June 6, 2012
Message from the Founder - Q2 2012

A few weeks ago, an old college friend sent me an article from the Wall Street Journal about how the Internet has fallen short of its potential in the Middle East.

As I read the piece, I shared the author's enthusiasm for what is happening in the Internet industry overseas. He and I both believe that there is a tremendous amount of untapped potential here in the Middle East's e-commerce, digital media, and enterprise communication markets.

I would further argue that 2012 is the year we'll see the tectonic shifts in the Middle East's internet industry needed to overcome the obstacles preventing mass adoption of internet-based services. These obstacles include overpriced local access bandwidth, minimal online payment capabilities, and expensive and/or unreliable regional shipping methods.

There are a number of reasons why I think we'll see these shifts this year. One reason is that unlike the European and North American marketplace where internet based services were available after the growth in bandwidth to the end-user, the Middle East's demand for higher bandwidth exists because of the current mission-critical or high-demand internet applications available today such as cloud computing, video streaming, video conferencing and virtualization. The presence of these services and the demand for higher bandwidth clearly justifies greater mass market adoption this year.

Another reason the shift will come this year is that the the pricing in the Middle East internet industry has fallen drastically behind other countries. Currently in the Middle East, the three largest IP markets charge exponentially higher rates for Internet speeds that are far slower than other global markets.

In order for the Middle East to truly enter the global business market, the region's ISPs must heed the call of the demand and be more competitive on their retail pricing.

Shortly after Ramadan this year, regional telecom companies will take the action on what they've long realized: in order to increase their data revenue, they need to make a leap of faith and significantly decrease the consumer cost of Internet access—which will in turn yield profits at a multiplying rate, far beyond their expectations. Telcos are being squeezed to find new revenue growth areas, and data consumption is still a shining star in their balance sheets.

Moreover—and perhaps stemming from their own self-interest—regional telcos will recognize that lowering their data rates will permit them to upsell value-added services riding over their networks, including IPTV and Private OTT, managed services, and collaboration services like telepresence.

In addition to the impact that this Wall Street Journal article had on me, two events last month confirmed for me that the rising tide of demand in the Middle East will bring about change this year—a speech I gave at an MBA class in Riyadh, and the feedback our enterprise sales manager received from a financial technology summit in Dubai.

Speaking at Prince Sultan University

In early April, I was asked to speak to an MBA class at Riyadh's Prince Sultan University, to discuss how online video can enhance a business' reputation. My speech focused on the applicability of online video across a number of sectors and was based largely on this Brightcove presentation.

I was pleasantly surprised by the students' receptiveness and enthusiasm for online video, and by how many of them were already embracing the medium as a strategy for customer acquisition and retention. I was also impressed by their advanced lines of questioning and sharp thought processes.

This class impressed upon me that the Middle East is not only rapidly embracing new media across different segments, but also that, in the next few years, there will be a large number of well-educated business leaders entering the workforce from within the region not importing them from the West as we've seen in the past . These two converging factors are poised to deliver great winds of change for the region.

Regional CIOs prepare for DDoS attacks

Our enterprise Sales Manager recently attended an invitation-only financial summit in Abu Dhabi for regional CIOs, and was astounded at the high priority DDoS prevention placed on the 2012 CIO priority list.

This new form of financial theft, corporate espionage, and political warfare is conducted through sophisticated online security attacks. Banks, stock exchanges, and ministries throughout the region have quietly felt the wrath of this advanced, massive scale of attacks brought on by hundreds of thousands of bot-nets. These cyber-criminals have discovered that the financial institutions of the Middle East are highly exposed, and the CIOs at the summit echoed the sentiment that the Internet in the region has fallen short of its potential.

Connectivityis not enough. A managed security service is needed to supplement either IPVPN or simple connectivity. Risk assessments from the financial summit all ranked online security among their top priorities, supporting this rising tide that will fundamentally change the Internet in the Middle East.

At The Apex Group, we're committed to providing Middle Eastern companies like yours with more choices, more power, and more ways to expand your online presence. Explore our wide array of web-enabled services and let our professional team help you benefit from leveraging the power of the Internet.


Alex Giannikoulis
Founder & CEO
The Apex Group
Office: +1 773 782 6581

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