The transformation of digital economies in the Middle East and globally is opening up a variety of opportunities for ICT players. CSPs need to address the digital transformation challenges with a combination of strategic partnerships as well as powerful tools built to deliver the features required to embrace digitalization in an integrated manner. Whether it is telecommunication services, cloud, and security solutions, hyperscale data centers, manufacturing technology-based solutions, and systems integration, telecom companies are progressively finding ways to better their positions in the market.
Over the next 5 years, all growth in traditional tech spending will be driven primarily by four platforms – cloud, mobile, social, and big data/analytics. Cost savings generated by cloud and automation will see more spending diverted towards new technologies such as AI, robotics, AR/VR, and blockchain. Next-gen security related to new technologies will also continue to drive significant growth.
More and more businesses are going the cloud-native way and there is much momentum for rapid adoption of new technologies which deliver rapid return on investment for targeted industrial use cases such as the deployment of IoT and robotics solutions by manufacturing firms in regions such as China and the rest of Asia. In the Middle East, governments are driving investment in new technologies, leading aggressive smart city initiatives and integrating ICT with economic planning.
Moreover, as a strategy to navigate through disruptions such as geopolitics or virus outbreaks, CIOs are accelerating IT investments as they have understood the importance of flexibility and agility in responding to disruptions during the COVID19 pandemic. Global ICT spending reached about $4.9 trillion in 2020 and is expected to grow to $5.8 trillion by 2023. Worldwide IT spending is projected to total $4.4 trillion in 2022, an increase of 4% from 2021. The latest Gartner forecast reports that in the MENA alone, IT spending is expected to hit $169 billion in 2022, with communication services expected to attract a big chunk of the spending at around $110 billion. Datacenter systems spending is expected to touch $4 billion while devices will approach $19 billion, IT services will top $16 billion, and spending on software will be close to $10 billion.
In due course, businesses are likely to grow their share of technologies such as IoT, robots/drones, AR/VR headsets as traditional and new technologies begin to exist together. Cloud and mobile technologies enable rapid deployment and connectivity whilst cutting costs and complexity in legacy operations which allows businesses to focus on new digital innovation. Analytics, blockchain, social, and AI represent traditional IT software applications that leverage new technologies into tangible economic benefits.
In light of these developments, CSPs need to be the platforms for innovation. From their advantageous standing as connectivity providers with extensive networks, they have to leverage the cloud-native architecture and new technologies for building a new service with the development of minimal viable product (MVP) that can be scaled up at half the cost and effort of how new third-party services were traditionally rolled out on 4G.
As such, with the eventual rollout of standalone 5G deployments, an agile BSS can leverage a plethora of new functions and network attributes for the enterprise digital ecosystem. Packaging of network functions such as policy, real-time convergent charging, and service catalogues connect 5G business and IT functions and analytics within the 5G network, making it much easier to interoperate toward the monetization of the network. Network and IT teams will need to work diligently as policy and charging become closely integrated with core network functions, as 5G can enable policy to be positioned at the heart of 5G monetization. This enables CSPs to adapt the network for individual services, allowing the different network characteristics such as ultra-low latency; high bandwidth; and network slicing use cases to have different pricing, charging rules, and service level agreements.
According to Gartner, by 2026, 60% of large enterprises will use Total Experience (TX) – a strategy that creates superior shared experiences by interlinking the user experience (UX), customer experience (CX), multi-experience (MX), and employee experience (EX) disciplines to transform their business models to achieve world-class customer and employee advocacy levels.
All the developing and emerging markets in the Middle East have already started preparing for the digital economy in some form or the other. Forging strategic partnerships with key cloud services players such as Google, Amazon and Microsoft has been on the agenda of governments in most countries. CSPs should focus on the 5G network capabilities of Network exposure function (NEF) to ensure secure, developer-friendly access to exposed network services and network data and analytics function (NWDAF) for a higher level of intelligence that makes networks smarter through real-time data management and analysis. Armed with such depth of insight, CSPs can find themselves in a leading position when it comes to tapping further opportunities for monetization and making a proposition on quality of service (QoS) in their portfolio offerings.
