Sme Advisor 135 issuu by SME Advisor Middle East

MOM LOOK, Iâ&#x20AC;&#x2122;M A

UNICORN! ISSUE 135 MONTHLY FOCUS: INTERNET OF THINGS (IoT)

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Happy employees are 12% more productive

Happiness is critical for productivity and employee benefits are rightly seen as key drivers for employee happiness. At Bupa Global, we offer cost-containment options across a tiered range of business health insurance plans to suit the needs of your business. So, you can help protect the people who protect your business.

To know more call our hotline 16816 or visit bupaglobal.com/egypt Bupa Egypt Insurance SAE, a company incorporated in Egypt (Commercial Registry No: 67829) whose head office and legal domicile is at Building 55, Street 18, Maadi, Cairo, Egypt, with issued capital of EGP 60 million. Bupa Egypt Insurance SAE is regulated under law no. 10 for year 1981 and its executive regulations hold Egyptian Financial Supervisory Authority (EFSA) license under number 20 for year 2004. Bupa Egypt Insurance SAE operates under the trading name of â&#x20AC;&#x2DC;Bupa Globalâ&#x20AC;&#x2122;.

GIVE THE WORLD A SCENT OF AUTHENTICITY, GENEROSITY AND A MEMORABLE ESSENCE

MILLION VISITORS

SUPERSTORE OF THE FUTURE

DIFFERENT PRODUCTS

Expo 2020 Dubai is seeking traditional perfumers from the UAE to create a unique and distinctive range of scents that capture the essence of Expo 2020 Dubai. It’s more than perfumes. We are also looking for oud, bakhoor and attars to compliment the range of Expo 2020 Dubai souvenirs offered to those visiting the UAE. Adopting traditional techniques and natural ingredients, the Expo 2020 Dubai scent will need to be both authentic and to capture the essence of Dubai and the UAE’s blend of heritage and modernity. We want to work with experienced companies that have the specialised skills, expertise and resources to develop bespoke products for both ladies and gentlemen. To learn more about this opportunity, contact us at licensing@expo2020dubai.ae or register your company on the eSource portal (esource.expo2020dubai.ae) to make the most of this unique chance.

Connecting Minds, Creating the Future

expo2020dubai.ae

SME Advisor Middle East is aimed at business owners and senior executives across the GCC. Armed with practical advice, it has been highlighting key business issues for the small and medium enterprise segment since its launch in 2005. The magazine addresses real issues faced by business decision makers, without resorting to jargon. We understand that often, in small and medium enterprises, specialist business decisions are made by the owners and not by an army of c-level executives. At the same time, our content is equally relevant and useful for specialist, senior executives in mid-level enterprises. The magazine style is consumer, conversational and colourful.

From the web

Dubai South hosts Digital Marketing event On April 26, 2017, Dubai South hosted a half-day conference on the topic “Digital Marketing - Learn how to position your brand”. The event engaged the region’s SMEs in an informal morning discussion and educated them on where their marketing dollars should be spentin 2017. Experts from Google, Twitter, LinkedIn, MCN Holding, SAP and The Improbable Agency shared key insights on the subject using relevant examples. The audience walked away with answers to key areas such as - the importance of marketing, selecting a digital marketing partner, using platforms to optimise ROI and much more. The day ended on a high note when selected attendees got a chance to tour Nestle’s Consumer Care and Conversation Centre.

For further information, please visit: dubaisouth.smeadvisor.com Co Founder and CEO Nadeem Hood

Co Founder and COO Georgina Larsen

Editor in Chief Rushika Bhatia rushika@cpibusiness.net

Design Team Solomon Arthur solomon@cpibusiness.net Juzer Karbalai juzer@cpibusiness.net

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Published By: CPI Business FZ LLC Office 111, Building 4 Dubai Media City Dubai, United Arab Emirates

Assistant Video Producer Farzan Akmal farzan@cpibusiness.net Event Coordinator Zainab Murtaza zainab@cpibusiness.net Printed by Print Well Printing Press Contact Details: Tel: +971 4 433 2446 Email: info@cpibusiness.net Web: www.cpibusiness.net

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© Copyright 2017 CPI Business. All rights reserved. While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

UAE is the most connected country on LinkedIn

LinkedIn announced that it recorded 500 million members across 200 countries and 22 million members in the MENA region.“It is great to see the UAE ahead of the rest of the world when it comes to recognising the value of a strong online professional network. A large majority of the UAE’s workforce has come from abroad - LinkedIn makes it easy for professionals seeking to connect with each other around the world, and to keep up to date with relevant companies and industry topics, wherever the market. We are excited to have reached the 500 million milestone globally, and look forward to seeing how our breadth of talented members will help us to achieve our goal of creating an economic opportunity for every member in the workforce,” said Ali Matar, Head of LinkedIn Talent Solutions, Emerging Markets, Middle East and North Africa.

To read more, please visit: www.linkedin.com

Etisalat’s new ‘Smiles’ customer engagement program

Speaking on the occasion of the launch, Khaled Elkhouly, Chief Consumer Officer, Etisalat UAE, said: “The Smiles program is intended to have a deeper engagement with our customers and to increase our customer happiness. We already have millions of customers benefiting from the Etisalat Rewards program, and millions more enjoying special deals with our Deal of the Day program and our Etisalat Marketplace platform. The Smiles program not just combines these benefits but takes it to an all new level with the widest range of deals and rewards in the UAE. The main highlight of the program is that it is delivered completely on a digital platform with the Smiles app and website for customer ease and convenience.

To read more, please visit: smiles.etisalat.ae

Editorâ&#x20AC;&#x2122;s Note

RUSHIKA BHATIA EDITOR

2017

They are focused. They are fast. And, they are unstoppable. Presenting our monthly list of companies that could disrupt the IoT sector. In this issue: COM IoT Technologies, Etechan International, Tayar and more... Meet these IoT entrepreneurial geniuses.

BUSINESSES DISRUPTING THE IoT SPACE

COM IoT Technologies

Etechan International

Tayar

COM-IoT Technologies is an IoT innovation start-up that was established in the UAE in June 2016. The company focuses on developing intelligent connected solutions utilising LiDAR technology, arrays of sensors, mapping systems and integrated technologies for use in three areas: smart city, traffic safety and device management through its global IoT platform. What makes this story special is that COMIoT Technologies is one of a few IoT innovation companies in Dubai whose solutions are being developed locally as opposed to in Silicon Valley or Berlin. 68

Etechan International is a national business established under Dubai SME that develops new and unique smart technologies. The company was founded by UAE Nationals, who are well-reputed as strong experts and pioneers within international business development. Over the last six months to a year, the company has created customer solutions for various sectors such as education, health, marketing, awareness, and tourism. 64

With corporate giants such as Honeywell and Hitachi leading the way, the IoT space is growing exponentially. Ardent entrepreneur Mohammed Rashid was quick to notice the heightened demand within the market and launched his start-up Tayar. Tayar is an Internet of Things (IoT) based smart building system that allows the user to control and monitor any electrical device with a single add-on. In simple terms, it tracks user patterns, analyses them and then suggests the best ways for them to save energy. It also securely stores energy usage data and helps users tracks trends and consumption patterns. 60

Contents

What’s trending 020 Mom look, I’m a unicorn 024 Rehashing your business strategy

The economist’s view 030/ IoT – explained 034/ Taking the first steps

Editor’s roundtable 038/ Everything is connected

Talking trends 042/ Tracking trends with IDC

Infographic of the month 048/ Looking to a connected future

034/

RETAILERS CAN BENEFIT FROM KNOWING THE RETAIL HABITS OF THEIR CUSTOMERS, OR CAN EVEN ADOPT NFC TECHNOLOGY TO ENSURE THAT PROMOTIONS ARE PUSHED TO RELEVANT CONSUMERS AT THE RIGHT TIME. Digitally disruptive 050/ A preview of Cashflow, Cost management

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TAYAR IS AN IoT-BASED SMART BUILDING SYSTEM THAT ALLOWS THE USER TO CONTROL AND MONITOR ANY ELECTRICAL DEVICE WITH A SINGLE ADD-ON.

& Change Conference

Business banking 054/ SME Academy – A recap of the journey so far

Top change makers 060/ Setting high benchmarks – Tayar 064/ Harnessing the power of IoT – Etechan International 068/ Getting smart – COM IoT

Organisation and structure 074/ The road to digitisation 080/ The security risks of IoT

Technology for business 086/ The future of manufacturing will be disrupted by IoT

What happens when a traditional sector like manufacturing is impacted by tech advancements like IoT?

86 30

In the simplest terms, what does IoT mean?

34 With so much data, the world of IoT can be overwhelming. Letâ&#x20AC;&#x2122;s help you take the first steps.

EXPLAINED 42

IDC has its finger on the pulse of the market. Here it presents a snapshot of the most compelling trends.

What this company is doing with IoT is mindboggling, but does it have a sustainable future? Find out here...

68 Mapping the journey of a growing enterprise venturing out into the IoT space.

C O N T E N T C U R ATO R S 018

CONTENT CURATORS

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Presenting this month’s portfolio of industry specialists and thought leaders, who played a critical role in producing the feature content of our magazine and ensuring that we were more topical than ever. JOE MYERS WRITER, FORMATIVE CONTENT

““ KHALID KHAN DIRECTOR OF MIDMARKET AND CLOUD, MEA & APAC, AVAYA

SME ADVISOR

“Sensors, combined with smart phones, will allow for more efficient energy networks (across cities and in your home), reduced congestion and improved transport, as well as recyclable, multi-use buildings.”

“An important consideration in determining how to achieve the best outcome for your business is to realise that the IoT is very vertical-specific, with unique challenges and opportunities related to each industry.”

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“The IoT journey in an organisation is not owned by a specific job profile, nor a discipline that belongs to one department alone. It is a collaboration of teams across the organisation.”

CK VISHWAKARMA FOUNDER AND CEO ALLTHINGSCONNECTED

““ PAUL BLACK DIRECTOR OF TELECOMS AND IoT, IDC MIDDLE EAST, TURKEY, AND AFRICA

“In 2017, innovation will take centre stage in the IoT space, particularly as the Middle East market starts to rebound. Operators will begin to focus on enhancing existing IoT platforms to reduce the time to market of new solutions. Operators will also realise the importance of such IoT platforms, forcing some to develop their own.”

““ MIKE WESTON VICE PRESIDENT CISCO MIDDLE EAST

“The term “Internet of Things” is fundamentally misleading. It’s not so much about the Internet, which is just a mechanism for transmitting information, it’s about the changing nature of the “Things” themselves.” SME ADVISOR

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MOM LOOK, I'M

A UNICORN! Amidst headlines about dynamic global markets, do unicorns still have the same appeal? Here’s a analysis of the current landscape..

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Long-term growth needs to be based on revenues and monetization models.

or the benefit of those that aren’t familiar with the term, ‘unicorn’ is a colloquial reference to private companies that are valued at US$ 1 billion or more. It’s also the name of the latest Frappuccino drink introduced by Starbucks, but that’s a whole different story that I’ll leave for another time. The irony is that the term unicorn emerged because start-ups that could be worth a billion dollars in a such a short span of time were considered rare. In fact, it was almost a myth. But as of January 31, 2017, CB Insights revealed that there are 185 private unicorn companies. Their combined value is US$ 663 billion with a total funding of US$ 126 billion by 2800 investors, who have a stake in these businesses. Phew! Those are some mindboggling numbers. What’s even more intriguing is that the unicorn club is quite diverse in its members – it’s hard to find an underlying trend or common factor. Yes, the largest share of these companies operates within the e-commerce space. No guesses there. And of course, the largest number of unicorns have come out of the USA. Yet, it’s hard to pin down one underlying strategy that has led them to their success.

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For instance, we have the likes of Uber and Airbnb, who took an existing industry and improved the offering to capture a larger market share. On the other hand, we also have companies like Snapchat or Pinterest that have introduced a completely new idea to disrupt their industry. Finally, there are those that have built an attractive proposition to get acquired by large giants such as Jasper (by Cisco), Lazada (by Alibaba) and Gilt. Closer to home, we’ve all seen, heard and lived Souq.com’s rise to the top and its eventual acquisition to Amazon in March this year. Value vs. valuations – It’s not easy being a unicorn! What these companies do have in common is valuation. Their high valuations have given them entry to this elite membership. Looking back to 2015, getting a US$ 1 billion valuation was more about being recognised as a mover & shaker in the market, attracting press attention and poaching top talent. It wasn’t focused on the actual value of the company – it was merely a ‘guesstimate’ by the company’s investors. Which brings me to another aspect of this interesting conversation – how apt are these valuations? Are they bloated? Are we edging on a fine line between actual value and proposed valuations? The simple answer: yes. The reason why this is happening is because investors are not betting on the profits these companies are making. They are betting on their growth potential – their ability to capture a large market share very quickly. Yes, these companies are forging new business models, but in the process, profit is completely forgotten. Their valuation is associated with future performance and their ability to demonstrate rapid growth. Here’s how I look at it – Actual value = Current performance Proposed valuation = Future performance

Let’s look at an example. Snap Inc. (formerly known as Snapchat) has been facing a lot of criticism for its over stretched valuation. Analysts argue that the numbers don’t make sense – especially if you were to compare the company’s user base to more-established competitors such as Facebook, Twitter or Google. Since its inception in 2011, Snap Inc. has seen a total loss of US$ 1.2 billion. The company poised its valuation to be between US$ 20 to 25 billion. Finally, it made its public debut at US $ 17 per share and its market cap in March was estimated at US$ 34 billion. To put things into perspective, this means the company is worth more than Target. While things still have a question mark when it comes to Snap Inc., the future of the company remains to be seen. 2016, however, saw a shift for unicorns. The number of exits declined and the amount of unicorn IPOs we’ve seen over the last two years reduced. A lot of these companies have been postponing their IPO dates to preserve their inflated value. Out of the six tech companies that went public last year, all are trading below their initial valuation. Investors, on the other hand, are still acquiring companies – but not ones that already have a US$ 1 billion valuation because they are slowly catching on. CB Insights reported that seven unicorns saw their valuations being lowered in 2016. Moreover, the deals offered to unicorns saw a 32 per cent decline in activity. But, don’t get me wrong. I’m not saying that this is the case for all unicorns. The likes of Uber, Snapchat and Airbnb have succeeded to a certain extent in justifying their valuations and have shown the performance investors had placed their big bets on. It’s just a matter of differentiating the real deal from the hype. And, how does one do that? Speaking from an investor’s point of view in an interview with LinkedIn’s

Image source: CB Insights

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Senior Editor, Rich Wong, Partner at Accel, said: “The perfect answer is only known in hindsight. I don’t think most people would have guessed that Facebook would become a US $300 billion company or that Google would either. That wasn’t obvious when they were private or when they went public. One of the things that has been part of the frothy environment is that things are “easy” when it comes to raising capital and there isn’t a need to prove out a truly sustainable business model. Companies that are much more speculative, maybe they lose money for every delivery that they make, will be in trouble.” Beyond the labels So, all this begs the question – is it time to move beyond the labels? From unicorns

and gazelles to zebras and cockroaches (yes, that term exists!), we’ve heard it all. But, here’s the thing: what happened to the simple old “you make money, you get noticed” mantra? Let’s be honest, making money matters and it’s the best way to be taken seriously. Long-term growth needs to be based on revenues and monetization models. Wong’s advice in this regard really hits home: “The world has woken up to reality that you have to have the right discipline and fundamentals when raising large chunks of capital. For the entrepreneurs who have the excitement to build a great business, we are still on the early innings of some exciting long trends. This is the first year that over 50 per cent of the world’s population is going to have access to a mobile phone. That is a big deal. That

creates a huge opportunity for anybody who is building a mobile application. The great companies of the earlier era were all about building big data centers like Cisco and EMC. All of that is now shifting to the cloud and that is a transition that is really in the first or second inning. So, I wouldn’t overly buy into the doom and gloom because there still are some incredible companies with incredible innovations to be built in the next five to seven years.” Looking to the future, unicorns really have two options: to go easy with their spending and focus on building a viable business model or to lower their valuations and get bought out at values lower than anticipated. Back to basics, unicorns? I sure do think so. SME ADVISOR

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REHASHING YOUR BUSINESS STRATEGY Experts from Credence International describe the current conditions that business owners face and how they need to reconstruct their strategies in order to move ahead. SME ADVISOR

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EDITOR’S PICKS 01. Whatever the reason for an exit strategy it is important to know your options and to maximise the opportunity of you exercising any of those options with the most lucrative outcome. 02. Whether legislation requires or not, keeping correct and organised accounts is key having the ability to monitor, record and analyse your accounts to identify the areas for improvement.

trategy One: Planning your exit strategy A CEO and founder of a successful business must see the company in a similar light to one of their own children. After pouring in their own blood, sweat and tears, that business must be just as close to their heart as their own flesh and blood. So, surely that founder would never want to exit the business? Wrong! And here is why. Seed money, whether it be from venture capitalist, angel investors, private equity etc., will need to be repaid. Whereas unlike a loan, the investors see no return until they cash out or the company is sold. So, an exit plan is required for outside investors to collect their cash. The “art of the start” is something that entrepreneurs thrive on. However, once a company proves to be successful and achieves targets of millions in revenue, the operating of a cash cow may not have the same thrill of a dynamic and rapidly growing start-up. Whatever the reason for an exit

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strategy, it is important to know your options to maximise the opportunity. 1. M erger & Acquisition (M&A). This normally means merging with a similar company, or being bought by a larger company. This is a win-win situation when bordering companies have complementary skills and can save resources by combining. For bigger companies, it’s a more efficient and quicker way to grow their revenue than creating new products organically. 2. I nitial Public Offering (IPO). This used to be the preferred mode and the quick way to riches. But since the Internet bubble burst in the year 2000, the IPO rate has declined every year until 2010, and is now at about 15 per cent. We don’t recommend this approach to start-ups these days. Shareholders are demanding, and liability concerns are high.

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The “art of the start” is something that entrepreneurs thrive on.

3. S ell to a friendly individual. This is not an M&A, since it is not combining two entities into one. Yet it’s a great way to “cash out” so you can pay investors, pay yourself, take some time off, and get ready to have some fun all over again. The ideal buyer is someone who has more skills and interest on the operational side of the business, and can scale it. 4. M ake it your cash cow. If you are in a stable, secure marketplace, with a business that has a steady revenue stream, pay off investors, find someone you trust to run it for you, while you use the remaining cash to develop your next great idea. You retain ownership and enjoy the annuity. But cash cows seem to need constant feeding to stay healthy. 5. L iquidation and close. Even lifetime entrepreneurs can decide that enough is enough. One often-overlooked exit strategy is simply to shutdown, close the

business doors and liquidate. There may be a natural catastrophe or the market you counted on could implode. Make rules up front so you don’t end up going down with the ship. Whether your business was started as a labour of love, or as a retirement plan it is important to think ahead and just what is going to create value and saleability of the business in years to come. Credence International is an expert in corporate financial planning and can advise on just how to maximise your return. Strategy Two: Managing working capital to survive in a dynamic market Working capital is the lifeblood of your business and is a balancing act. Being able to pay off short term debts and expenses is critical to business continuity. An excess of liquid funds indicates that assets are not being invested for the long term, and there are opportunities that are not being taken advantage of. SME ADVISOR

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Create a culture of accountability and thriftiness.

As with a private investor, working capital management strategy will vary depending on a CFO’s attitude to risk, the timescales they are working to and the market conditions they are operating in. However, there are certain precautionary measures that will be taken to ensure the bills are always paid and the bank account has a sufficient reasonable surplus. Cashflow forecasting and provisions are tools with which a management accountant can plan for the foreseen and unforeseen outgoings that are going to occur. Having a contingency plan to provide further access to funds, whether it be through debt, equity, liquidising further assets or personal wealth is a necessary part of contingency planning. Having appropriate insurance in place for certain eventualities is a way of outsourcing risk and minimising the chances of unforeseen expenses. All these measures are the necessary ways of reducing the risk of running out of working capital, although elimination of the risk all together is unlikely to be achieved, especially when operating in SME ADVISOR

a dynamic marketplace. It’s important to remember those basic tools given at academic level to identify the external and internal factors that we are subject to. Political, economic, social, technological, legal and environmental factors (P.E.S.T.L.E.) need considering. These are the external factors outside of a company’s control, any one of which could drastically impact working capital by reducing income or increasing cost, by making a product obsolete, or removing the ability to trade in a marketplace. Hence, the importance of proactively monitoring and reducing risk by diversifying product ranges and marketplaces, continuous improvement, creating barriers to entry, keeping ahead of technological advances and outsourcing, reducing and mitigating risk to acceptable levels. Strategy Three: 10 steps to boost your bottom line and reduce costs 1. Be organised – Whether legislation requires or not, keeping correct and organised accounts is key having the

ability to monitor, record and analyse your accounts to identify the areas for improvement. 2. L ook to the future – A forecast for every income and expense line needs to be completed with justifiable sources for each number, and then updated on a regular basis. 3. V ariance analysis – Your robust accounting of actual results compared to the forecast with reasons for variances highlighted. 4. S pend it as if it’s your own – Create a culture of accountability and thriftiness. The “spend it as if it’s your own” mantra resonates amongst all level of seniority in the business. The attitude of an organisation descends from the top, and a cost-conscious CEO will inspire all levels of the business to be frugal. 5. S treamline – At the point of forecasting, analyse every expense line on the P&L and ask whether it can be reduced. A

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procurement champion is useful here, and every cost category a 15 per cent cost reduction target is a way to ensure savings. 6. P rofit protection department – A senior staff member who is well thought of in the business is ideal to lead a profit protection department. Some support services managers are sometimes unable to quantify the value they add to the business. This is a sure way of a manager quantifying saving they have instigated. 7. R egular reporting – Monthly, weekly or even daily reports as to expenses and KPIs will create a culture that is determined to stay within cost targets. A direct report should feel that their hierarchy of command will be aware of overspends. 8. I nvolve staff at all levels – Once the correct culture of cost saving has been created, encourage input from all levels of the company. It is vital that staff members on every level are felt to realise

their level of importance to the company when it comes to cost saving and profit protection. It is generally the case that those cellular levels of operational employees have the day to day knowledge of where small changes could be multiplied throughout an organisation to create very material changes. 9. R etain your good employees – Investing in staff and creating a fulfilling and rewarding work environment is vital to keeping your good people. An employee may leave due to the not feeling valued, not being rewarded, or not having opportunities to progress. This leads to recruitment and training costs, reduction in quality of output, and a less loyal workforce. It is better to invest in your staff’s development and improvement at the risk that they leave, rather than to not invest in their development and they stay. Credence International specialises in staff saving schemes and gratuity liability planning to ensure a loyal and fulfilled workforce.

10. W ork smarter – Regardless of whether your company manufactures, provides services or sells finished goods, there are many smarter ways of working to reduce costs. Kaizen is the Japanese word for the strategy of continuous improvement. This could be done in the form of reducing inventory, investing in technology, going paperless, asking for discounts etc. But there is no perfect operation out there, therefore, always looking for way to improve efficiency will result in continuous improvement, lower costs and increased profits.

CREDENCE INTERNATIONAL IS A WEALTH MANAGEMENT AND ADVISORY FIRM ESTABLISHED TO CREATE A UNIQUE PRIVATE CLIENT PROPOSITION. IN A WORLD WHERE LIFESTYLES, ECONOMIES AND TECHNOLOGIES ARE CONSTANTLY EVOLVING, WE WERE ESTABLISHED TO GIVE OUR CLIENTS ENHANCED SOLUTIONS IN A SIMPLIFIED FORM. FOR FURTHER INFORMATION, VISIT WWW.CREDENCE-INTERNATIONAL.COM. SME ADVISOR

the economist â&#x20AC;&#x2122; s view 030

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the economist â&#x20AC;&#x2122; s view 031

EXPLAINED

Joe Myers of Formative Content goes back to the basics and breaks down the concept of IoT in its most simplest terms. SME ADVISOR

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EDITOR’S PICKS 01. Connected devices can be controlled remotely – think: adjusting your heating via an app – and can gather useful data. 02. Sensors, combined with smart phones, will allow for more efficient energy networks (across cities and in your home), reduced congestion and improved transport, as well as recyclable, multi-use buildings.

50 billion the number of connected devices set to exceed, by 2020. According to reports by SAP

250 million Connected vehicles on the road by 2020, Gartner forecasts

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The Internet of what? The internet of things is a term you may have heard a lot recently. It features heavily in discussions about our future – and, increasingly, our present. But what is it? This is a simple guide to the term, the impact it’s set to have, and how it might change your life. The internet of what? At its heart, the concept is very simple. It’s about connecting devices to the internet. This doesn’t just mean smartphones, laptops and tablets. Jacob Morgan from Forbes talks of connecting everything with an “on and off switch.” The ‘smart fridge’ dominates media discussions. A fridge that could let you know when you’re running out of something, write a shopping list, or alert you if something has gone out of date. But, in theory, anything from a jet engine, to a washing machine could be connected. Connected devices can be controlled remotely – think: adjusting your heating via an app – and can gather useful data. According to SAP, the number of connected devices is set to exceed 50 billion by 2020. Revenue for the providers of IoT services is also growing rapidly, as this chart shows. Solving problems on a massive scale The IoT is about much more than connecting multiple objects in your home to the internet. As the World Economic Forum’s Intelligent Assets: unlocking the circular economy potential report has highlighted, the IoT has the potential to transform entire cities. Sensors, combined with smart phones, will allow for more efficient energy networks (across cities and in your home), reduced congestion and improved transport, as well as recyclable, multi-

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T he IoT is about much more than connecting multiple objects in your home to the internet.

use buildings. Houses, offices, factories and public buildings could all generate electricity from renewable sources. Sensors would then coordinate the distribution and storage of this power, making whole systems cleaner, more efficient and more stable. Smart cities could also make your journey to and from work much easier. Real-time traffic data, gathered from sensors, could reduce journey times. Mobile parking apps will make finding a space much easier, while smart street lights would light your way home. Connected cars are set to be a major part of the IoT. Gartner forecasts that by 2020 there will be more than 250 million connected vehicles on the road. Live traffic and parking information, realtime navigation, and automated driving could all become a reality as connectivity spreads. The installation of 42 ‘nodes’ – data collection boxes – is set to begin this summer in Chicago. By 2018, the Array of Things project hopes to have installed 500 across the city. This map shows the location of the original 42 nodes, which will gather data on topics from air quality to traffic volume. All this data will be made available to the public. It will provide real-time,

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location-specific information about Chicago’s “environment, infrastructure and activity”, according to Array of Things. The IoT has the potential to make our lives better. More efficient heating systems could save us money, transport apps could save us time, and new electrical grid systems could help save the planet. So it’s all great then? Not quite. There are numerous security concerns around having so many

connected devices. Each connected device in theory becomes a risk, and a possible target for hackers. Many of these devices contain a lot of personal information and data. Consider a smart electricity meter. It knows your electricity use and typical times you’re at home. All of this could be available to a hacker. If a whole city is connected, the risk becomes much greater.

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Each connected device in theory becomes a risk, and a possible target for hackers.

This article was originally published on the World Economic Forum’s agenda

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the E conomist â&#x20AC;&#x2122; s view 034

TAKING THE FIRST STEPS: HOW TO BENEFIT FROM THE INTERNET OF THINGS WAVE SME ADVISOR

Khalid Khan, Director of Midmarket and Cloud, MEA & APAC, Avaya, helps demystify one of the key emerging technology trends that is transforming business today.

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EDITOR’S PICKS 01. An important consideration in determining how to achieve the best outcome for your business is to realise that the IoT is very vertical-specific, with unique challenges and opportunities related to each industry. 02. The vast scope of the IoT can also be intimidating, especially when a Google search will turn up many differing opinions on how best to exploit the connected world.

KHALID KHAN DIRECTOR OF MIDMARKET AND CLOUD, AVAYA

he Internet of Things. Everyone’s talking about it, everyone has their own definition of it, and yet surprisingly few people understand how best to capitalise upon it for the benefit of their business. Many SMEs consider Internet of Things (IoT) solutions to be beyond their reach, but the truth is that smaller businesses have even more agility when it comes to adopting the technology systems that will propel their business well and truly into today’s connected world. Savvy business owners today recognise that the power of IoT is something that can’t be overlooked, but knowing how and what to adopt to best suit your business is crucial to not only reap the benefits of connectivity, but to ensure that investment in technology is made wisely to preserve capital. To ensure the right business connectivity solution, having an expert opinion helps in identifying your needs, and to determine which specific technologies you can best benefit from. This is something that we specialise in at Avaya, and our first step is to ensure that our clients understand what the IoT is, and what it means to their business. In short, IoT offers opportunities for innovation and growth, but it goes far beyond that: it is the potential for everything that can connect to anything to be a source of big data, a communication portal, and so much more, with the ultimate end goal of creating automated or datadriven processes that generate specific business outcomes. These outcomes are only limited by imagination – they could be anything from using face-recognition to greet customers by name, to early detection systems that prevent building fires. The possibilities are endless. While this presents unlimited opportunities, the vast scope of the IoT can also be intimidating, especially when a Google search will turn up many differing opinions on how best to exploit the connected world. There are some good resources online that can help you to better understand what the IoT is and to give you an idea of how to SME ADVISOR

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etailers can benefit R from knowing the retail habits of their customers, or can even adopt NFC technology to ensure that promotions are pushed to relevant consumers at the right time.

apply it for your business, but there are some basic circumstances that are unique to your company that you should consider before taking the plunge. Firstly, ask yourself some simple questions: what do you want to achieve? How can the IoT help you to get where you want to go? What flexibility do you have in terms of upgrading existing connectivity infrastructure? And, possibly most importantly, how much can you afford to invest, and what return on investment do you expect? By working out the foundation of your requirements, you’re better positioned to select the solutions that work for you, or to engage expert help to guide you through the process.

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An important consideration in determining how to achieve the best outcome for your business is to realise that the IoT is very vertical-specific, with unique challenges and opportunities related to each industry. In healthcare, for example, fully secure connectivity must be achieved between life-saving medical devices, in addition to seamlessly delivering patient data to medical staff. Amongst the challenges here is the need for always-on connectivity and failsafe measures to ensure it remains so, as well as the ubiquitous needs for security and preserving data privacy. Retailers can benefit from knowing the retail habits of their customers, or can even adopt NFC technology to ensure that promotions are pushed to relevant consumers at the right time – such as when they approach a specific display stand – based on big data analytics. Again, the possibilities are endless, and customised solutions are key for your business to stay ahead of the competition. Another aspect to consider is unification throughout the business. As an SME, you have an advantage in this aspect – smaller companies have fewer departments or lines of business to convert when adopting an IoT approach. It’s important, however, that every aspect of the business be converted at once to drive a seamless experience, enabling devices throughout the company to communicate intelligently, so that data can be gathered and shared, organisation-wide. This is where the real benefits and return on investment will start to show. Ultimately, understanding the unique ways in which your company can benefit from the IoT, and determining an informed, intelligent approach to becoming an IoT-connected organisation will enable you to gain the most when you fully enter the digital world. A helping hand from a knowledgeable partner is always an advantage, too.

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EVERYTHING IS CONNECTED

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In a Q&A with CK Vishwakarma, Founder and CEO, AllThingsConnected, SME Advisor delves into the practicalities of Internet of Things (IoT) and explores its implications.

How do you view the term “Internet of Things”?

The “Internet” in the term Internet of Things (IoT) refers to the connectivity. Internet as we know is one of the mediums of connecting things (humans, machines; anything that can sense). I don’t see IoT as a term, but as a concept of connected solutions, for a purpose. In future, the medium of connectivity will evolve, and may not be an internet. Personally, I prefer using terms “ConnectedSolutions”.

Where do you see the IoT and its technologies creating the most impact?

I believe, apart from industrial, transportation, energy; the most visible impact we would see with IoT with Smart Healthcare. With advancements in BioTech, HealthTech in areas such as implantable chips, mems, early detection systems; we could possible address many of the health issues which were not possible before. IoT will help us in living a healthier and a better life.

How do you see the IoT being integrated in our lives in a meaningful way over the next five years?

My personal wish is that IoT shall be so streamlined in our daily life that we don’t even realise that it’s happened. Smart phones being one of the applications of IoT, I foresee that these devices would play even more pivotal roles in our daily lives.

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EDITOR’S PICKS 01. Digital Transformation with IoT is all about updating and upgrading the capacity to compete in a digital economy. 02. IoT will help us in living a healthier and a better life.

What is the biggest risk associated with IoT?

Primary risk with connected devices is with how well secured your data is. Data security should not be looked just at the edge level, but through the entire chain of communication. However, as every risk can either be mitigated or avoided, there is no 100 per cent risk free solution, nor one solution fit for all; hence the solutions architects, business owners and the users shall understand what risks they are taking and design their solutions, and engage with them accordingly.

What can enterprises do to accelerate the benefits of the IoT?

CK VISHWAKARMA FOUNDER AND CEO ALLTHINGSCONNECTED

The IoT journey in an organisation is not a trend owned by a specific job profile, nor a discipline that belongs to one department alone. It is a collaboration of teams across the organisation. The first thing that an enterprise should do is setup a strategic group of individuals from various departments, and bring them on a common platform as drivers to help identifying new ways and to redefine the way to work in the new digital era.

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How will the IoT impact talent and hiring?

IoT is all about solutions selling. Most organisations have shortage of such skills in both sales as well as delivery. The organisations who look ahead to move into IoT space will actively enhance the skills of its key workforce, or hire such talents. Professionals who wish to remain relevant in future business will also upskills themselves with the IoT solutions skills. The top skill - in my view - that organisations shall hire, or professionals shall develop is the end-to-end program management skills.

What’s one piece of advice you would give to a business owner interested in IoT?

IoT will enable Everything as a Service (Eaas) model. If your organisation is a traditional box selling organisation, you must relook how you can create customised services. Digital Transformation with IoT is all about updating and upgrading the capacity to compete in a digital economy. AllThingsConnected provides business and strategy advisory services to the organisations, and then works together with them to rebuild the products and services to help them remain competitive in the future.

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TRACKING TRENDS Paul Black, Director of Telecoms and IoT, IDC Middle East, Turkey, and Africa, takes a hardened look at the data and shares a compilation of his top trends...

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EDITORâ&#x20AC;&#x2122;S PICKS 01. The key challenges to IoT growth in the Middle East and Africa centre around data privacy and security concerns and the complex nature of IoT ecosystem, with its numerous standards and alliances. 02. The UAE government is also backing blockchain research and has pledged to ensure all public sector documents are on a shared and open blockchain platform by 2020.

L PAUL BLACK DIRECTOR OF TELECOMS AND IOT IDC

SME ADVISOR

ooking ahead, innovations will take centre stage in the IoT space, particularly as the Middle East market begins to rebound. Telecom operators will experiment with new technologies (such as blockchain) to improve security, privacy, and authentication mechanisms. In places such as Africa, major operators will seek to drive innovations in localised IoT solutions by tapping into the growing developer communities. In fact, larger service providers are expected to acquire smaller, niche IoT companies to increase their vertical expertise in the IoT ecosystem and improve their existing IoT offerings. Operators will also focus on enhancing IoT platforms to shorten the time to market of new solutions and offer a quicker route to market for specialised niche vertical players. IoT platforms may also be released to third parties and developer communities to increase the pace of innovation and accelerate the development of IoT solutions.

This move will strongly position telecom operators in the IoT ecosystem over the long term. However, the key challenges to IoT growth in the Middle East and Africa centre around data privacy and security concerns and the complex nature of IoT ecosystem, with its numerous standards and alliances. The key IoT predictions expected in 2017 are highlighted below. 1. Industrial Internet of Things (IIoT) will start revolutionising manufacturing in Turkey Several innovative companies in Turkey will soon start implementing IIoT by leveraging the intelligent connected devices in their factories. In fact, most multinational manufacturers in Turkey are looking to import smart manufacturing use cases that were previously tested in sites outside the country. In line with this goal, a few

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multinational manufacturers recently initiated pilot projects that include IIoT and other smart manufacturing enabler technologies (such as predictive maintenance, analytics, robotics, and cloud technologies). These pilot projects are expected to provide multinational organisations with greater efficiency, scalability, and cost savings in 2017. In the past, Turkish geothermal power plants — in partnership with GE — have also used IIoT to eliminate human error, reduce water wastage, and lower carbon dioxide emissions (and thereby improve their operations). This tactic has enabled these plants to save over US$0.5 million annually. IDC expects similar use cases to be adopted in the future. With the wider adoption of IIoT, manufacturers in Turkey will break open data silos and connect all of their people, data, and processes from the factory floor to the corporate IT

In 2017, innovation will take centre stage in the IoT space, particularly as the Middle East market starts to rebound. Operators will begin to focus on enhancing existing IoT platforms to reduce the time to market of new solutions. Operators will also realise the importance of such IoT platforms, forcing some to develop their own. Finally, operators may start to release APIs of their IoT platforms to third parties and developer communities to increase innovation and accelerate the development of IoT solutions in the market.

environment in order to enable faster decision making at the executive level. In 2017 and 2018, manufacturers will also focus on the integration of production-line components with internal IT systems. Combined with analytics, manufacturers will be able to optimise operations, diagnose problems and track inventory flows more effectively. Since IIoT will enable the faster and more efficient acquisition of greater amounts of data in the long run, business leaders will be able to get a fuller and more accurate view of their enterprises, which will allow them to make better decisions. 2. Operators in Turkey will unlock the value of IoT in 2017 by implementing IoT platforms In 2016, IoT started to become an enabler of digital transformation across all verticals in Turkey, particularly across the manufacturing, transportation, and government verticals. For example, manufacturing giants reviewed their internal and external processes to optimise their supply chain operations through the use of IoT. Fleet management services and other IoT systems that monitor both vehicle conditions and driver behaviour also presented significant opportunities. However, despite these promising developments in the Turkish market, the local IoT landscape remained fragmented in 2016, with the disparate solutions, devices, and platforms offered by a range of vendors preventing the full value of IoT from being unlocked. Nevertheless, in 2017 and beyond, operators in Turkey will heavily invest in IoT platforms that enable centralised device monitoring, application development, and data management. These investments will allow them to SME ADVISOR

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â&#x20AC;&#x153;â&#x20AC;&#x153;

In 2017, innovation will take centre stage in the IoT space, particularly as the Middle East market starts to rebound.

build application services for various verticals such as banking, healthcare, and utilities on top of existing IoT systems and decrease the time to market for such services. In the past, telecom operators also developed Smart City IoT platforms to provide various solutions such as smart home solutions, security systems, intelligent parking solutions, smart lighting solutions, and smart metering solutions. Even though IoT exists in a complex ecosystem and an end-to-end IoT application involves several technologies and entities, adopting a platform approach will transform operators into collaborative partners for different types of organisations (such as vendors, platform providers, system integrators, app developers, and industry alliances, as well as niche technology companies and start-ups). This adoption trend will shape operator strategies in coming years and change the competitive dynamics in the whole Turkish IoT ecosystem. 3. Heightened interest in cellular-based IoT networks expected in 2017 The Middle East region is home to a number of progressive telecom

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operators who have launched advanced communication networks as well as a number of ICT services. Some of these operators have made a mark for themselves by launching IoTspecific networks based on LoRa and Sigfox standards to capitalise on growing industrial and consumer IoT demand. LPWA technologies such as LoRa and Sigfox have seen some early adoption in the region due to their greater ease of deployment and fewer regulatory requirements. However, this adoption trend is expected to change as the IoT landscape becomes crowded and more complex, with diverse technology vendors, device manufacturers, and application vendors each vying for a share of the market. With the availability Third Generation Partnership Project (3GPP)-approved overlay technologies such as NB-IoT, IDC believes that the interest of telecom operators will shift to cellular IoT networks to align their future network investments in technologies such as 5G. 4. With the explosion of IoT connections, the relevance of IoT platforms will be realised sooner rather than later Despite the fact that telecom operators in the Middle East clearly understand the business potential that IoT has to offer in a larger context of smart cities, smart industries, and home automation, most providers are yet to deploy full IoT platform suites. While deployments may have been put off due to regulatory challenges or the current economic uncertainties, rollouts will eventually take place soon to handle the rapidly growing number of IoT connections. The success of such IoT platform deployments will be measured in terms of the level of security and flexibility offered using cloud-based delivery models and the

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ability to assure data sovereignty. Different industry alliances have different models for IoT device management â&#x20AC;&#x201D; for example, SigFox uses a centralised model while LoRa favours a federated model. A number of vendor IoT platform offerings also include centralised device management modules as part of the overall package. Flexible, transparent, efficient, and secure management of devices will be key in the success of any operator IoT solution. 5. The awareness of blockchain in the context of IoT to grow significantly in 2017 A number of centrally managed IoT solutions that have been launched required heavy investments in cellular and dedicated IoT networks such as LPWAN. However, as IoT is recognised for its potential to automate city administration, industrial, and even smart home solutions, operators are in need of technologies that reduce their reliance on the traditional broker-based networking paradigm. In this model, IoT networks rely on a central cloud server to identify and authenticate individual devices. Operators, however, want to shift to mesh networks in which devices can authenticate each other without the need for central brokers or certification authorities. Consequently, blockchain is emerging as a plausible solution that enables the creation of secure mesh networks while avoiding threats such as device spoofing and impersonation. While most early pilots and experiments have largely been in the financial sector, similar use cases are expected to be replicated in the telecoms sector going forward. The UAE government is also backing blockchain research and has pledged to ensure all public sector

documents are on a shared and open blockchain platform by 2020. Regional operators will thus closely follow the developments in this technology space and evaluate ways of leveraging them going forward. 6. In Africa, LPWN IoT Network Implementations to slowly start pushing IoT into the limelight and lowering interest in traditional M2M applications Most IoT applications have hitherto been based on cellular networks and have mostly remained the domain of traditional mobile operators. In 2017, however, a number of smaller non-mobile operators will start to deploy LPWAN IoT networks in order to provide low cost IoT applications. South Africa will lead this trend, as a few providers in the country are already testing LPWAN IoT networks. While Sigfox has announced plans to deploy its IoT network in South Africa, IDC expects most of the future implementations to be based on the LoRa standard, especially given the fewer stringent and exclusivity conditions associated with the LoRa Alliance standard compared to Sigfox.

7. The growing developer community and smaller niche solution providers to start bringing localised, specialised solutions to market The developer community will begin to take a greater interest in developing localised IoT solutions, finding simple IoT routes to market, and driving IoT adoption. In South Africa, for example, parking management and mobile point of sale (mPoS) solutions have been developed and are mainly being driven by small solution providers. Within the country, an M2M solution has also been developed that allows utilities and large organisations to manage their water resources more effectively by detecting leaks and anticipating demand (this solution was developed by WRP Engineers, a specialised company). In Kenya, start-up organisations are using the success of mobile money platforms as well as IoT to solve fundamental problems. For example, M-Kopa, a startup company, provides a solar powered lighting system to rural households that combines Big Data analytics, IoT, and mobile money capabilities. The company has so far connected over 400,000 homes in East Africa and launched a smart television device. SME ADVISOR

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LOOKING TO A CONNECTED FUTURE THE CURRENT LANDSCAPE US$ 7 BN IoT market is predicted to reach US$ 7 billion in 2020

20.8 BN connected things will be in use in 2020 – in comparison to 6.4 billion in 2016

IN 2016 the US Department of Transportation said it would invest US$65 million in initiatives funding smart city technologies, aimed at easing traffic congestion and creating new mobility services.

US$ 4.8 TN A forecast of US$4.8 trillion in aggregate IoT investment between 2016 and 2021

ORGANISATIONS EXPECT IOT TO HELP THEM IN –

60%

SOURCES: GARTNER, IDC, CRN, ACCENTURE, INTERNET OF THINGS INSTITUTE, HCL TECHNOLOGIES, VAN BOURNE SME ADVISOR

Increasing organisational efficiency

50%

Moving ahead of competitors

50%

Faster decision making to help customers’ needs

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THE OPPORTUNITY FOR ORGANISATIONS

THE CHALLENGES 90% admit facing challenging on deciding the right IoT platform.

85%

in 2016

of solution providers are currently deriving revenue from IoT solutions.

19% of business and government professionals said they had never heard of the Internet of Things and 18% said they were vaguely familiar with it

46%

22.5 BN

cite lack of expertise.

49% believe IoT represents a massive opportunity for them over the next 18 months.

IoT devices in 2021

are not using the right platform.

48% aren’t analysing the data they collect.

38% 31% are using platforms that aren’t scalable.

25% don’t have the right strategy in place. SME ADVISOR

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ecent economic developments across the region - and beyond - underscore three essential areas that every business leader needs to assess in order to survive. They are Cashflow, Costs and Change. And, there’s one common underlying factor between them: they all impact the bottom line of your business. So, how can you confront these dynamics to shape a better future for your business? Etisalat - in collaboration with CPI Business - presents a day dedicated to dissecting these three Cs and helping you craft fresh strategies to combat the growing challenges. Here’s what the event will discuss -

ϭϭ How to liberate your cashflow ϭϭ Managing debt ϭϭ Making a transition from a CAPEX to OPEX model

ϭϭ How to use data to improve financial control

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ϭϭ Survival strategies for a changing business climate Sounds intense? Well, don’t worry. Our money experts and economic gurus will break these topics down in the simplest terms and share fresh strategies for financial stability in this dynamic market. Plus, it’s just not going to be all talk! Microsoft and Etisalat are hosting a Business Cloud Workshop for SMBs to give you some practical, grounded training in a two-hour session.

Presenting Microsoft’s Business Cloud Workshop Cloud is the the new normal for businesses. However, there is a huge gap in the industry when it comes to cloud computing knowledge. What if there was a way to stay on top of such fast-changing technology developments and learn how to grow your business with cloud? Well, thanks to Etisalat-and in partnership with cloud

market leader, Microsoft- now there is!SMEs will get an exclusive chance to participate in a two-hour hands-on workshop and promises a ‘deep dive’ on the importance of IT consolidation, how to prevent data loss with cloud, business cloud email and conferencing demos, and much more. And, the real bonus? It’s absolutely FREE to attend. Intrigued? Find out more by visiting our official event website: http:// cashflowandchange.smeadvisor.com.

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COST AND CHANGE – AGENDA: CASHFLOW, REVISITING YOUR BUSINESS STRATEGY 9:45

Opening remarks and welcome

TOMORROW’S FINANCE LEADERS: NAVIGATING CHANGE