“This will have a profound effect on how businesses provide information and services to a growing online savvy user base,” says Arthur Goldstuck, MD of World Wide Worx.

Goldstuck, principal analyst for the annual SME Survey in South Africa, points to a coming watershed that will make it all the more crucial for small and medium enterprises (SMEs) to have an effective online presence.

“More than ever, the sustainability and competitiveness of SMEs in South Africa has become a critical component in an economy struggling to create jobs,” says Goldstuck. “It is therefore vital to determine those factors that will ensure that SMEs are able to make an effective contribution to job creation, while ensuring their own survival and prosperity.”

“Already, many consumers turn to browsers and search engines for assistance in finding the right product or service. This can be expected to increase exponentially as more people access the Internet on their phones. Therefore, those SMEs that are not online, or that have a limited or ineffective presence, could suffer,” he reiterates.

Goldstuck intends to put this hypothesis to the test in the 2011 SME Survey, which has contributed original groundbreaking research into the forces shaping small, medium and micro enterprises since 2003. This year, he says, the researchers are interviewing some 2,000 such companies about Internet adoption, the role an online presence plays in increasing their competitiveness; and how that in turn contributes to the economic success of South Africa as a whole.

Other research conducted by World Wide Worx has already pointed to 2013 as a crucial year; Goldstuck says he anticipates a massive intensification in the demand for online services and information. It is a turning point which this survey intends to identify and to some extent, quantify.

“This is borne out by statistics that show that an acceleration of Internet growth began in 2008. This resulted in the number of Internet users in South Africa rising by more than two million in the next two years, from 4.6-million to 6.8-million in 2010. Further, this means that by 2013, there will be 4.6 million experienced users on the Internet, and the experienced user base will see the same acceleration that the overall user base began to see five years earlier. This means that there will be a fast-rising expectation for businesses to be ready for online demand for their services,” he says.

Technology and connectivity have always shaped the SME Survey but the 2011 version is to be the most strongly Internet-oriented survey since the first iteration of the research in 2003.

“We are now going back to the core question that we originally asked: What’s the impact of IT on the competitiveness of the SME? Only this time, we are focusing specifically on the growing necessity for an online presence – whether that is having a basic website, using social networks or advertising online.”

Bearing in mind the importance of SMEs to the crucial macro issue of job creation, the results of this survey may be critical pointers as to how SMEs should conduct business in the future. “There is no doubt that successful small businesses are important to the larger national economy, and it would appear that the successful SMEs of the near future will be those that have an online presence,” concludes Goldstuck.

• SME Survey is the original representative survey of small, medium and micro enterprises in South Africa. For more information, visit www.smesurvey.co.za

The concept of accessing processing power, data storage facilities or software on tap has been around for years. But a lack of affordable bandwidth and experienced service providers made it a potentially risky business.

Now South Africa’s bandwidth boom has already allowed 46% of large local businesses to adopt some form of cloud computing, and by 2013 more than half will have taken the plunge

The findings come in IP EXPO Corporate Cloud Survey 2011, a new report by World Wide Worx commissioned for the IP EXPO technology trade show.

“Out of 100 large JSE-listed corporations that we interviewed, 46% are already using cloud computing,” said World Wide Worx MD Arthur Goldstuck. “Another 6% plan to introduce it next year and another 4% the year after, so it will be close to 60% by 2013.”

The early adopters are pleased with the results, with 80% of the companies using cloud computing saying they were satisfied.

“While companies are starting to embrace the technology, there is definitely no herd mentality around cloud computing, which is a positive indicator,” says Goldstuck. “Those who have adopted it have given it much thought and looked very carefully at how cloud computing can meet their needs. When a company takes that kind of considered approach, it is more likely to be satisfied with the results.”

Only 13% of the total sample said cloud computing was not important for their business as they didn’t see any benefits. Another handful cited poor infrastructure or security concerns, but most companies that still shun cloud computing are inhibited mainly by a lack of understanding, Goldstuck says.

“The problem is that IT administrators are out of their comfort zone. Decision-makers are not aware of what the cloud can do for them because they are not getting the right information about the benefits – in plain English.”

Cloud computing has massive advantages as it removes the cost of buying, installing, maintaining and upgrading hardware and software, lets companies pay for services on demand, and creates economies of scale if a third party specialist handles the equipment for them. Goldstuck believes all companies should now be assessing it – if it offers clear benefits to their businesses.

For companies already using it, the most popular business model is to outsource their server operations to a third party specialist and access processing power, storage and software services over a private network. That saves them the headache of operating their own equipment.

A more conservative and slightly less popular model is to retain ownership of the servers, and buy only the software as a service. That, however, can limit the possibilities of greater savings achieved by companies that no longer run their own IT infrastructure.

Since companies don’t want to run sensitive data over the public internet, some have created a private cloud but have it hosted by a third party specialist.

“The problem with cloud computing is that it is literally a vaporous concept,” Goldstuck says. “Some companies don’t even want to start considering it because it seems so nebulous, but once you start using it you become a convert. When small and medium sized enterprises (SMEs) see the benefits in terms of security, reliability and never having to worry about what’s happening on their own machines for the integrity of their data, their attitude changes completely. SMEs see the benefits more quickly than large corporations because you can easily and quickly get a financial saving from the public cloud.”

Goldstuck believes that every company, from the largest JSE-listed corporation to SMEs, should already be exploring the benefits. By 2013, when more than half of South Africa’s largest corporations are reaping the benefits and early doubts have been dispelled, it will reach a tipping point that will encourage every other company to embrace it, he says.

Which operations should be moved to the cloud first varies with each organisation. A bank, for instance, should ideally not put customer data into a third party data centre.

One lingering problem is a current lack of standards, however, as that discourages many potential users. Big industry players like Microsoft, VMware, Apple and IBM should devise clearer standards for the benefit of the whole industry, Goldstuck says.

Lizelle Christison, manager for IP EXPO, said the trends being seen in corporate South Africa were mirroring trends first seen by IP EXPO’s sister show in the UK. “We are mirroring the UK trends, although local adoption rates are lagging behind by two or three years,” she says.

* The full results of the IP EXPO Corporate Cloud Survey 2011 and analysis of its findings were presented at the IP EXPO conference on 15 November. The research was conducted with 100 JSE-listed companies each employing 200 people or more. Download the presentation by clicking here.

MXit and Facebook lead the way in user numbers, while Twitter has seen the most dramatic growth in social networking in the past year, and BlackBerry Messenger is the fastest growing network in the second half of 2011.

These are among the key findings of a new study released today by Fuseware and World Wide Worx, entitled South African Social Media Landscape 2011.

“The question of how many South Africans use each of the major social networks comes up so often, it became a priority for us to pin down the numbers,” says Michal Wronski, Managing Director of information analysts Fuseware and co-author of the report. “The data was collected through a combination of Fuseware’s analysis of social network databases, information provided directly by social networks, and World Wide Worx’s consumer market research.”

An analysis of Fuseware’s extensive database of Twitter usage, in conjunction with World Wide Worx’s consumer market research, shows that there were 1,1-million Twitter users in South Africa in mid-2011. This is a 20-fold increase in a little more than a year.

“One of the drivers of growth of Twitter is the media obsession with the network,” says report co-author Arthur Goldstuck, managing director of World Wide Worx. “Most radio and TV personalities with large audiences are engaged in intensive campaigns to drive their listeners and viewers to both Twitter and Facebook. The former, coming off a very low base, is therefore seeing the greatest growth.”

As in the global environment, not all Twitter users are active users, with only 40% tweeting, but probably as many simply watching, following and using it as a breaking news service.

MXit remains the most popular social network in South Africa, with approximately 10-million active users. Its demographic mix runs counter to the popular media image of MXit as a teen-dominated environment. No less than 76% of the male user base of MXit and 73% of female users are aged 18 or over.

A surprising finding emerged from analysis of Facebook data. Of approximately 4.2-million Facebook users in South Africa by August 2011, only 3.2 million had visited the site in the year-to-date.

“This is partly a factor of many users moving on once the novelty of the site had worn off, as well as a result of the fickle nature of the youth market,” says Wronski. “Once BBM picked up significant traction in private schools, for example, many teenagers who had previously flocked to Facebook, opted for BBM’s greater immediacy.”

While LinkedIn, aimed at professional users, also reached the 1,1-million mark, it came off a far higher base – but still saw 83% growth of South African users from 2010 to 2011. Of these, 112 000 or 10% are business owners.

Consumer research analysed in the report revealed that future intention of usage of most social networks is strongly related to age. The younger the user, the greater the intention of usage.

“This is only one of many micro-trends shaping social networking,” says Goldstuck. “MXit, Facebook and BBM statistics illustrate, for example, that as social networks become more mainstream, their penetration within all age ranges deepens. This, in turn, will result in the continual flattening of the age curve as social networks mature.”

* The executive summary of the report includes the above information as well as a full contents list, with pricing and ordering information. Click here to download or open it

The Online Retail in SA 2011 study shows that the total spent on online retail goods in South Africa passed the R2-billion mark in 2010 for the first time. It reached R2,028-billion, growing at 30% over the previous year.

Online retailers are even more bullish about 2011, with the industry consensus pointing to 40% growth this year. This will represent the highest rate of growth for online retail in South Africa in almost a decade.

“This dramatic rise in online retail comes in the wake of an ongoing increase in the number of experienced Internet users in South Africa,” says Arthur Goldstuck, managing director of World Wide Worx and principal analyst for the survey. “Last year there were 3.6-mlilion people who had been online for five years or more. By 2015, that figure will be 6.8-million – almost double the potential e-commerce market of today.”

In 2010, Traditional, physical retail in South Africa reached R561bn, according to Stats SA. This means that online retail still makes up less than half a per cent of total retail in SA: a mere 0.36%. At the same time, however, the growth rate of online retail in South Africa in 2010 was four times that of physical retail: 30% vs 7%.

Internationally, according to global online retail data analysed in the report, growth slowed in most regions during the global financial crisis, but did not turn negative: total sales never fell anywhere in the world. Industry estimates for the total value of global online retail in 2010 come to an average of about $545-billion. The figure for 2009 was $469-billion.

This indicates that, globally as in South Africa, online retail is recession-proof for now, while it still makes up a small proportion of total retail worldwide.

“This shows us that online retail growth represents not a rise in shopping activity, but rather a shift in shopping activity, from the physical space to the online space,” says Goldstuck.

Among urban cellphone users, 44% now use cellphone banking services, compared to 27% a year earlier, according to the Mobility 2011 research project conducted by World Wide Worx and backed by First National Bank. In smaller centres and towns, 27% now use cellphone banking, suggesting that rural areas lag urban users by about a year in take-up of these services. In total, 37% of South Africans in urban and rural areas aged 16 and above now use cellphone banking.

“Our predominant customer base resides within the mainstream market: 65% of FNB’s 2.6 million customer base earns less than R100 000 per annum and are between the ages of 18 – 40 years old. Cellphone Banking is becoming the preferred alternative as people across the board are driven by the ‘anywhere, anytime’ concept of banking.” says Ravesh Ramlakan, CEO FNB Cellphone Banking Solutions

Usage of cellphone banking peaks in the 26-34 age group, at 41%, and drops to 11% in the over-45 group. Male usage far outpaces that of females, at 56% against 44%. While education is a factor in usage of cellphone banking, with 43% of cellphone banking users having matric, and 38% with post-matric qualifications, the biggest proportion of cellphone banking users – no less than 27% – earn less than a R1000 a month.

The vast majority of cellphone banking customers still use the basic services, such as balance enquiries (78%) and notifications (58%).

However, transactional services are for the first time major components of cellphone banking services, with half of respondents buying airtime, 24% paying accounts, and 17% transferring funds between accounts. Emerging Mobile commerce transactions such as purchases and sending money to another persons’ cellphone are also appearing on the radar screen for the first time. 12% of cellphone banking users also sending money to other individuals, and 11% making a purchase via their cellphone.

For most of these services, urban respondents are far more likely to have made use of them, except in the case of sending airtime to someone: 33% of rural users of cellphone banking have done so, versus 22% of urban users.

“Products like the FNB eWallet are allowing us to bridge the gap between the banked and the unbanked and address the real need of access to financial services. This also allows for the transfer of cash and airtime to be done safely and easily.” says Yolande van Wyk CEO of FNB Smart Services.

Most of this growth in usage comes off the back of another surprising finding: more than 80% of cellphone banking users are satisfied with the security of cellphone banking. The proportion of urban users slightly outweighs that of rural users, but not significantly so.

“Previous studies had shown satisfaction with security as below 60%, indicating that market education and experience has made the difference in uptake,” says Arthur Goldstuck, managing director of World Wide Worx.

The Mobility 2011 project comprises two reports, namely the Mobile Consumer in SA 2011 and the Mobile Internet in SA 2011. It is based on face-to-face interviews with a nationally representative sample of South Africans, conducted towards the end of 2010.

The executive summaries, with purchase information, can be downloaded by clicking on the links below:
Executive Summary -The Mobile Consumer in South Africa 2011
Executive Summary -The Mobile Internet in South Africa 2011

The Mobility 2011 research project, conducted by World Wide Worx and backed by First National Bank, reveals that 39% of urban South Africans and 27% of rural users are now browsing the Internet on their phones. The study excludes “deep rural” users, and represents around 20-million South Africans aged 16 and above. This means that at least 6-million South Africans now have Internet access on their phones.

“Approximately 30% of FNB’s 2.6 million Cellphone Banking customer base is in the middle income segment. During the festive period for example, the FNB.Mobi site, which is generally accessed by the tech savvy via the internet on their Cell Phones, attracted high volumes of visitors. Cellphone Banking is becoming the preferred alternative as people across the board are driven by the ‘anywhere, anytime’ concept of banking.” says Ravesh Ramlakan, CEO FNB Cellphone Banking Solutions

The big winner in terms of sites and services is Mxit, which enjoys the attention of 24% of cellphone users aged 16 and above (29% of urban, 19% of rural users). However, Facebook is catching up fast, reaching 22% of users, and in fact passing Mxit in the urban over-16 market, with 30% reach, versus 13% among rural users.

Twitter will also become a key mobile tool, almost catching up to MXit in the coming year, from a low 6% of cellular users at the end of 2010. The proportion of urban Twitter mobile users is exactly double that of rural users: 8%, against 4%.

“Twitter is the big surprise of the study,” says Arthur Goldstuck, managing director of World Wide Worx. “But it is being pushed so hard by media personalities, it’s time had to come,”

The most dramatic shift of all, however, is the arrival of e-mail in the rural user-base and its growth among urban users. There has been a substantial shift among the latter, with urban use rising from 10% in 2009 to 27% at the end of 2010. While the percentage growth among rural users is lower, the fact that it was almost non-existent a year before means the 12% penetration reported for 2010 indicates mobile e-mail becoming a mainstream tool across the population.

While cameras, diaries and games continue to dominate the list of features used on phones, FM radio and music players have become part of a mobile “Big Five”. However, there is a significant difference in the features preferred by urban and rural phone users. Three quarters of urban respondents (75%) use their phone cameras, but little more than half of rural respondents (55%). Music players on the phone get the vote of 53% of urban users, versus 36% of rural users. Surprisingly, the gap is reversed when it comes to games on the phone: 54% of urban users enjoy these, compared to 65% of rural users.

The Mobility 2011 project comprises two reports, namely the Mobile Consumer in SA 2011 and the Mobile Internet in SA 2011. It is based on face-to-face interviews with a nationally representative sample of South Africans, conducted towards the end of 2010.

The executive summaries, with purchase information, can be downloaded by clicking on the links below:
Executive Summary -The Mobile Consumer in South Africa 2011
Executive Summary -The Mobile Internet in South Africa 2011

More than 90 per cent of business decision-makers across Africa are expecting prices to drop and competition to increase dramatically, according to the Telecoms Trends in Africa 2010 report, released today by World Wide Worx and Database 360.

The survey, conducted among 1100 Internet-using small, medium and large businesses across 20 African countries, also revealed that most African countries remain heavily reliant on slow or expensive forms of connectivity, such as dial-up and satellite. However, they are beginning the move to broadband.

“Our interviewers encountered tremendous enthusiasm for the Internet in all countries we surveyed,” says Louise Robinson, Managing Director of Database 360. “There is little doubt that, in this new connectivity era, the very nature of most businesses is changing.”

Database 360 operates a call centre in Cape Town, from which the respondents were interviewed telephonically. The study was compiled and the data analysed by World Wide Worx, South Africa’s leading independent technology research organisation.

“ADSL is fast becoming the standard form of business Internet access across Africa – more than 40 per cent of businesses in these 20 countries are using it,” says Arthur Goldstuck, MD of World Wide Worx. “However, we can see the limitations of existing infrastructure from the fact that satellite connectivity remains a key part of the mix.”

More than one in five respondents said they were using satellite connectivity, with a similar number planning to add it to their options.

“Satellite is the most expensive means you can possibly use to access the Internet,” says Goldstuck. The continued appetite for it tells us that, even though there is an expectation for better and cheaper connectivity, the reality on the ground remains one of limited infrastructure.

“Moreover, once businesses go online, the Internet becomes increasingly more vital to their survival, and having a backup form of access becomes increasingly more important.”

Countries like Mauritius, Ivory Coast and Namibia are already showing strong growth in ADSL usage by business, while Angolan businesses indicate the highest anticipated growth for this form of broadband.

Robinson adds: “It’s amazing to see how the level of Internet usage shoots up wherever the new undersea cables have landed and fibre optic networks have linked the cables to urban centres. The East Africa countries, especially, are taking to social networking as a business tool to a greater extent than almost anywhere else in Africa.”

The survey highlights Kenya and Uganda as the biggest African users of social networking for business. However, even landlocked countries that have recently seen major upgrades to their fibre optic networks, such as Botswana and Zambia, are also moving rapidly in this direction.

The study further explores the use of general Internet applications, e-mail on cellphones and the emergence of cloud computing in Africa.

World Wide Worx and Database 360 will also shortly release separate national reports for each of the countries surveyed. - 15 September 2010

• Download the executive summary of the Telecoms Trends in Africa 2010 report by clicking here.

According to principal researcher Arthur Goldstuck, the impact of the World Cup is the big question on the minds of many. “Enormous expectations were created in terms of what the event would do for the country. Our research last year showed that 84% of SMEs expected a positive impact on the economy. However, less than half expected that it would have an impact on their own businesses. This year, we will measure whether that impact occurred – and examine if it was in line with expectations,” he says.

Any numbers in terms of World Cup costs and benefits right now are at best speculative, says Goldstuck, but he notes that as the World Cup drew closer, it became apparent to many SMEs that the optimistically-anticipated benefits might not materialise. “Short term benefits really are unlikely for SMEs; much of the action was locked down for FIFA and sponsors. However, the sense is certainly that the World Cup will deliver benefits for years to come, in terms of goodwill owing to its success, as well as infrastructure which remains.” He says it is obvious that a major positive impact on the country’s image and its potential for foreign investors has resulted.

Andile Lungisa, NYDA Chairperson, says the work of SME Survey is arguably more important than ever, given the economic challenges faced by the country. “Many jobs have been lost with the impact of the recession. By understanding how government and the private sector can influence and stimulate the SME sector, there is the potential to elevate performance and grow employment opportunities for more South Africans.

SME Survey 2010 will also test the extent to which SMEs have access to sustainable development initiatives – and extent to which they need such structures. Says Goldstuck, “To date, efforts at intervention and support have not focused on sustainable development but rather tended to be one-offs. We need to unpack the sentiments of SMEs on the necessity for sustained intervention to guide understanding and policy on what will make SMEs more effective.” Such interventions, he adds, can come from government, the private sector or a combination of the two in joint initiatives.

With environmental awareness elevating in the national consciousness, SME Survey 2010 will gauge whether business owners agree with the need for environmental awareness. “More than that, we will examine if our SMEs have embraced the concept of doing business in an environmentally friendly manner,” says Goldstuck.

He does point out, however, that such notions are only likely to become pertinent once a company has established itself and become profitable. “It is worth noting that many environmentally friendly options are tied to efficiency; in the face of escalating prices of energy, that provides some pragmatic forces.”

In addition to these three new research questions, Goldstuck notes that SME Survey will as usual address a wide range of topics and factors, including IT and connectivity and key issues which keep the business owner awake at night. “We want to know what makes the SME more sustainable, what keeps it competitive and what it sees as threats and risks in the dynamic South African business environment,” he concludes.

SME Survey 2010 is sponsored by the National Youth Development Agency.

The final results will be released at SME Survey’s FREE Small Company, Big Voice Road show’s hosted in Johannesburg (27 Oct), Bloemfontein (2 Nov) and Durban (3 Nov).Visit the SME Survey web site to find out more. - 24 August 2010

This annual competition, known as the Nova Short Story Competition, has been running since 1972, encourages writing in the science fiction and fantasy field and promotes local talent. This year again sees a double competition where stories will be judged as either general or South African in theme and backdrop.

The South African section prize is sponsored by World Wide Worx, and will be judged by its managing Director, Arthur Goldstuck, a former winner in this section of the competition.

A special prize for under 18s will also be awarded if enough entries of suitable quality are received.

Further information and an entry form may be obtained on the SFSA web site by clicking on the Nova story competition link, or by sending a stamped, self-addressed envelope to SFSA Short Story Competition, PO Box 8022, Edenglen 1613. Alternatively, send e-mail to SFSA.

The closing date for the competition is 30 September 2010.

17 August 2010

Click here to download our 2011 research schedule:  WWW reports 2011.

Click here to download the executive summary of our Mobile Internet in SA 2010 report.

Click here to download the executive summary of our Internet Access in SA 2010 report.