With SAP investing heavily in the Kingdom of Saudi Arabia, the country’s Digital Transformation is set on the road to success. Intelligent CIO talks to Khaled Alsaleh, Managing Director, SAP KSA, about the importance of cloud, SAP’s investment in a local data centre in KSA, and the futuristic Smart City of NEOM.
Is cloud a driving force for the expansion of the IT market in the Kingdom of Saudi Arabia (KSA)?
Absolutely. When we look at the cloud landscape in KSA it’s clearly the future and the present at the same time and has been in transition from the usual tradition and way of doing business. We at SAP have realised that and we have made considerable investment within KSA, north of 285 million Saudi Riyal over four years investment, in order to establish, create and operate our own local cloud data centre in KSA that was based on statistics around the potential of the cloud.
According to studies, 66% of KSA IT decision makers say that cloud supports the future transition and digitisation happening in KSA including our futuristic city of NEOM.
That is one of the largest, if not the largest, project as a futuristic Smart City on this planet. At the same time 83% of Saudi CIOs say cloud is the foundation for future tech. And that includes Machine Learning, the Internet of Things, Artificial Intelligence and Blockchain. So truly cloud is the present and the future and we are capitalising on that to foster the intelligent enterprise platform that we have created to push in the same direction.
Are businesses in KSA up to speed when it comes to Digital Transformation?
We have under the umbrella of the Ministry of Communications and Information Technology a unit by the name NDU (National Digitisation Unit) that has been active for the past years and it’s tasked with a mission to drive the Digital Transformation under the umbrella of the overall socio-economic reform.
We are going through and under the umbrella of the National Transformation Programme 2020 which is around the corner and it has been revised in order to be more fit towards the direction of our Vision 2030 to reform the society and the economy of KSA towards being a knowledge-based economy and diversified from oil and invest in the right direction. When it comes to IT it represents more than 33 billion Saudi Riyal by the end of this year.
So that’s massive?
It is massive and it is growing. And if we add to that the communications industry, which relies heavily on IT as well, then the number would be over 100 billion riyals. We believe that this should contribute to the GDP of the country. Currently the contribution of the IT industry to the economy and to the GDP of KSA is less than 4% despite the huge spend on IT in KSA.
The Ministry of IT and Communications is working day and night to enhance this contribution of ICT to the GDP. We at SAP are proud to be the first multi-national IT company worldwide to invest, build and operate a local cloud data centre, a local cloud hub, that will serve both the public sector and private sectors.
And we are proud that we have several organisations and enterprises in KSA live on our local cloud data centre, be it very large enterprises, public sector entities or small and medium businesses. That will contribute to the expectations of making IT more cost effective going forward making sure that we can contribute to the saving the government is looking for. We anticipate in our studies that relying on our cloud data centre in KSA the enterprises using the intelligent enterprise platform are expected to reduce time to market by 20-50%.
The IT market is set to reach 33 billion Saudi Riyals in 2018. It is growing, next year the economy overall will grow and IT based on the cloud platform and the intelligent enterprise is going to contribute massively to that.
You mentioned the investment of SAP in KSA and you mentioned the cloud data centre, what other forms of investment has SAP made in KSA?
We are proud that we are supporting the Saudi youth job creation. We have several programmes towards that direction and we would like to mention a few. SAP YPP (SAP Young Professional Programme) has been in place for the past years and we have graduated more than 500 students.
Almost 100 students every year, males and females, are taken through three months of intensive training. Not only on our solutions and not only do they become certified SAP associates but we also provide them with content around soft skills, hard skills, around how to bridge that gap between the higher education outcome and the market demand and the new jobs that are evolving in the market.
And at the same time in addition to the YPP, which is part of our Training and Development Institute, SAP through its global Next-Gen academic and innovation community, has so far partnered with more than 35 academic institutions in the Kingdom of Saudi Arabia. Faculty members and students are enabled to innovate with purpose, linked to the United Nations Global Sustainability Goals.
We have also recently opened two SAP Next-Gen Labs in the Kingdom of Saudi Arabia, where we invite our local ecosystem to co-innovate with students through various events and projects. Last, but not least, as part of our #sheinnovates global programme, we have established an SAP Next-Gen Chapter at Prince Sultan University, with a focus on gender equality, to promote STEM education and careers among girls in KSA.
We also have another programme that is very selective by the name SAP Academy, SAP Sales and Pre-sales Academy.
We select a number of students and send them to our headquarters where they stay around six months doing intensive training, on-job training, shadowing experts around the world so that when they come back to the Kingdom they are equipped with all that acquired knowledge and skills to hit the ground running and to start contributing to the development of the IT industry within KSA.
We mostly hire most of the graduates of our programmes as much as we can accommodate and at the same time we conduct a graduation day or celebration for our students. And we invite all our customers and partners to that graduation day and they conduct interviews on the spot on the same day.
Most of them get hired on the same day. Others just take a few days or weeks and then they get hired because of the demand in the market. This is actually one of the investments that this SAP is making. That is part of our commitment to supporting Saudi youth job creation and also pushing in the same direction towards Vision 2030 in which addressing the unemployment ratio is a key pillar.
Is there much of an IT skills gap in KSA?
The scholarship programme by the government and by the Ministry of Higher Education has been very generous. They have been sending a massive number of people, thousands of students studying worldwide in very advanced and well recognised universities and they are coming back with higher education and they are well-educated in certain areas and they are filling the gap.
But in certain areas in very advanced IT domains we definitely have to rely on certain expertise because it is scarce. When we talk of Blockchain it is very advanced and with recent technology you don’t have so many consultants or Blockchain certified people worldwide.
These are the kind of gaps that we need to bridge and fill in and we are trying to do that through the investment in the local skill sets within the Kingdom and that is part of the demand of the Ministry of Labour in which there is a certain percentage that has to be met in terms of localisation and Saudisation.
We are very committed to that and we take it seriously and it is a mission, it is not just a demand we receive from the Ministry of Labour. We believe that this is the right investment and we are pushing in the same direction.
IS SAP involved in the NEOM Smart City project?
We know that NEOM is a futuristic Smart City and not only that – NEOM is going to be a leapfrog for humanity. NEOM is a place where we believe that we are creating a city at the size of a country. We are proud, I am proud, that this is happening in my country.
His Royal Highness Prince Mohammad bin Salman bin Abdulaziz Al Saud has said that NEOM is a place for dreamers and we will only walk with people who understand what that means. We are engaged with NEOM, conducting workshops and brainstorming sessions with them. We are very keen to contribute to this massive project that will take us to the next level in terms of futuristic Smart Cities.