERENCES • THE INTRALOGISTICS EQUIPMENT AWARD • SMART HUB by INTRALOGISTICS