“Last mover’s advantage”: How the Middle East is developing a digital presence

Posted by: Michael Kogeler, COO and CMO for Microsoft Corporation in the Middle-East and Africa region (MEA)

The year 2015 is already moving as fast as its predecessor, and there are many new tech trends we must keep up with to remain competitive in a constantly changing world. However, before we become too caught up in the wave of another new year and all it has to offer, I wanted to take stock of the cloud and content consumption trends I’ve discussed over the past two years.

Last mover advantage

In 2013, I wrote about the Middle East being behind the curve in terms of cloud adoption and the potential ‘last mover’s advantage’ of being in this position, with scope for significant uptake. This has proved to be true, with the region seeing rapid adoption of broadband and smartphones, along with a greater demand for access to personal, business and entertainment content on any device. In addition, because cloud computing allows individuals and businesses to rent hardware, applications and virtual IT systems from cloud providers on a pay-per-use subscription basis, their technical capabilities are significantly increased, while costs remain low and scalability is possible. I share Microsoft’s belief that cloud computing has the greatest potential to transform competitiveness across private and public sectors, delivering greater access to IT, slashing costs and enabling more agile, innovative operating models.

 As a result of this growing interest in the cloud, and as cloud computing technology reaches saturation point in North America, for example, many global data storage and network specialists are beginning to look to the Middle East. This gives the region the benefit of playing in a tested and stable space. It allows for quick adoption as the discussion around the cloud has changed from ‘security’ and ‘privacy’ to ‘how to move’ and even how leapfrogging to a ‘cloud first’ model for all workloads can help drive growth and innovation. Cloud services will fuel economic transformation across the region, delivering cost-effective, flexible access to enterprise-class ICT and accelerating associated benefits of information access, storage, new ways of working and return on investment (ROI). At Microsoft we have worked to create a diverse network of partners in the Middle East and Africa. These partners develop, sell, deploy and support our cloud services and drive regional competitiveness. 

The Middle East can certainly teach the ‘first movers’ about innovation and end-consumer satisfaction. By leapfrogging legacy networking technologies and applying new techniques that developed markets are only just gearing up for, any business – big or small – can access the most up-to-date, externally managed IT resources. This allows them to consolidate their operations onto a single infrastructure, making it easier for customers to interact with them. We are also cognisant of the value of finding ways for these businesses to cut costs by reducing travel and energy consumption, increasing collaboration, optimising computers and making IT purchases accessible – and new business practices such as operating in the cloud can make this a reality.

Solution-focused innovation

For the region, innovation is also not always about developing the next shiny, new technology; it’s more about finding solutions to regional challenges. The Middle East represents a significant and enthusiastic consumer market, so the primary focus is to develop ways to reach and satisfy this market using technology. Because end-consumer satisfaction is so entrenched in businesses in the region, it would also come as little surprise that innovations to reach consumers could become globally competitive.

 In order for this to happen, the first step is to provide support for local entrepreneurs to grow in the Middle East. For example, Microsoft and some of our partners recently launched an entrepreneurship programme under the 4Afrika umbrella to support young Moroccan women in building their own SMEs. The Cloud Startup Academy offers a six-month entrepreneurship internship, during which candidates are trained on cloud and ICT topics and are taught skills such as sales, technology use, marketing and communication and start-up management, with the goal of becoming a Microsoft Cloud Partner.

And then there are the students who use technology to innovate in exciting new ways to contribute to Middle Eastern digital life. Students from Qatar and Bahrain were crowned winners of last year’s pan-Arab Imagine Cup, with projects called ‘I Copy You’ and ‘Butterfly’, respectively. Team ‘I Copy You’ won in the Citizenship category for its low-cost educational software designed to build communications skills in children with autism, while Team ‘Butterfly’ was the Innovation winner for its project that allows women to create their own nail polish mix. The region has fared well in the Imagine Cup in recent years, too, with Team ‘MASKed Ninjas’ from Egypt winning for their Windows 8/Windows phone app, which provides users with the most relevant video to accompany an article.

Starved for local content

However, there remains a huge appetite for digital content in the Arab world, which I first wrote about in April 2013. Boosting Arabic content online can certainly help diversify the economy and improve opportunities in the Middle East. That said, while the yearly growth rate of the Middle East’s online audience is 2500% - bringing the total number to 125-million and growing - and native Arabic speakers make up 4.5% of the global population, less than 3% of total global online content is in Arabic.

 Nevertheless, Arabic is the fastest-growing language on the Internet, fuelled in large part by the Middle East’s more than 60 million Facebook users, seven million Twitter users and some of the highest video download rates in the world. It is also interesting that 93% of the videos produced in the Middle East are in Arabic. In the past three years, there has been a proliferation of special interest blogs and a growing number of video blogs coming out of the Middle East. Simultaneously, the arrival of Arabic domain names is a major boost.

It is important to note that the use of Arabic on digital platforms in the Middle East is one of the reasons for the spread of mobile phones, which offer the main applications of voice and text messaging in the vernacular. Considering that more than half of the population do not speak English, and 60% prefer browsing internet content in Arabic, it makes sense to drive digital Arabic content. I’m encouraged by projects like Microsoft’s Afkar, which is working towards this.

This will be one of the big trends going into 2015, along with the more widespread adoption of cloud services among mainstream public and private organisations. The Middle East is an important region for Microsoft – we have worked in the region for 25 years. We will continue to invest for growth while being a strong partner to our customers, and we remain committed to the future of the region as it develops in these important areas.

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