Senior Software AG official discusses company’s operations in the region and future plans
Digital transformation investments in the Middle East, Turkiye , and Africa (META) are set to more than double across the 2021–2026 period, according to the latest forecast from International Data Corporation (IDC).
The research company states that digital transformation spending in the region will accelerate at a compound annual growth rate (CAGR) of 16 per cent over the five-year period, topping $74 billion in 2026 and accounting for 43.2 per cent of all ICT investments made that year.
Software AG, a global powerhouse, is at the forefront of creating solutions for enterprises to take their business forward and be dgital ready. A crtical part of the process is cloud adoption,which has witnessed paid progress in the past few years. The company has been increasing revenues by double digit annually over the past eight years.
Rami Kichli, senior vice-president, Middle East & Turkiye, Software AG, spoke to Khaleej Times on the company’s operations. Excerpts from the interview
The adoption of cloud is on an upward trajectory and will only continue to accelerate with cloud as an innovation catalyst. It has proven to derive insights from real-time data, enhance decision-making and capitalise on new opportunities, all to disrupt and differentiate with expedited innovation. Implementation of data sovereignty and security, however, remain unclear and uncovered in the cloud journey as large providers continue to set up presence and data centres within the national boundaries in the region.
Software-as-a-service solutions remain the largest segment of the cloud market by end-user spending. SaaS is projected to grow 17.9 per cent to total $198 billion in 2023, according to a recent Gartner report. As cloud becomes more operational in the region, the shift to SaaS and cloud offerings will also accelerate. At Software AG, we continue to witness heightened revenues from SaaS and we are constantly building new partnerships and agreements with global and local partners in order to further accelerate the shift to subscription and SaaS.
The overall market size of digital transformation is growing and contrary to the rest of the world as the region’s economy is performing very well – and this has stayed constant for many years now.
Within the total growing market, the digital transformation portion is growing at a faster pace than the total market growth itself – gradually and progressively occupying a bigger chunk of the pie. And the rationale for this from an overall market perspective is that increased budgets and funding are being diverted to ‘transformational’ and ‘innovation’ to improve business efficiencies by enterprise customers and gradually reducing spends on traditional IT.
Lastly, Software AG is highlighting and educating the importance of a hybrid digital transformation hub to customers – which consolidates devices and systems efficiently. This fits well with customer’s transformational requirements and objectives and has significantly contributed to an increase in our market share in the last 8 years; we are growing at a faster pace than our peers.
In the region, Software AG has been growing business and increasing revenues by double digit annually over the past eight years. We are projecting a 31 per cent growth by end this year and the size of our business to double within three years. We have a rapidly growing regional team with a 10 per cent growth in 2023 alone to support our customers across the public and private sectors.
Moreover, driven by strong customer demand for our complete and integrated portfolio of solutions worldwide, integration & API management, IoT & analytics and business transformation, where we create a fluid flow of data between people, departments, systems, and devices, we recently expanded our footprint in the region, opening our Egypt office.
Since we live in a connected world where people, devices and processes interconnect; at Software AG, we invest in innovation and build paths of success for our customers. The broad availability of software solutions in the cloud enables our customers to quickly implement new solutions and use cases and create incremental value. For example, our partnership with AiFlux, creator of intuitive technology platforms for the energy sector, is to drive innovative solutions through our Cumulocity IoT and Integration to focus on safe and productive management of heavy assets and resources deployed in harsh environments. We are also closely working with one of the region’s leading tourism departments to transform end-to-end tourism and build innovation based services to create 7-star experiences.
We continue to invest in our channel partner and SI programmes – constantly evolving, enhancing and revamping our channel business. Earlier this year, we launched a partner academy for our Middle East & Turkiye partners to expand training and skill development opportunities within our channel ecosystem. With over 50 partners already in the region, we continue inking agreements through well-defined structured yet flexible models to maximize overall market opportunity.
The recent setup of our nearshore center in Egypt has enabled us to scale our business, serving as a regional hub for Software AG’s digital transformation capabilities. Customers in the UAE, Saudi Arabia and the rest of GCC will have the opportunity to leverage our capabilities of this nearshore centre.
Governments in the region are at the forefront of embracing disruptive and emerging technologies, creating a stir and space for tech innovators and innovations.
The UAE is a global example of innovation, constantly driving ground-breaking initiatives to shape the future of the nation and redefine its position as a global and regional leader. We at Software AG work over 150 public sector entities in the region, with over 50 in the UAE alone. Our vision at Software AG is in line with the national goals to build smart, agile and resilient smart cities and a key attribute is building smart governments as cities look to offer smarter solutions for a sustainable life to citizens.
The country’s lead digital authorities – Abu Dhabi Digital Authority, G42 and Digital Dubai have been at the helm of UAE’s efforts to develop innovative digital futuristic models to advance operational frameworks by embracing advanced technologies to bolster the country’s international competitiveness. With a unified hub in place, the entities have the ability to launch new digital services and multiple customer journeys streamlined across federal and local government entities and the private sector too. The aim has been to build experiences to enrich citizen lifestyles and offer seamless and effective digital experiences in all areas of their lives.
Most enterprise customers and governments are in a state of planning or executing their transformation journey. This journey comes with many opportunities but is also not devoid of challenges. This is where Software AG plays an active role in working closely with customers to address and alleviate challenges and in the process magnify business opportunities.
Our team starts with assisting customers in liberating data and unlocking value. Customers usually sit on huge amounts of data which is present as a result of servicing their customers over a long period of time. This data is albeit siloed and therefore is not efficiently used by these enterprise customers. It is important to deflate these siloes and magnify the value of this data in order to run the transformational processes and services. With our hybrid digital integration hub, we technically enable government institutions to break down data silos, between cloud and on premise, create new links between data, garner new insights and seamlessly connect to build new service innovations through simplified connected governments.
Sustainability and responsible corporate action are the company’s guiding principles that are central at Software AG. We are committed to contribute towards digital transformation responsibly and support the world’s leading enterprises transform with purpose.
Last year Software AG signed the UN Global Compact (UNGC), the world’s largest sustainability initiative for responsible and sustainable corporate governance, with the aim to create economic, ecological, and social values (ESG). The company’s global carbon footprint is also assessed to monitor the reduction path towards net zero CO2 emissions. This strategy is driven by the company’s Sustainability Roadmap 2025 which highlights ambitions in five key areas: leadership and governance, our employees, customers & technology, value for society and impact on the environment.
Lastly and importantly, technologies today are making it easier to monitor and reduce carbon emissions for enterprises. For instance, Software AG’s ARIS for Sustainability is a tool offered complimentary to all customers with a pulse on their ESG goals.
We believe that youth programmes are a backbone to the ‘Future of learning’ and ‘Future of work’. With an increasingly digital work environment we have established two vital programmes for the upcoming and ongoing talent in the region. These are :
- Future Disruptors Program: Launched in 2020 for senior undergraduate students with chapters in Saudi Arabia and UAE, the program aims to nurture innovation by bridging the gap between the current developments in the corporate world with increasing expectations of the ‘digitally-native’ and ‘sustainable-conscious’ workforce of tomorrow. Students are encouraged to address real-world challenges through new and emerging technologies such as IoT, AI and machine learning based innovative models to create use cases on simulated data, based on feasible business uses cases and expected ROIs of these use cases. The program empanels advocates of leading organiations in the region as members of the jury who run a rigorous judging process to award the most deserving idea as part of the region’s innovation agenda.
- IoT Academy: Software AG launched the region’s first IoT Academy in 2022 (currently training its second batch of IoT aspirants). The academy aims at providing learners with knowledge and skills to build and lead IoT-based transformations via a 12-week intensive IoT-focused program of courses and live workshops. With diverse IoT applications and several vertical IoT deployments emerging, the program encourages participants to emphasize on new ways thinking, adapting to new industry norms and deployments of IoT technologies that establish the benchmark for industries globally and gain the ability to build real-world applications on sustainability and other pressing business cases. The course centers on general and specific IoT market intelligence, trends and market growth opportunities, go-to-market strategies, sales and technical workshops.