Sunday, February 23, 2014

Dynamics AX Rainier and Egypt Market - Great Expectations

Many of us already have heard that Microsoft Next Dynamics AX major release 7.0 (AKA Rainier) which is expected to be released on 2015 will be a cloud based Application, which means it will : a. Cloud Based Solutions and b. Platform independence - Browser enabled clients (https://community.dynamics.com/ax/b/valueindynamicsax/archive/2013/08/14/some-info-on-microsoft-dynamics-ax-2014-2015-next-major-release-codenamed-quot-rainier-quot-or-quot-rainer.aspx)

But the question is will this release will make a difference in Egyptian market? Because as cloud computing mandate to have a strong internet backbone which is not available all the time with a reasonable price.  Although Microsoft has already addressed that question by providing different deployment model on premise or Public could, or private cloud

But me as most of IT people are more interested about hearing its suitability/fitting of the cloud offering model of Rainier to Egypt market for many reasons:
·        Cloud means reducing the total cost of ownership TC as the companies will do more saving with this model by not spending more on hardware and software purchases (Server, TS, Citrix, VPN, RAC and backup system…etc) and ofcourse reduce the cost of hiring and retaining highly IT skilled labor .

The question is a not just a simple one to be easily answered, but let's explore the different factors that might give us a hint about fitting of the cloud model in Egypt Market by examining the obstacles:

First the Internet backbone itself in term of cost and speed: (I'll copy and paste some numbers with my comments on them)
o   Many of us might not have heard about Egypt National Broadband Plan or 'eMisr' initiative (http://www.ntra.gov.eg/emisr)
o   The initiate mainly is based on a World Bank study of the spread of the broadband:
·   % increase in BB penetration and its correlation on the average % increase in GDP.
·   Job creation
·   Impact on intermediary sectors
·   Social impact and consumer welfare.
o   eMisr initiative has set some goals:
·   Goal 1: 75% of Egyptian households have access to broadband services with a minimum speed of 2 Mbps by 2015
·   Goal 2: 90% of Egyptian households have access to broadband services with a minimum speed of 25 Mbps by 2021
·   Goal 3: 98% of the population to be covered by 3G by 2015
·   Goal 4: 90% of the population to be covered by 4G (LTE and beyond) by 2021.

Hence, based on the above targets and the above illustrated assumptions, the estimated investment ranges from EGP 14.4 billion to 23.6 billion (USD 2.40 billion to 3.95 billion) over four years. This investment requires an additional EGP 2.1 billion (USD 350 million) to incorporate the demand stimulation investment needed to boost up the demand to the levels aimed at in the penetration targets.

Based on that a one percent increase in broadband penetration added 0.121% to the GDP growth of medium to high income countries; and 0.138% to the GDP growth of developing countries. Using this method, the cumulative contribution from 2011-2015 to GDP is EGP 24.9 billion (USD 4.17 billion). Relative to the initial year GDP (2011), broadband increases
GDP by 1.8%.

The earlier analysis concluded that employment multipliers were in the range of 35-50 (jobs per year for each USD 1 million in infrastructure investment) the scenarios adopted project total investment in the range of USD 1.9 ~ 3.5 billion Application of this approach suggests that the broadband plan will result in
Between 6,650 to 17,500 direct jobs annually, being sustained on average. Ofcourse this will have a positive effect on the increase of the potential user for cloud software and in particular Microsoft cloud based application.

To guarantee the success of this initiative, a two main requirements are needed:
·        Laws and legislation: Here I can say the 2014 or (2013) Egypt constitution has preserved this and penalized the internet cutoff incidents.
·        Government investments: as I recall Dr. Hesham Kandel the prior PM has claimed to invest 3 billion EGP, also the current government of Dr. Hazim Biblawyhas increased the amount of investment in the broadband project up to 5 B EGP.

The Second factor: Cloud service provider and is Egypt Market ready for it?
·        There was a published study about the expectation of the cloud adoption/sales worldwide (http://news.investors.com/technology-click/021414-690137-amzn-goog-msft-battling-for-growing-cloud-market.htm) and if we can correlate it to the it to the  IT spending in Egypt which was projected to reach highs of US$1.9 billion by 2013, reflecting a significant jump from its 2008 levels at US$1.2 billion, according to statistics released by Business Monitor International (BMI) in its ‘Egypt Information Technology Report third quarter 2009’. This mean the cloud computing will have a big room for that spending in Egypt market.
·        Also, I can recall here Mr. Craig Mundie, Chief Research and Strategy Officer (CTO) of Microsoft Corp. and his meeting with the prior PM. Dr. Nazif and the ministyr of the communication and technology information ministry Dr. Tarek Kamel (in 2010, before 25 January revolution) and the discussion with Carig during his 3rd visit to Egypt the establishment of a new Cloud Computing Center in Egypt, which is likely to turn Egypt into a regional hub in this domain. (http://www.mcit.gov.eg/Media_Center/Press_Room/Press_Releases/1678)

The third factor: the measurement of the currently available cloud based software sales growth such as Office 365, dynamics CRM online:
All the indicators was positive and shows not just steady growth but also booming sales rates, which is a very good positive indicates that indicated that the Egyptian market is ready for cloud based software such as Dynamics AX Rainier


Yes all of these plans suffered from delay due to the political and security condition but the thing that it's on the track moving slowly in some aspects but moving faster in the other


I hope I've given an small insight about my personal prediction about AX future in Egypt

Please if you've any comments or even correction you would like to share, please send it to my email m_anass@outlook.com


Mahmoud Anass