Saturation in the consumer telecommunications market is driving the convergence of IT and telecom services in most regions around the world, which, in turn, is creating new opportunities for business-to-business services. These opportunities have motivated telecom operators (telcos) across the Middle East to reinvent themselves by moving beyond the provision of basic voice and data services to begin offering IT services.
This makes perfect sense, given the Middle East’s continuing economic growth and the prospect of major international events such as the World Expo 2020 and the FIFA World Cup 2022 being hosted here. Such developments, combined with the increased economic diversification efforts of governments across the region, mean that the number of businesses is forecasted to increase considerably in the coming years, with the number of small and medium-sized businesses (SMBs) expected to grow the most.
The SMB segment is widely recognised as a key contributor to economic growth and development in the region. IDC’s own research suggests that SMBs account for about 46% of total IT spending by businesses in the Middle East, and SMBs outnumber their large and very large counterparts – enterprises – by a wide margin, usually employing a larger percentage of a nation’s workforce. And whether they have just one or 250 employees, they all require ICT solutions to maintain their operations and remain ahead of the game.
None of this has gone unnoticed by the region’s telcos. From establishing SMB-focused divisions and repackaging their existing connectivity services to creating all-in-one ICT solutions, they have been increasingly focusing on this burgeoning segment, which marks a considerable change from the strategies of previous years when most of the focus was on enterprises. But which solutions in particular are seeing the most demand?
Cloud services are proving increasingly popular with SMBs across the region, but telcos have an intense battle on their hands to secure share in this space. Indeed, service offerings such as computing, storage, disaster recovery, and business applications need to compete against those of international pure-play cloud providers that have huge data centres and are aggressively driving down service costs.
That said, regional telcos have some specific advantages. The fact that the data associated with cloud services will be stored within the country of origin and that sales support can be provided locally are important differentiators.
Furthermore, a symbiotic relationship exists between connectivity and cloud; improved and affordable connectivity can encourage cloud services adoption, while cloud services adoption will drive broadband data usage and bandwidth utilisation, enabling telcos to fund continued investments in infrastructure improvements.
But the provision of cloud services isn’t the only game in town; the need for improved productivity and increased efficiency, combined with the availability of enterprise apps for mobile devices, is driving demand for enterprise mobility among SMBs in the Middle East. Rising consumerisation and the emergence of bring-your-own-device policies in organisations is also supporting this trend.
Enterprise mobility has presented mobile services providers with the opportunity to create managed service offerings for mobile devices, including, but not limited to, mobile device management (MDM), mobile application management (MAM), mobile content management (MCM), and mobile security management. However, the key to success in this space will be to move beyond offering individual elements of enterprise mobility and leverage partnerships in order to offer SMBs the integrated enterprise mobility management solutions that they truly desire.
Traditional data centre services such as hosted applications and infrastructure are also finding relevance among the large contingent of medium-sized businesses that have not yet fully grown into the cloud delivery model. From hosting websites to hosting applications, traditional data centre services appeal to businesses that do not have the resources required to invest in their own data centre capacity. In many cases, progressive telcos are combining data centre solutions with their connectivity services to present a bundled package, a USP that potentially equips telcos with a significant competitive advantage when looking to do battle in this particular arena.
We are also seeing growing demand for managed connectivity solutions that enable SMBs to connect with employees, customers, and partners around the world, while unified communications and collaboration solutions are increasingly being incorporated into organisations’ business processes. Such solutions typically help businesses achieve cost savings, reduce travel risks, minimise latency, improve the customer experience, boost workforce productivity, and increase revenue, and they resonate particularly well with SMBs as they tend to have smaller budgets and operate in extremely competitive environments.
Ultimately, the opportunities are both broad and varied for telcos looking to exploit the sustained growth that will be seen in the Middle East’s SMB segment over the coming years. And while these are relatively early days, things are really beginning to heat up as a growing band of telcos focus on leveraging their existing infrastructures, skills, capabilities, vast customer bases, and brands in a bid to position themselves as the true service providers of choice for the region’s SMB community.