Earlier this year, Saudi Arabia announced Vision 2030, a long-term economic blueprint for branching away from its dependence on oil. Digitisation is at the heart of Saudi Vision 2030. Being the leading operator in the region, the Saudi Telecom Company (STC) is enabling the digitisation journey not just for Saudi consumers, but also for government agencies, large corporations and small to medium-sized enterprises (SMEs).
Telcos worldwide are being driven towards significant transformation, primarily owing to three factors: decline in conventional voice and text revenues because of the higher smartphone adoption rates, heightened demand generation amongst organisations of all sizes for digitisation, and the convergence of information technology and telecoms into what is now known as information communication technology (ICT).
STC has always delivered services to the enterprise sector, and has been the service provider of choice for government agencies and large corporations, in addition to being quite competitive for small to medium-sized enterprises. However, in the past, services were mostly delivered on a case-by-case basis through partners, suppliers, and vendors. Now, the situation has been refined and replaced by an integrated ecosystem. As Dr. Tarig Enaya, STC senior vice president of the enterprise business unit tells CommsMEA: “Having an intimate understanding of our customer’s needs and requirements, and more importantly their expectations, we decided to take a serious look at the whole value chain so that we could bundle connectivity and information technology services together in a more effective manner.”
In order to provide the customers with one unified accountable entity for all their needs, STC has taken charge and developed a suite of cloud and managed services to cater to the various needs of organisations embarking on digitisation.
Looking ahead, Dr. Enaya forecasts a more aggressive wave of digitisation sweeping the Kingdom. There are already several digitisation projects underway, which seek to introduce automation into previously complicated and fragmented processes requiring high levels of coordination, and large pools of service agents.
The government is digitising all of its services. There is a whole generation of Saudis growing up who will take digital services for granted, who find using vending machines, e-tickets very normal, who really do not understand why one has to visit a counter to get served. STC is banking on the requirements of this growing digital generation. “We have the biggest national and metropolitan network in the country, the best mobile service coverage, five data centres, a cloud computing platform like no other, an army of engineers and specialists, and the passion to match all of this to business needs and national initiatives that will change the way we live and work in the Kingdom,” says Dr. Enaya.
The cloud is a critical building block for the infrastructure requirement of this transformation, and coupled with managed services helps address complex digitisation requirements in a secure, reliable and accountable manner.
Capitalising managed services
Two years ago, STC took a bold move to transform and evolve from being a telco to an integrated information communication technology (ICT) solutions provider. It re-organised its service portfolios and as a result of that re-organisation, it is now more focused on providing end-to-end solutions in a managed service manner when needed, where customers no longer need to contract a third party to manage multiple technology service suppliers.
Though connectivity continues to contribute to the lion’s share of STC’s business, the company is expanding its IT services arm, specifically in the systems integration space, using its managed services, and cloud-based services.
Dr. Enaya believes that managed service delivery yields returns not just for telecom operators and customers, but also for conventional system integrators. In the past, system integrators delivered complete solutions up until the connectivity level, at which point they then addressed a telecom provider. However, this does not work for customers, who have high volumes of traffic and large numbers of transactions with their customers. They prefer a single point of contact instead – one party that is responsible for the whole system working. In a managed services delivery format, this is exactly what they get – a holistic solution with one party responsible for everything, including system uptime, disaster recovery, seasonal surges, support services, “everything,” stresses Dr. Enaya.
This method of working removes the boundaries between solutions and connectivity. With this kind of setup, customers reap the benefits of always having the latest and most secure technologies at their disposal, without having to invest heavily in IT resources for the efficient management of these solutions, while system integrators generate new revenue streams from the recurring fees associated with this new form of solution selling.
So, has the reception of the managed services matched expectations? Dr. Enaya is affirmative: “Medium sized organisations, which are expanding rapidly go for managed services to avoid technology management risk and give themselves the breathing space they need to focus on the business side of their expansion. Large corporations likewise are adjusting their operating models to move some or all of their technology expansion or upgrade costs, and in some cases some of their IT management costs to an OPEX based model and are using managed services to achieve this.”
Commenting on the uptake of such services by the public sector, Dr. Enaya says that government agencies are not exactly new to this kind of operating model.
“Government organisations in the Kingdom have been running their projects in managed services model for a long time. The difference in the past however was that the government structured the project, then farmed it out to several technology vendors and then contracted a consulting organisation to manage all of this, because no one player could meet their requirements. With the exception of a few very niche requirements, STC Business has almost everything under one roof. We structure the project, provide the technology in an integrated manner, including both telecom and IT requirements, and do the project and operations management, delivering services in a managed manner.”
With the telco becoming a one-stop-shop for the ICT needs of both SMEs and large enterprises, one cannot help but wonder about a possible negative impact of this change on the revenues of global ICT players. Dr. Enaya defers, saying: “Using the managed services approach in partnership with us, global ICT players can now offer a more integrated service from commissioning the project to operations support. In the past, they engaged customers on well defined but very limited levels, like supplying infrastructure projects. Over the past five years, they have shifted from delivering projects to real partnership models. They bring the technology and global insight, which we match to our IT and telecom engineering experience and local market insight.”
Since making a humble beginning with managed router service (MRS), STC’s managed service portfolio has come a long way, and now includes protection from distributed denial of service, otherwise simply known as DDoS; managed LAN; and managed information security. And given the dawn of the Internet of Everything (IoT) era and the pace at which connectivity demands are growing, management of all the connected devices is going to continually create a huge demand for managed services for several years till some technological breakthrough, perhaps in the field of artificial intelligence, simplifies the process of management.
In the light of the goals embodied in the Saudi Vision 2030, the reorganisation of STC’s services portfolio can only contribute positively to the digitisation of the Kingdom.
“For very rapid or exponential expansion and scalability, having ICT resources provided over the cloud and the associated professional services provided in a managed manner is the only real option since anything else will not only be more expensive, but may not be provided in an agile enough manner,” says Dr. Enaya. “For very large-scale nation-wide IoT projects, fast rollouts are nearly impossible without having the ICT infrastructure requirements addressed through the cloud and with managed services.”
Digitisation needs IoT, and at another level, IoT will actually push more digitisation. The demands will be generated from across various sectors. Implementation of ubiquitous smart technologies in any of the sectors would not be possible without digitisation and digitisation would have no real value in these circumstances without the IoT way of doing things.
Coming back to the core of all digital transformation – the cloud, the question that arises is where and how does the cloud fit into this overall journey of digitisation for the Kingdom?
Is cloud the right way?
Once a system is digitised it generates massive volumes of data. That data needs to be stored, analysed and have reports generated from it. Big data needs massive IT resources, which need to be online all the time. If anything goes wrong, the impact can ripple through the whole operation. One may try to solve this by building very expensive, very high specification systems, however those need to be upgraded, rebuilt or replaced every few years to match increased demand and usage.
The best alternative is to opt for the cloud. Cloud computing promises on demand, scalable, pay-as-you-go compute and storage capacity. Compared to an in-house datacentre, the cloud eliminates large upfront IT investments and lets businesses easily scale out infrastructure.
Elaborating further on how the cloud eases the scale-up process, Dr.Enaya says: “We tell all of our customers not to have any fears about failing with their digitisation experiences. What we want them to be afraid of is success. Once you digitise a service, if you have done it right, which is the case with most customers, the service becomes popular. This popularity stretches resources. If you are in the cloud, there is no problem. Expand your ICT resources to match this interest from your end- users and maintain it or decrease your resources once demand stabilises. While IoT ties the physical world to your digitisation process, the cloud is the enabler that makes it all have value.”
He adds that STC has no doubts regarding the importance of the cloud as a key cornerstone for digitisation and how that feeds into the transformation of the economy. “I believe that the government shares our view, as the National Information Centre is partnering with us on the Saudi Cloud Computing Company. This new company is focused on providing cloud services in compliance to the strict information security requirements of government agencies, especially those working in the security field. So yes, without the cloud, I am sure you will still have a digitisation process, but it would be under risk of not being able to address its own success in a timely manner or seasonal traffic and resource spikes.”
Digitisation or safety or both?
From a technical perspective, the cloud is simply a virtualised environment distributed across several locations. Yes, the cloud has a lot of moving parts. But in the end it is an IT system and yes will have vulnerabilities. Considering that the majority of digitisation initiatives are government based, how does the cloud meet security requirements? Dr. Enaya says: “We have round the clock monitoring and intrusion protection systems in place. We augment our security operations centre with partnerships and cooperation with the biggest information security players in the world. We run out of network and inside network penetration attempts to see how secure we are on a continuous basis. We do all of this to make sure we are always vigilant and ready to address information security threats.” He adds that at the staffing level, the STC team is cautious and applies global best practices.
“Since our cloud was developed internally, an additional benefit we have is that we can handle everything internally and are not dependent on any third party for any day to day management or operation requirements like those related to information security. Furthermore, we expect our overall security operations to be even more enhanced as our partnership with the National Information Centre solidifies with the launch of the Saudi Cloud Computing Company.”
In the light of Vision 2030, STC's business unit will continue to expand its IoT, managed services, and cloud portfolios. It plans to address SMEs with more cloud-based services structured in a manner that allows them to expand their businesses. “At the national and public level, we will continue to support any digitisation activities the government seeks using our experience and insight, our relationships with international technology suppliers, and our ICT infrastructure,” Dr. Enaya says.