The Middle East could become the world's hub for communications following recent developments in the region, Eric Russell reports.
It will centre on Dubai where a recently opened e-commerce acity complex' is already attracting international IT companies.
The United Arab Emirates is set to become the centre of the e-commerce world with its Dubai Internet City, Ideas Oasis and Media City initiatives. The city complex was opened on schedule last October and has already attracted major international companies in IT and communications.
Dubai Internet City (DIC) provides modern, ready-to-operate, full serviced office space that caters for the needs of new economy companies with leading edge wired and wireless networks. Both rent and purchase options are available with flexible lease agreements. Companies can also take land on a renewable lease of up to 50 years and build their own offices. Now, the law allows 100per cent foreign ownership of companies while rules relating to partnerships with local sponsors have been relaxed. Sales, company earnings and private income are completely exempt from taxation.
Dubai Ideas Oasis is a unique community of entrepreneurs, incubators, venture capitalists and other enabling organisations. The aim is to create an environment in which new economy business ideas can be executed rapidly with a high degree of success. It also aims to identify entrepreneurs with potential and will enable them to use the internet to build real value.
The infrastructure for executing e-business ideas includes a range of incubators. The first, Dubai Ideas Accelerator, focuses on early-stage businesses and provides start-ups with the necessary infrastructure, seed capital and enabling services. The Oasis also houses a thriving venture capital and angel funding community, marketing services companies, advertising agencies, technology outfits, legal and accounting firms, strategy consultants, human resources organisations and its own Private Equity Fund.
Phase one of Dubai Media City consisted of three buildings each with six floors of 20000 square feet. In the first six weeks some 35 companies signed up for occupancy including the BBC and other broadcasting companies, advertising and PR agencies, publishing and multi-media companies. Each building is fitted with an advanced technical infrastructure and the landscaped environment and recreational facilities have been designed to complement the creative businesses on the site.
Complete ecosystem
Nazar Rasheed, development manager of DIC, says that while most cities house enabling organisations, this is the first project that brings them all together on one site. It is a complete ecosystem with all the companies needed for business operations working in close alliance. Ultimately, he says, it could become the Silicon Valley of the Middle East and rival India's position in software and IT development.
Rasheed says the new economy thrives on knowledge, innovation and entrepreneurship. Its most crucial resource is talent and Dubai is well placed midway between two large pools of high skill knowledge workers: in Egypt/Jordan and the Indian sub-continent. It is also ideally placed to serve a region that stretches from Egypt to the Indian sub-continent and from South Africa to the CIS with a population of over two billion people.
Dubai offers a modern housing infrastructure, world class medical, education and recreation facilities and a high quality of life suitable for families with children something the country wants to encourage. It is also emerging as one of the world's leading leisure destinations with its sunny, year round climate and sporting facilities.
An international airport offers daily flights to all major business hubs in the Middle East, Europe, India, South East Asia, North Africa and the CIS. Two world class ports provide direct and frequent connections to all major cities.
To meet the increasing industry requirement for knowledge workers, the world's first internet University is being set up at Dubai Internet City. It will offer a curriculum that covers all areas of e-business and will be affiliated with world class academia and research institutions. But there is more to these moves than just keeping up with global developments. The region is aware that its oil reserves will not last for ever and income will have to be derived from other sources. In the meantime, the increasing use of other energy sources such as windpower and fuel cells, plus the development of electric vehicles, will bring downward pressure on oil prices and profits.
The UAE has to increase its GNP and needs quality initiatives such as DIC both to encourage companies to come into the region and to stimulate its own entrepreneurs. As part of this promotion, Dubai plans seminars and conferences to encourage new collaborations and alliances. It recently hosted an OECD conference on emerging market economies and electronic commerce. This was well attended, with visitors from over 60 countries and was co-sponsored by Microsoft and Siemens.
Key to the success of DIC, as with all Internet projects, is access to wide bandwidth. The huge amounts of data in video and image files and the increasing volume of traffic demand wide bandwidth to keep transmission and access times to the minimum.
These needs are being supplied by Astrolink LLC, an international wireless broadband telecommunications company with a space-based network that is being rolled out to provide high-speed, end-to-end data connections to businesses and individuals around the globe.
Scott Subhani, vice-president of Astrolink in the Middle East, says the region today presents high potential for growth in e-commerce, and the Middle East will soon emerge as major player in internet trading. Public awareness on the benefits of e-trading and the urge of businesses to cultivate its benefits are maturing.
Governments are taking ownership of IT focused agendas as part of an overall scheme for economic growth. The UAE, Egypt, Jordan, Bahrain, Saudi Arabia, Lebanon and Syria are among those leading this initiative. But the challenge is to bring broadband to businesses at an acceptable cost.
News from the region
Cisco Systems, a world leader in networking and e-commerce technology, has recently signed an agreement with the United Arab Emirates University to create the first Cisco Networking Academy in the Middle East.
Jumeirah International, the region's leading hotel group, has just signed a Microsoft Enterprise Agreement to standardise its networking technology. This will enable online access for both staff and guests, increasing the group's efficiency and providing extra features for visitors.
Thomas Huber, IT director at Jumeirah International, says many guests like to stay in touch with information sources and their businesses while in hotels, even when on holiday. This means providing easy access to the Internet. In the Burj Al Arab hotel, this extends to providing laptop computers in every room.
Siemens Business Services is established in the region with mobile communications and networks. It is using its systems integration expertise with several telcos to enable complete communications solutions.
Mohammed Rizvi, director of Siemens Business Services in the UAE, says the region has proved a substantial market for mobile phones with some 1.3m subscribers out of a total population of about 2.8m. While this represents a substantial customer base, it also leaves room for considerable growth in the future. The number of internet subscribers is also rising rapidly. Rizvi adds that the WAP market is also strong with some 80per cent of its mobile phones being WAP-enabled.
Global potential
He says the Dubai Internet City model can be deployed anywhere in the world. The experience gained here will stand the company in good stead for future ventures.
Siemens has become a major global player in e-business while still maintaining its strength in its traditional area of power generation. The company itself intends to be totally e-driven within three years. With nearly half a million employees worldwide to bring into an email and intranet system, this is no mean project.
DIC says more than 300 companies have signed up to be part of the community .
Leading IT companies in the Middle East have recently joined forces to launch the regional chapter of the Application Service Provider Industry Consortium (ASPIC), an international advocacy group for the fast growing ASP industry. Ahmad Bin Byat, Chief Executive Officer of DIC, says it is an exciting time in the region for innovative business solutions such as the ASP model.
The City has recently announced the next step in its ambitions to become a regional hub for e-commerce the signing of a major 10-year initiative with IBM. As part of this initiative, the two organisations will build two Internet Data Centres offering a full set of solutions, services and technologies to enable comprehensive e-business hosting capabilities.
It is generally acknowledged that the Dubai initiative has been implemented very successfully and very fast. This is principally due to the single mindedness and driving force of His Highness General Sheikh Mohammed bin Rashid Al Mahktoum, Crown Prince of Dubai. And, as the Dubai model could be implemented elsewhere in the world, the UAE could now well show other countries the way to benefit economically from e-commerce.
Contact Dubai Internet City 00 971 4399 8888 www.dubaiinternetcity.com
