ALKHOBAR, 13 January 2004 — Cost. When selecting information and communication technologies (ICT) the final choice is usually made in part based on cost issues. Sometimes this is the outright price of the technology to be purchased. But more often, companies should consider the Total Cost of Ownership (TCO) before they buy any product or solution.
To have a choice is a wonderful thing. Sadly, in the Kingdom in some areas of ICT, options are generally not available. Take mobile communications for example. In this communications segment there is no choice. Saudi Telecom Company (STC) is the one and only provider. If a company is a monopoly but they are doing an excellent job, there is usually little complaint. However, when a monopoly clearly has serious issues with the customers they are supposed to be serving, then it is time for a higher national authority to intervene.
Back in November, the independent analysts, the Arab Advisers Group released a report titled “Cellular Rates in the Arab World: A Regional Comparison.” The report was based on extensive research and analysis of 22 of the region’s mobile operators in 14 countries. In the report, the Arab Advisers Group concluded that Kuwait’s GSM market leads the Arab world in relatively low cost rates which were induced by the introduction of competition to the market. The report compared rates, including, connection (prepaid and postpaid), per minute billing (prepaid, postpaid, peak and off-peak), SMS and MMS, prepaid card validity and handset subsidies.
According to the report, Wataniya Telecom, a mobile operator in Kuwait, has been selected as one of the operators offering the most competitive GSM rates in the region. Wataniya Telecom has launched an aggressive regional expansion program and it has committed to continuing its drive to bring competition and value-driven GSM services that are appropriate and accessible to its customers.
“The Kuwaiti GSM market provides a great case study for the positive effects of the introduction of competition to a GSM market, which has now been validated by the Arab Advisers Group’s findings,” said Faisal Al-Ayyar, chairman, Wataniya Telecom. “Competition has brought a huge jump in the penetration rate, as well as giving customers better value and more extensive services. We are hoping to replicate the success that we have had in Kuwait throughout the other countries we have been awarded licenses to operate in.”
Launched in December 1999, and with a market capitalization exceeding $3.4 billion, Wataniya Telecom, a member of the KIPCO Holding Group, has been a driving force in increasing the mobile communications market penetration in Kuwait to over 60 percent of the population. With over 780,000 subscribers in Kuwait, 490,000 in Tunisia, and 70,000 in Iraq, Wataniya Telecom has built its success on a customer focused strategy. In December, the company was awarded the third GSM license for Algeria.
“Wataniya Telecom first brought competition to the Kuwaiti market four years ago and we’re now driving it regionally, based on our experience of building leadership through offering people better value and the products that they want and need,” said David Murray, CEO, Wataniya Telecom. “We’re building rich services, innovating new ways for people to use mobile communications and ensuring that we do so with value always at the top of our minds.”
Wataniya Telecom received high ratings in the Arab Adviser’s report. Unfortunately, for Saudi Arabia’s telecom users, in the mobile communications report the word “high” better described some of STC’s rates. In the Middle East, the Arab Advisers found that only Lebanon and Morocco had higher rates for prepaid per-minute mobile services. Off peak pre-paid, STC had the second highest rates in the region and also the second highest rates for prepaid SMS. This is despite the fact that Saudi Arabia has 20.7 percent of the regional GSM subscriber share and that in August 2003 STC had a half year profit of $757 million. (Saudi prepaid users may be feeling chest pains at this moment. Please breathe deeply and repeatedly recite, “Second Saudi mobile license bid 2004,” until the discomfort recedes.)
Thankfully, in other areas of ICT there is a choice. In Riyadh this week a large attendance is expected at the Saudi Computer Society’s Open Source Forum and Workshop. Comparisons are sure to be made between Microsoft and Linux. There is no doubt that open source has a place in the IT spectrum. Exactly what that place is, is something that Microsoft is asking people to consider rationally.
“We want customers to make informed decisions on what direction they want to go, on which platform to choose,” said Mazen Abu Saleh, product marketing manager (servers), Microsoft Arabia. “It’s not about passion. It’s not about belief. It’s about business. So we want customers to make decisions based on that. We are not against open source as a concept. I can give you examples of some .Net open source projects. Microsoft is a commercial company, but we have developer communities that do open source projects on .Net. We support the open source community but Microsoft believes that open source as a concept is developer oriented, not customer oriented.”
Abu Saleh put forth many independent studies that compare the TCO of commercial platforms vs. open source platforms. He pointed out that many business people consider just the cost of licensing software, rather than TCO. It would be impossible to reproduce the studies in any meaningful way in such a small space as this column. If you’re interested in reading about the subject click to msgetthefacts.com or veritest.com. There are also reports on the topic done by companies such as Giga Research, IDC and MICE Economic Research. If you don’t find what you’re looking for drop a note to [email protected].
The true cost of a platform includes many factors and security is one. Microsoft has received the message loud and clear that customers are fed up with the security issues that have plagued MS software. Abu Saleh acknowledged that poor security increases the total cost of software ownership and diminishes customer satisfaction. Consequently, Microsoft is moving aggressively forward on a decade long initiative to increase effort and investment in terms of money and people in the area of security.
“Security is an industry-wide problem,” Abu Saleh explained. “It is not something specific to open source or commercial operating systems. The thing about commercial software though is that take Microsoft for instance, we have somebody behind our software, investing time and money in security issues. In open source, who is driving the issue? In open source, will you be confident in the patch created to solve some sort of vulnerability? Who created that patch? How has it been tested? With open source, what procedure has been put forward for patch management? Often with open source there’s no way to know.”
“There is a perception though that open source is more secure than the commercial software,” Abu Saleh added. “But the data does not support this. In Windows 2000 in the first 150 days we had 17 critical vulnerabilities. In Windows 2003 in the first 150 days, we had four critical vulnerabilities. We are not proud of that. We still have to work harder. But look at Red Hat for example. Red Hat, in their first 150 days, had five to 10 times the number of vulnerabilities that we had in Windows 2003.”
This year Microsoft plans to train 500,000 people worldwide on how to run IT environments in a more secure fashion. In Saudi Arabia over the coming six months MS Arabia has plans to train 1,000 IT professionals on this topic through seminars, one day summits, third party events and university visits. All these activities come at a cost of course — although such a cost must definitely be considered an investment, rather than an expense.
(Comments to: [email protected])