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New segmentation methods are needed for new ICT services. Smaller enterprises must be the priority. Empowered with cloud-based services, small enterprises can contribute more to African economic growth than large enterprises.
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Segmenting Africa’s enterprise opportunity
Camille Mendler Africacom
Principal Analyst Cape Town
Informa Telecoms & Media November 13, 2012
Segmentation: It’s been a counting game
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Enterprises
Employees
Locations
Turnover
DevicesIndustries
Simplistic segmentation methods have suited telecom’s linear products.
3
Expanded ICT portfolios demand better segmentation methods.
Vertical biz apps
General biz apps
Storage / backup
Security
Unified communications
Broadband
Voice
Conn
ectiv
ity
But there’s a bigger target to hit nowProductivity
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Services from…
4
Enterprises
Integrators
Colos / hosters
Web
ISPsTelcos
SoftwareHardware
Devices
Governments Cloud vending machine
*by business origin
ICT market players are legion and diverse
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Many new services are on offer
Mobile device management
Unified communications
Data storage
Business applications
Managed security
0% 10% 20% 30% 40% 50% 60% 70% 80%
53%
50%
59%
68%
53%
49%
62%
68%
74%
68%
53%
71%
71%
71%
76%
Most important cloud services for Africa?
African enterprises
African CSPs
African ICT suppliers
Source: Informa Africa Industry Outlook survey, Nov. 2012
Africa’s ICT stakeholders must be aligned.
It’s time to value workforce context, not size
Typical size groups
Job & industry Business processes
Workplace Legal formation
Blue collar White collar Mobility Location
Micro<10
Artisan
Plumber
Electrician
Courier
Bodyguard
Bus driver
Restaurant
Shop owner
Builder
Policeman
Accountant
Consultant
Doctor
Dentist
Realtor
Lawyer
Salesperson
School
administrator
CEO
Transactional
Mobile /
nomadic
Single
Registered
(formal)Small10-49 Collaborative Multiple
Medium50-250
Knowledge centric
Office / fixed
National Unregistered (informal)Large /
multinational International
Source: Informa Telecoms & Media
Size matters – but how and where employees work is increasingly relevant to determine total addressable market for ICT services.
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Employment population Employment population
Developed economy Emerging economy
Com
pany
siz
e
LARGE
MEDIUM
SMALL
MICRO
Small is beautiful in Africa’s enterprise market
SMMEs must be the no. 1 priority. Empowered with ICT, SMMEs will contribute more to African economies than large, multinational enterprises.
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7
SMMEs have diverse needs
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But don’t treat SMMEs as a single segment – identify the ‘mass’ verticals.
Horizontal
Departmental
Vertical
Sour
ce: I
nfor
ma
Tele
com
s & M
edia
For industry-specific needs• Mobile POS for Retailers• Time reporting for Lawyers• Appointment scheduling for Doctors• Fleet tracking for Logistics
For specific functions• Tracking employee time and location• Logging sales leads and orders• Managing permanent and casual staff• Launching marketing campaigns
For most employees• Document creation and management• Data storage and backup• Conferencing and collaboration• Security (PC and mobile devices)
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A new ‘Big Mac Index’ for the Cloud
16/10/12
Beware: generic, commodity SaaS offers limited differentiation.
Beeline (Russia)$6.63
Microsoft Office365 P1 plan*
Vodafone (Turkey)$6.37
PT (Portugal)$6.08
Microsoft (direct)$6.00
TDC (Denmark)$8.27
Telstra (Australia)$7.39
Swisscom (Switzerland)$7.16
Source: Informa Telecoms & Media, CSP@SaaS database*price per user per month, ex tax
Mass vertical example: Fleet management for Logistics firms
Business process improvement rather than cost savings is the key value emphasized for moving to the cloud.
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Source: Informa Telecoms & Media
Some targeting of mass verticals is appearing.
Logistics among South Africa’s top 5 verticals
MTN’s service targets SMMEs with fewer than 200 employees
Benefits• Cost reduction: simplifies processes• Efficiency: process is easy to use• Tracking: check progress of goods via Web and
mobile device• Technology: enables entire process to be done
electronically – no need for paperwork• Increased productivity: real-time reporting of
deliveries and transactions
Portfolios are still under construction
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SMME SaaS portfolios are under development globally.
Productivity & collaboration
Security & IT management
Operations management
HR & employee management
Marketing
Finance & accounting
Customer management
78%
67%
54%
41%
37%
37%
33%
46%
11%
13%
18%
8%
1%
3%
CSPs: Business SaaS portfolios – What’s offered?
World Africa
Percentage of CSPs with one or more live SaaS offers in this category. Base: 51 CSPs, 1028 SaaS offers.Source: Informa Telecoms & Media, CSP@SaaS Pricing Benchmark.
Deliver simplicity & value for money
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African enterprises large and small need more competition to drive down prices.
Public cloud services: Average effective cost per hour (US$)
*Public cloud services, pricing from CSPs and non-CSPs. Small instance configuration. Source: Informa Telecoms & Media, CSP@IaaS Pricing Benchmark. Interim results.
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
0.18
0.2
0.090
0.1110.123
0.136
0.160 0.1640.173
US
cent
s pe
r hou
r
13
For more information:
Camille MendlerPrincipal Analyst, Informa Telecoms & Media
[email protected]+44 7766 13 15 28
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