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In its recently concluded virtual panel titled “Cloud and Data Center Shaping the Digital Economy” and co-sponsored by AWS and inwi, Telecom Review, the Middle East’s leading ICT media platform, gathered top industry experts to further explore this topic in depth.

The esteemed speakers’ lineup included: Bernard Najm, Vice President Telco MEA, AWS; Nicolas Gresser, Head of Public Policy, Middle East and Africa, AWS; Ouassim El Arroussi, B2B Marketing Director, inwi; Stelios Savvides, CTIO, Vodafone Oman; and Mounir Ladki, President and CTO, Mycom OSI.

Kick starting the virtual event, Tamer Bdran, Managing Director, NEC GCC and Vice president ICT Solutions, Middle East, who was the moderator of the session, welcomed the speakers and participants, and gave an overview of the topic at hand.

Telcos as “Innovators”

First, Bdran addressed how cloud and data centers would benefit the future of the digital economy, particularly in the Middle East and Africa (MEA) territory.

Looking at MEA’s macro-economic background, Najm saw the significant impact of the pandemic’s aftermath. For this reason, accelerated changes in the supply chain, market dynamics and geopolitical disruption were all evident.  As a result, market participants, such as telecom operators, now require agility in fulfilling their new and important role of enabling innovation capabilities. As a global phenomenon, the majority of CSPs who have embarked on the journey of being innovators started their cloud adoption to drive enterprise IT transformation, which further leads them to cloudify their networks.

DISH, Telenor and Telefonica are some of the AWS clients based in North America and Europe cited by Najm who have utilized their 5G core via the AWS Cloud. Verizon, Telia and Vodafone have also monetized their investments faster and positioned themselves as thought leaders and innovators with their customers, especially enterprises.

“At AWS, we strongly believe that this trend that we have seen in other regions will apply to the Middle East and Africa region as well,” said Najm. CSPs are now in a position to plan their cloud adoption by learning from the experience of others and accelerating their own journey. “In my view, CSPs are at a critical point in time to decide whether they take the role as leader/enabler/catalyzer or be a follower,” he added.

This is a rather convincing scenario proving the cloud as an essential factor to gain competitive advantage and increase relevance with their customers’ success.

MEA operators can take the top-down approach of early adopters and recognize that speed is of the essence while they work very closely with regulators to allow the adoption of innovation capabilities and enable new services for customers.

In parallel, CSPs can also support incubating and establishing a developer community. “This is why AWS is looking to work closely with CSPs to enable this journey, create the go-to-market partnerships and invest in education, training, culture and skill sets,” furthered Najm.

Cloud Has Huge Business Benefits

Cloud is the key enabler of the digital economy, Najm highlighted. Enterprises, as well as entrepreneurs, can have access to a platform where they can focus on creating value, without having to worry about the underlying infrastructure. 

Enterprises can innovate by consuming on-demand infrastructure using CI/CD methodologies as well as iterate over business models and launch their products fast – giving them more time to focus on their core competence.

In having the ability to scale and achieve global success, from Arroussi’s point of view, the cloud empowers enterprise verticals to transform. The amount of resilience from all sizes of enterprises has emerged due to the pandemic, allowing them to shift very quickly to digital channels.

The ability to go from the idea to the implementation stage is swift, as witnessed greatly in activities like retail. In e-commerce, Amazon is probably the best example with AWS being built to help the brand optimize and innovate at scale.

Cost scalability, causing faster time-to-market (TTM), is another benefit for customers. “Capital is not an obstacle anymore, which allowed businesses, even the smaller ones, to build their business models without waiting to meet specific investments,” Arroussi explained.

In terms of sustainability, Najm provided that cloud operations have very low carbon emissions and higher energy efficiency, compared to any traditional data center. 

Different Verticals on the Cloud

By and large, Najm articulated that there is “no one killer application.” Instead, there are going to be a lot of smaller ones that will fill the demand and needs of the end users.

Among the verticals that inwi have worked on during the pandemic was the public sector, which is responsible for ensuring service continuity. These include efforts in the externalization of data centers, utilization of hybrid cloud and implementation of backup-as-a-service or disaster recovery architecture.

The tourism and hospitality sector is also an important customer because, during the peak of the crisis, they had to use IaaS or SaaS to be able to relaunch and get back to the market quickly. Arroussi mentioned that a lot of shifts are also happening in the mining industry as its industrial side moves to the cloud.

“When our customers go to the cloud to improve their omnichannel strategy or user experience, they are moving the competition bubble to something more beneficial than the price. They are competing on the experience of innovation and the cloud is enabling this move,” Arroussi pointed out.

Based on a hyperscaler perspective, Najm enunciated that each vertical truly has a range of options for the cloud to play a major role in — from general to specific. As an example, in the pharmaceutical scene, Novartis condensed 39 years of computational chemistry into nine hours through an AWS-powered platform. Having said that, efficiency and productivity in the cloud remain really high.

In flydubai’s case, they have significantly improved their TTM and the ability to handle seasonal fluctuation. Since moving to the cloud with AWS, the airline operator has been able to spin up and down its capacity seamlessly, without any planning.

Within the manufacturing sector, AWS and Verizon have partnered to combine 5G and cloud in optimizing supply chain logistics and boosting workers’ safety at Corning’s plant. For the oil and gas industry, the energy robotics use case has been showcased by AWS during ADIPEC 2021.

Najm also underscored that AWS has forged its way into the world of sports entertainment and finance, with Formula 1 and NASDAQ as distinct customers.

Telco Needs AI and Cloud for Automation

Additionally, sharing his view as a service provider, Ladki emphasized how the cloud provides the economics for the massive storage and computing power necessary in today’s data-intensive era. At the expense of efficiency, he stressed the significance of unifying the tech stack, especially when delivering solutions in many environments while having different databases.

“Unifying your tech stack and then offering a service to your customers becomes really the right model that achieves efficiencies and benefits for both,” Ladki expressed.

Taking this into consideration, the telco industry needs to move to a mindset of real-time on-demand operations. With the inconsistent and emerging demands for 5G network slicing or private mobile networks, AI must be integrated for telcos to be highly automated.

Automation needs to be driven by AI, Ladki asserted, and it requires a massive amount of training, with a minimum of two years’ worth of data. After which, you can select the best algorithms that can deliver at least 20% of good accuracy in forecasting models.

For telcos, each KPI needs an AI model to be trained, which is a very complex and resource-hungry process. “This is where the cloud plays a big role. People have to think of the cloud, not only for workload migration or CAPEX efficiencies; this is only part of the equation. You are also getting access to a platform for innovation, allowing you to profitably execute AI and automate your operations at scale,” Ladki expounded.

As a whole, the value creation chain for telcos involves solutions providers that bring domain expertise and automation solutions while hyperscalers convey their hybrid cloud capabilities to empower a platform for training AI models.

Cloud-based 5G and Edge Innovations: Which Use Cases are Most Relevant for MEA?

In this regard, Savvides said that customers and operators have a lot of hope and expectation from 5G. He said that from a consumer point of view, the expectation is of a better service, higher throughput, lower latency and more capacity. “With 5G we can offer data to our customers in a much more efficient way. We're seeing 10 to 20% of handsets in the market that is 5G capable, so we're seeing that improvement in terms of RoI.” From the enterprise perspective, he said that several industries need to have dedicated deployments to run machinery in a controlled environment requiring low latency such as monitoring and automation, requiring private networks for efficient control of data and sensitive information security.

“We are trying to change how we deploy things in a smarter way for the interoperability between private networks and mobile edge computing. We need cloud farms for growth and scalability given the increase in data traffic with 5G. Deploying private cloud is not sustainable,” he opined.

Putting his thoughts across, El Arroussi said, “To put it broadly, we are just considering 5G investments as of now. And from the B2C side, we are more in the continuity of 4G use cases whereby we're not forecasting a huge change in the use cases. However, from a B2B perspective, I think that combining the low latency capabilities 5G network with edge computing can be very beneficial to address specific demands. He said that inwi is adequately addressing the data security concerns of their customers in various verticals with a value proposition of 5G and edge computing.”

Najm, cited an example of the 5G, edge computing and cloud uses in manufacturing. “5G connectivity capabilities combined with the cloud can optimize the production line, supply chain, logistics, the safety of workers, and data analysis. We are working with network operators in various verticals, including oil and gas to provide both private and public cloud services. Other than that AWS is actively participating with verticals such as entertainment, sports, and gaming to provide the ultimate digital user experiences.”

Ladki said that the storage and computational power that is required to achieve the outcomes in 5G is just massive. “Operating in the cloud provides you with the economics and time to market to do that. Unifying your tech stack and offering the services to customers is the right model that achieves benefits to both service providers and consumers.” He pointed out that with 5G, the telco industry needs to “move to a mindset of real-time, on-demand operations”, as peaks of demand would come in real-time from end-users. “Cloud is the platform for innovation that enables technologies such as AI to automate operations at scale and every stakeholder in the telco industry can focus on that know-how,” he stressed. “Solutions providers like Mycom OSI can bring the domain expertise and automation solutions to the table along with hyperscaler partners like AWS who can provide the telco capability and training model platform like the Amazon SageMaker to develop the value creation chain,” he said.

Obstacles to Cloud Adoption at Pace and at Scale

Ladki also shared a list of some obstacles that might hinder cloud adoption. According to him, handling the complexity of the network and data volumes is a major obstacle. To respond to this, a company should transform into a SaaS model and offer their customers the same solutions but with enhanced capabilities directly from the cloud.

Time-to-market is yet another obstacle as it takes about 6 months to deploy a solution, to procure the hardware to put it in the data center, to have all the IT around it and then start the deployment. “When using the SaaS transformation, we can cut the time from months to hours,” elaborated Ladki.

Furthermore, one cannot miss the obstacle of security: how can one make sure that the data is secured within one’s environment and how can one ensure that the data is secured in the public cloud. Telcos have many concerns about this subject, as the cloud is the core of the network and having the data in it is very sensitive. As per Ladki, Mycom in partnership with AWS havey proved that security is maintained, if not enhanced, in the public cloud.

Regulations and Policies

One of the topics discussed during the panel was data regulation. Nicolas Gresser, Head of Public Policy, Middle East and Africa at Amazon Web Services identified two main trends of data privacy and regulation in the Middle East and Africa.

He explained how the MEA region is following the footsteps of the European Union with data privacy laws that follow the GDPR standard. According to him, “this is driving some degree of harmonization between countries, which can enable data flow between countries, however, this privacy framework remains very heterogeneous and fragmented so data is not flowing between countries as it should.”

“It is not surprising as it took Europe 50 years to achieve a privacy framework, whereas the MEA region is trying to establish it in a very short period of 10 years”, he added.

The second trend is about how telecom regulators are broadening their jurisdiction from telecom to cloud and imposing on cloud service providers to get the registration or license that came with obligations.

Nicolas Gresser also tackled the issue of data localization. “In some countries, localization requirements are emerging in the form of either specific regulations as is the case of the UAE which has an IoT policy that mandates localization of data for IoT services, or in the form of security controls imposed by security agencies.”

Data regulation has gained momentum in the digital era given its important role in the process of digital transformation.

Gresser emphasized that “embarking on a digital transformation journey requires some visibility on the regulatory scene of the region. The role of regulators has shifted from traditionally solely handling the regulations part to accelerating digital transformation in order to further develop the ICT and telecoms sector.” According to him, regulatory frameworks in the MEA region can be outdated in some cases, which can hinder digital transformation.

The solution is to build future-proof risk-based regulations and avoid the mistake of sorting all types of data in the same place, because there are different types of data that present different levels of risks that should be managed differently.

“A three-way discussion between hyperscalers, telecom operators, and the regulator is the best approach and a regulatory sandbox is a good vehicle for it,” he concluded.