internet of things - markaz research - jun 2014

Kuwait Financial Centre “Markaz” R E S E A R C H

The Internet of Things ! Big Data How GCC will benefit

“Information is the oil of the 21st century, and analytics is the

combustion engine,” Peter Sondergaard, Senior Vice President and

Global Head of Research. Gartner

“We’re more fooled by noise than ever before, and it’s because of a

nasty phenomenon called “big data.” With big data, researchers

have brought cherry-picking to an industrial level. Modernity

provides too many variables, but too little data per variable. So the

spurious relationships grow much, much faster than real

information. In other words: Big data may mean more information,

but it also means more false information.” Nicholas Nassim Taleb

Figure 1: The Machine to Machine Communication Trend

Image Source: CNN1

The Internet of Things (IoT) is based on the premise that nearly every

object (like washing machines) can be connected to the internet, thus

facilitating machine to machine, human to machine, and machine to human

communication. The idea that any physical object can link with the internet

and communicate with other connected objects to relay information to

humans is a profound development in the evolutionary arc of the digital

age.

With 50 billion devices expected to be connected to the internet by 20202,

companies such as GE are using the IoT to power industrial applications in

order to reduce costs and boost profitability. From small (e.g., homes) to

large systems, even as large and complex as cities, the use of IoT is fast

1 http://edition.cnn.com/2013/05/02/travel/london-city-airport-internet-of-things/index.html 2 Cisco Systems, Inc

June 2014

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MARKAZ RESEARCH The Internet of Things ! Big Data – June 2014

Kuwait Financial Centre “Markaz”

2

catching people’s imagination. Cities such as Rio de Janeiro (Brazil) have

transformed themselves through early applications of the IoT based smart

city technologies3. As a key and active component of the world economy,

the GCC region will not be immune to the impact of the IoT wave. In the

GCC, the IoT phenomenon is expected to be fuelled by the following two

developments – the focus on developing smart cities and the creation of

hitherto unconceived of economic opportunities due to the IoT (e.g,

aspirational technology startups for the youth). One of the significant

enablers of the IoT is advances made in Big Data analytics in the recent

past.

Big Data can be defined in simple terms as volumes of data that is so large

that it is extremely difficult to process and analyse them with traditional

statistical techniques. Big Data analytics is simply the application of

sophisticated analytic techniques to such large data sets with usually real-

time information processing capabilities. Such capabilities allow for

predictive data analysis. In other words, patterns and insights can be

gleaned from data that can in turn be used for operational, strategic and

tactical purposes. For e.g., Big Data analytics on crime data can help predict

criminal hotspots, thus strengthening preventive policing capabilities. In the

Middle East, and particularly in the GCC countries, Big Data will have an

important role to play. Large corporate houses and government services in

the Middle East can use the capabilities provided by Big Data to effectively

predict customer response to product launches, target new revenue streams

through identifying patterns of emerging customer demand, detect financial

fraud in real time, etc. Across the Middle East, Big Data is being dubbed as

the “new oil” as the region moves aggressively into developing itself as a

knowledge economy zone.

The confluence of maturing technologies (sensors and Big Data) means that

IoT is expected to create an economic value of US$14.4 trillion by 20224.

Just as the industrial revolution created new industries such as the

automotive industry, the intensification of the age of the IoT could herald

completely new economic models across the world, including the GCC. The

IoT is expected to tie in neatly with the GCC’s economic diversification push.

Since the emergence of the digital age and the era of smart devices, it has

been observed that a number of technological start-ups have appeared in

nations such as the USA. Similarly, the IoT could mark a boom time for

SMEs in the GCC, as the IoT absorption travels across various global

geographies. In whatever fashion the future might turn out, the theme that

is distinctly clear is that the IoT signifies an inflection point in the global

economic, social and digital landscape. The phenomenon will transform

governmental policies in the GCC, as well, given the pressures to respond to

the rising tide of a new digital age that empowers and informs the choices

of the people.

3 WIRED.com 4 Cisco Systems, Inc



3

What is the Internet of Things (IoT)?

The IoT is based on the premise that nearly every object, from household lights and

automobiles to large industrial machines, can be connected to the internet, thus

enabling these objects to be brought to an online platform that will allow for

communication between them5. The idea of physical objects interacting and

communicating among themselves is called as the Internet of Things (IoT). Many

critics opine that the term, the Internet of Things, is more of a catchword than a

phrase that explains the concept clearly.

In simple terms, the internet of things deals with the integration of the objects of

the physical world with the internet based virtual world6.

The idea that any physical object can link with the internet and communicate with

other connected objects to relay information to humans is a profound development

in the evolutionary arc of the digital age7. The phenomenon of everyday objects

connecting to the internet gives rise to the scenario of a society underpinned by an

extensive network of objects, thus aiding in sweeping automation of many tasks.

The network of things works mainly through radio frequency identification

technology or RFID. RFID chips utilise radio waves to beam information to RFID

readers, which can be connected to the internet. The IoT also makes use of

smartphones and sensors fixed in devices that facilitate machine to machine

automated communication. The schematic diagram in Figure 1 illustrates the

connected nature of the IoT age, which will transform the way people live.

Cisco predicts that by 2020, about 50 billion objects, worldwide, will be connected

to the internet, without taking into account the disruptive or force multiplying

impact of any new technologies in between. Cisco has dubbed the phenomenon of

the IoT as the Internet of Everything (IoE), given a future scenario wherein all

objects are likely to be connected to the internet. The American conglomerate,

General Electric (GE), is advancing the cause of the IoT in terms of industrial

applications, and is calling the phenomenon as the Industrial Internet. The following

image illustrates how the application of the IoT (or Industrial Internet in GE

parlance) can transform the wind energy industry.

5 TechMedia Network 6 SAP 7 CNN

The idea of physical

objects interacting and

communicating among themselves is called as

the Internet of Things (IoT).

Cisco has dubbed the

phenomenon of the IoT as

the Internet of Everything (IoE), given a future

scenario wherein all objects are likely to be connected to the internet.



4

Figure 2: Example of Industrial Internet in Action

Image Source: GE8

One of the significant enablers of the IoT is advances in Big Data analytics in the

recent past. Big Data can be defined in simple terms as massive volumes of data

(structured and unstructured) that is so large that it is extremely difficult and

inefficient to process and analyse them with traditional statistical techniques9. Big

Data analytics is simply the application of sophisticated analytic techniques to such

large data sets with usually real-time information processing capabilities10. In

summary, the age of the IoT means that it is the harbinger to a future wherein

machines become conscious elements in the human lifestyle ecosystem. This

promises great benefits, both in the business and the personal spheres; and carries

the seeds for potential threats in terms of disruption in machine performance due to

malicious activities. In whatever fashion the future might turn out, the theme that is

distinctly clear is that the IoT signifies an inflection point in humanity’s digital

history.

8 http://gigaom.com/2013/10/08/will-industrial-internet-create-more-jobs-ge-thinks-yes/ 9 SAS 10 Social Media Today LLC

One of the significant

enablers of the IoT is

advances in Big Data analytics in the recent

past.

In whatever fashion the

future might turn out, the theme that is distinctly

clear is that the IoT signifies an inflection point

in humanity’s digital history.



5

The Internet of Things and the Coming Global Economic

Change

The next wave of global innovation is expected to be driven by the IoT11. The IoT

heralds the age of the thinking machines, powered by the communicative

capabilities of the internet12. The real world applications of the IoT appear

seemingly limitless. For e.g., a washing machine fitted with sensors can detect that

a bearing is wearing out and can send a warning to a service centre. A technician is

dispatched from the service centre with exactly the component required, thus

saving several trips for the service centre13. No sector is likely to be left untouched

by the revolution of IoT, which is powered by data and analytics that are supported

by Big Data capabilities. For instance, devices such as Fitbits that transmit data on

physical exercise of the wearer, heart rate, calorie intake, etc, are already capable

of sending the data into the cloud environment for analysis14. The analysis can aid

in predictive healthcare.

In essence, the IoT is a network of physical objects, which contain embedded

technologies such as sensors15. These technologies allow the objects to sense,

communicate and interact with their external environment (e.g., other physical

objects) or their own internal states (e.g., subcomponents within the machine,

itself). In other words, the IoT includes hardware (i.e., the things themselves), the

networked communication services and the information (or data) services with

respect to the things. According to the technology research firm, Gartner Inc, IoT

would grow to about 26 billion units in terms of installed base by 2020, which is a

30-fold increase compared to 0.9 billion such objects in 2009. The promise of IoT is

expected to be so deep that over the coming decade, the private and the public

sector is expected to enjoy cost savings and additional profits amounting to an

estimated US$19 trillion, globally16.

In the world of Big Data and the IoT, data is the new oil17. The promise of IoT rests

on the premise that if data can be shared properly across a full ecosystem and

made available in areas where analytics are most effective and useful, then it will

transform the way people live, learn, work, and play. The technologies and concepts

of the internet, intelligent machines, Big Data and analytics have matured together

and have become a confluence leading to effect machine to machine and machine

to human (and vice versa) communicative capabilities18.

11 ft.com 12 The Economist Newspaper 13 The Economist Newspaper 14 Columbia Daily Tribune 15 Business Standard Ltd 16 ft.com 17 Cisco Systems, Inc 18 GE

The real world applications of the IoT

appear seemingly

limitless.

In the world of Big Data

and the IoT, data is the

new oil



6

Figure 3: Data Loop of IoT, Industrial Internet Example

Image Source: General Electric19

The IoT connects wireless networks of tagged things or objects as varied as

clothing, automotive components, medical devices, packaging and appliances. The

arrival of the age of the IoT means that big data has got much bigger in terms of

leading to solutions from analysis. The rise of a breed of intelligent machines is

predicated to the concept of the IoT, and is the next growth wave in terms of

combining the IoT and analytics to establishing a living ecosystem of machines.

Many global companies see transformative potential in the IoT, which is

interchangeably also called as the Internet of Everything (IoE). In December 2013,

several leading global industrial companies such as Panasonic, LG Electronics,

Sharp, Haier, etc, created a nonprofit consortium called the AllSeen Alliance to

advance the cause of the IoE20. The industrial application of IoT has encouraged GE

to coin the term called Industrial Internet for the phenomenon of intelligent

machines, armed with data analytics, driving profitability and cost savings21.

A recent report by GE found that small improvements, by as little as 1%, in

productivity through enablers such as reduction in downtime and predictive

maintenance, will produce massive system-wide savings22. The following illustration

depicts the effect of potential 1% savings studied across different industry sectors,

according to GE estimates.

19 Industrial Internet: Pushing the Boundaries of Minds and Machines, Peter C. Evans and Marco Annunziata (GE); 2012, pg10 20 AllSeen Alliance, Inc. 21 GE 22 22 Industrial Internet: Pushing the Boundaries of Minds and Machines, Peter C. Evans and Marco Annunziata (GE); 2012

The IoT connects wireless networks of tagged things

or objects as varied as clothing, automotive

components, medical

devices, packaging and appliances.

A recent report by GE

found that small

improvements, by as little as 1%, in productivity

through enablers such as reduction in downtime

and predictive

maintenance, will produce massive system-wide

savings



7

Figure 4: The Impact of Waste Reduction by 1% in Producing Savings

Image Source: General Electric23

The breadth of the power of the IoE in terms of economic potential is being

analysed by many companies and institutions. Several current applications and trials

depict a picture wherein IoE will be a key guiding force behind human productivity

and innovative industrial solutions. For e.g., HP Labs runs a project called Central

Nervous System for the Earth (CeNSE)24, which consists of developing an intelligent

network of billions or trillions of nanoscale sensors and actuators embedded in the

machine and nature environment25. The sensors are envisaged as connected via an

array of networks armed with computing systems and software to allow exchange

of information among analytical engines, data storage systems and final information

users. The sensors are expected to turn the planet into a virtual smart ecosystem,

wherein everything – humans, machines and nature – are interconnected into a

global grid for powering a better quality of life for everyone26. In 2010, the CeNSE

project announced its first commercial application, in terms of collaboration with

Royal Dutch Shell to help the oil giant uncover new sources of energy without

drilling unnecessary, environmentally harmful and commercially expensive

prospecting wells27. According to a press announcement by HP in March 2011, Shell

and HP are collaborating in order to develop a wireless sensing system that will

acquire very high-resolution earth seismic data, which will in turn be analysed to

detect reservoirs in an environmentally sustainable and monetarily optimum

fashion28.

In early 2009, the American space agency, NASA, and Cisco Systems, announced a

partnership to develop an internet based global climate monitoring platform called

the "Planetary Skin"29. The objective of the project is to capture, collect, analyse

and report data from sensors around the globe to detect patterns in worldwide

climate change. Moreover, the programme will help in managing energy and natural

23 http://ge.geglobalresearch.com/technologies/software-sciences-analytics/reducing-waste-through-the-power-of-1/ 24 Hewlett-Packard Company 25 Hewlett-Packard Company 26 MarketWatch, Inc. 27 Hewlett-Packard Company 28 Hewlett-Packard Company 29 NASA

Several current applications and trials

depict a picture wherein IoE will be a key guiding

force behind human productivity and

innovative industrial

solutions.

In early 2009, the

American space agency,

NASA, and Cisco Systems, announced a partnership

to develop an internet based global climate

monitoring platform called the "Planetary Skin"



8

resources better by converting raw data into insightful information that can aid

policy decisions. Corporations are making a push towards encouraging adoption of

IoT technology in generic consumer applications, as well. At the Consumer

Electronics Show 2014 (CES 2014) in Las Vegas (USA), Intel unveiled several

initiatives and products on the concept of IoT enabled wearable technology30.

Companies such as Intel are vying to convince the general public that IoT based

products are suitable for solving tangible real world problems.

At the CES 2014, a French company called Kolibree unveiled the world’s first app-

enabled sensor connected toothbrush, which analyses brushing habits and passes

information to a smartphone app for effectiveness monitoring31. The Kolibree

toothbrush is touted as the world’s first smart toothbrush and is tentatively priced at

US$10032. Though such smart products may require some acclimatization in the

minds of the people before mass adoption and may in fact be expensive, many

corporations feel that IoT products are the future33. However, there are likely to be

challenges in promoting large scale customer adoption. In a survey conducted by

Forrester Research in 2013, 53% of the American consumers surveyed expressed

disinclination towards appliances that could be used to track and regulate personal

behavior. Moreover, privacy concerns and the threat of technological disruptions

through malicious incidences such as hacking loom large, too, in the case of

consumer appliances belonging to the realm of intimate user contact34. Thus, the

IoT is likely to be welcomed and used more voraciously in the context of impersonal

industrial applications (echoing GE’s Industrial Internet concept), rather than at the

level of private use consumer or home products, at least in the short term.

The idea of IoT in industrial applications involves placing different varieties of

sensors across machines and environments where they are hosted, so as to

remotely monitor performance with the end objective of maximizing profitability35.

GE, one of the early proponents of the IoT for industrial application, or Industrial

Internet in the company’s parlance, introduced 10 industrial IoT products in 2012,

earning the company US$290 million in revenues36. One of the GE IoT customer

stories is TransCanada Corp., which deployed GE’s Industrial Internet hardware and

software when the decision to overhaul the largest power plant in New York City

(USA), the Ravenswood Generating Station, was taken. Jettisoning the option of

spending massive amounts of money on new equipment, TransCanada networked

data sensors to software and commenced gathering and analyzing critical data that

govern the industrial performance of the largest gas turbine in the plant.

TransCanada found that real-time and interactive data based monitoring and

operational governance of the turbine helped in optimum performance, resulting in

lowered fuel costs for the same amount of power generation. This led to cheaper

and cleaner energy, as well. Output increased by 5% for the turbine after the

commissioning into service of GE’s Industrial Internet solution. The 5% translates

into power for 10,000 households in New York City, which makes the solution very

useful for TransCanada.

30 ft.com 31 NDTV.com 32 Daily Mail (Associated Newspapers Ltd) 33 The Wall Street Journal 34 Washington Post 35 The New York Times 36 GE

In a survey conducted by Forrester Research in

2013, 53% of the American consumers

surveyed expressed disinclination towards

appliances that could be

used to track and regulate personal behavior.

The idea of IoT in

industrial applications

involves placing different varieties of sensors across

machines and environments where they

are hosted.



9

The potentialities that IoT represents are so vast that the current use cases are

dubbed as just “the tip of the iceberg” by industry experts. Major public installations

such as airports and rail networks can benefit from the possibilities of exponential

efficiencies that IoT can offer. For e.g., in March 2013, the London City Airport

(LCY) secured funding from the UK Technology Strategy Board (TSB) in order to

demonstrate the benefits of IoT in the LCY operational environment37. Some of the

key features that will be experimented upon and studied are passenger movement

effectiveness through the airport environment, measurement of journey times,

nuances of airport retail, food pre-ordering, baggage and airport asset tracking, etc.

The demonstrator project commenced at LCY in April 2013 and is expected to be

finished by March 2014. The demonstrator uses the Urban Operating System

technology from Living PlanIT and a consortium of companies are involved including

IBM, Milligan, Cisco and several SMEs from the technology space.

One of the key areas for real-world IoE application is in the theme of Smart Cities. A

Smart City utilized intelligent technology to improve quality of life in urban

environments. Cities can use the Big Data arriving in from numerous sensors,

spread and embedded across the urban environment, to reduce costs, measure the

usage of domestic water accurately, manage urban transportation routes and

minimize wastage. IoE has so deeply stirred the thinking around Smart Cities that

market estimates vary widely on the concept. An estimate put the Smart Cities

market, globally, at about US$400 billion by 202038; while some other puts it at

US$3.3 trillion by 202539. Global corporations such as IBM are making a hard sell on

the concept of Smart Cities. With 75% of the global population projected to live in

urban centres by 2050, the concept of Smart Cities is gaining in acceptance among

policy and governmental planners40.

Within the emerging case studies on Smart Cities, Rio de Janeiro’s (Brazil)

centralized operations centre, built by IBM, is seen as a pioneering effort41. The

system integrates data from some 30 urban agencies under a single roof. The

operations centre is credited with making the city smart. When a building collapsed

in Rio de Janeiro in January 2012, the operations centre coordinated the emergency

response for the tragedy, as streets were closed swiftly, ambulances were

dispatched and hospitals were alerted. Twitter feeds from the operations centre

alerted numerous followers about closed streets and substitute routes. The

capabilities to respond to crisis proved to be much enhanced due to the creation of

a smart operations centre. Elsewhere, in Barcelona (Spain), the city was able to

produce cost savings of US$3.1 billion per year by using sensors in parking meters

and public water pipers to enable operational efficiency42.

According to Cisco, the IoT (or IoE) market could create US$4.6 trillion in value for

organisations in the public sector, worldwide, over the coming decade43. The

economic windfall opportunity is predicted on the enhanced capabilities of

governments to save massive amounts of money, generate new sources of income

without increasing taxes, improve employee productivity and enhance benefits for

37 London City Airport 38 GOV.UK 39 Gulf Business (Motivate Publishing) 40 The New York Times 41 The New York Times 42 Washington Post 43 Cisco Systems, Inc

One of the key areas for real-world IoE application

is in the theme of Smart Cities.

With 75% of the global population projected to

live in urban centres by

2050, the concept of Smart Cities is gaining in

acceptance among policy and governmental planners.



10

citizens. Also, across the world, many companies are attempting to showcase

themselves as pioneers in the IoT field, in order to take advantage of emerging

opportunities. The German company, Bosch, set a new company (in December

2013) called the Bosch Connected Devices and Solutions in order to cater to the IoT

market44. The company expects over six billion things to be connected to the

internet by 2015. Also, in October 2013, a memorandum of understanding was

signed by a group of companies comprising – Bosch, ABB, LG, and Cisco – in order

to form a consortium to offer an open standard software platform for the smart

homes market45. The key aim of the consortium is to develop a common software

language that would permit appliances manufactured by different companies to

communicate with each other. Thus, interoperability between services of different

providers can be ensured. If the consortium is successful in its goal, then, in the

future, an individual buying a new washing machine, heating system, refrigerator or

any other type of electrical appliance that features the consortium's compatibility

certificate can expect the appliance purchased to be able to interact and work in

tandem with appliances from other manufacturers within the smart home

ecosystem.

As multiple global corporations drive the agenda of smart homes and smart cities,

the value creation in terms of money through deployment of "killer apps" is

tremendous46. Moving up the scale of evolutionary thought and applications, the

catalyst for smart cities (and even nations) come from the confluence of three

technology-enabled themes, which are the growth of the networked economy,

dependence on the cloud, and the explosion of mobile smart devices. The

confluence of several maturing technologies and applications has meant that

through the combination of lower costs and increased revenues, IoE is expected to

create an economic value of US$14.4 trillion by 2022, according to Cisco47. The five

main factors that will account for the US$14.4 trillion are as follows.

Figure 5: Splitting the IoE Economic Potential among Contributing Factors

Source: Cisco Systems, Inc.

44 Bosch 45 Bosch 46 Cisco Systems, Inc 47 Cisco Systems, Inc

3.7

3.0

2.7

2.5

2.5

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

Customer Acquisition

Innovation (Lowering Time to Market)

Supply chain and Logistics (Waste Elimination)

Asset Utilization (Cost Reduction)

Employee Productivity

In US$ Trillion

Also, across the world, many companies are

attempting to showcase themselves as pioneers in

the IoT field, in order to take advantage of

emerging opportunities.

As multiple global

corporations drive the agenda of smart homes

and smart cities, the value creation in terms of

money through

deployment of "killer apps" is tremendous



11

Beyond the concept of Smart Cities, the benefits of IoT is expected to influence

governmental policies and decisions at every level, due to the following

potentialities48 --

State agencies can realise upto US$682 billion in monetary value by

applying IoT solutions to applications such as disease management, bridge

maintenance, connecting transport infrastructure, etc.

Governmental agencies related to the non-defense sphere can reap value of

up to $472 billion through solutions to better fleet management, disaster

response, cybersecurity, etc.

Defense forces, worldwide, can enhance the effectiveness of their military

tasks through information sharing and secure connections. Improved

connectivity among defense forces has the potential to generate US$1.5

trillion in monetary value.

In the area of Smart Cities, the following decade may be a defining one in terms of

proving the breadth and depth of applications and their tangible benefits. A number

of Smart City initiatives are very likely as more success stories (e.g., Singapore49)

percolate. Yet, there are sluggish success examples in Smart City attempts, too.

Two cases that are cited are Masdar (the UAE) and Songdo (South Korea)50. Masdar

city was conceived as a showcase of urban initiatives that can be run on renewable

energy51. With the agenda of economic diversification and reducing dependence on

oil, the Masdar city was commissioned by Abu Dhabi (the UAE). Masdar city, though

still a proof of concept practically, is a city run by sensors. The city is expected to

act as a magnet for further interest and development of green cities in the UAE.

However, Masdar is a case of a greenfield city. So is Songdo in South Korea, which

is seen as a practical implementation of the revolutionary idea of cities as “living

organisms”52. Built on land reclaimed from the Yellow Sea, Songdo is expected to

be completed by 2015 and is touted as the world’s first smart city53. With

urbanization spreading at a rapid pace throughout the world, the cities of the future

will be smart, with a value architecture that will redefine how humans will interact

with their urban environments.

48 Cisco Systems, Inc 49 The Economist Newspaper 50 Guardian News and Media Limited 51 www.nationmultimedia.com 52 www.businessdestinations.com 53 BBC

State agencies can realise upto US$682 billion in

monetary value by applying IoT solutions to

applications such as

disease management, bridge maintenance,

connecting transport infrastructure, etc.

With urbanization

spreading at a rapid pace throughout the world, the

cities of the future will be smart, with a value

architecture that will

redefine how humans will interact with their urban environments.



12

Figure 6: Value Architecture of Future Smart Cities

Image Source: IDC Government Insights, 201354

As the technology of IoT evolves and gains new enthusiasts and detractors, there is

a growing sense of both the benefits and the perils that could be imminent in the

sweeping digital age55. As more and more objects get networked, it brings in the

capability for precise automation. Home life with a plethora of intelligent machines

will push convenience into a complete new orbit. Manufacturers can improve

logistics, boost productivity and reduce waste. Urban authorities can monitor

congestion and generate smart road benefits, with trash cans automatically

informing municipal workers when they reach their limits. However, detractors warn

of the ill consequences of any ignorance or denial of dangers while enmeshed in the

excitement and potentialities of new digital capabilities.

Like any other technology, the digital technology of smart sensors can undergo

malfunction. If sensors regulate every intimate user appliance, including wearable

technologies and personal hygiene products (smart toothbrushes), the

consequences of malfunction can be devastating and traumatic. Also, the risk of

privacy invasion and network security will take centre stage. The ability to manage

the intersection of privacy and security with the tremendous conveniences provided

by IoT is expected to be a great challenge of the internet enabled personalised

digital age56. As IoT devices get installed through individual and family living spaces,

worn on bodies and enter personal spaces where technology had hitherto not

breached, there are bound to be concerns on what happens with the data that the

smart appliances gather.

The issue can be compounded by the fact that most purveyors of smart city

technologies or personal appliances are not major players in the area of warding of

online risks or intrusions. Moreover, surveys on customer behaviors have indicated

that most customers do not follow up on downloading security patches with

systematic and needed regularity57. This provides immense opportunities for

malicious behavior from deviant hackers and sophisticated online criminals. There

54 http://www.urenio.org/2013/11/04/idc-white-paper-smart-cities-internet-things/ 55 Bloomberg 56 BBC 57 WIRED.com

As the technology of IoT evolves and gains new

enthusiasts and detractors, there is a

growing sense of both the

benefits and the perils that could be imminent in

the sweeping digital age

Like any other technology, the digital technology of

smart sensors can undergo malfunction.



13

are indications of this already happening with existing smart devices, such as using

flaws in electronic smart locks to break easily into properties of others, etc58. Also,

there is the tendency among companies manufacturing smart technologies to copy

all consumer data to their corporate cloud59. This can raise uncertainties in the

minds of consumers as to what corporates are doing with the intimate personal data

being collected. Already, 2013 proved to be a breakout year on the issue of

personal privacy, as domestic (US) and international furore erupted on allegations

that the American National Security Agency (NSA) was monitoring internet and

telephonic traffic for collecting information60. With 2014 predicted to be a pivotal

and transformative year for IoT, the issue of privacy and security is likely to gain in

prominence and urgency, impacting corporate and consumer behavior across the

spectrum.

As various sectors and industries intertwine to share data and provide ambient

services to enhance convenience, the security of the cyber layer is increasingly

difficult to demarcate and secure. For e.g., transportation meshes with

telecommunications and food distribution, and these in turn are underpinned by the

energy and finance sectors61. The nodes and touch points are exponentially

interbreeding and increasing, leading to critical choke points across possibly

previously unconceived of locations. Google’s US$3.2 billion January 2014

acquisition announcement of Nest, manufacturers of IoT based home safety items

such as smoke detectors, underlines the importance of the industry in vivid terms.

IoT and the GCC

The IoT, along with Big Data, is proving to be a global phenomenon. As a key and

active component of the world economy, the GCC region will not be immune to the

impact of the IoT wave. In the GCC, the IoT phenomenon is expected to be fuelled

by the following two developments, mainly –

Focus on developing smart cities: In the GCC, the trend of linking smart cities

to the agenda of economic diversification is fast gaining ground, led by the Kingdom

of Saudi Arabia and the UAE. Saudi Arabia estimates that its new economic cities

will contribute about US$150 billion to the country's GDP by 2020, creating some

one million jobs in the process62. Smart cities are looked upon as opportunities to

diversify the economy away from oil, creating a knowledge economy and offering

citizens with opportunities for professional jobs.

In October 2013, the UAE announced plans to transform itself into a smart city63.

The Dubai smart city project would allow the public to deal with government

agencies and services using smart phones. The backbone of the Dubai smart city

effort will be high-speed wireless internet and fibre optic networks. With initiatives

such as the smart city strategy, Dubai could potentially create 27,000 jobs between

2013 and 2018, apart from generating economic value of about US$5.5 billion64.

58 Bloomberg 59 BBC 60 ITworld 61 Chatham House 62 Cisco Systems, Inc 63 Arabian Business Publishing Ltd. 64 Al Nisr Publishing LLC

With 2014 predicted to be

a pivotal and transformative year for

IoT, the issue of privacy and security is likely to

gain in prominence and

urgency, impacting corporate and consumer

behavior across the spectrum.

As a key and active

component of the world

economy, the GCC region will not be immune to the

impact of the IoT wave.



14

The Dubai smart city project runs principally along three tracks, namely – Smart

Economy; Smart Life; and Smart Tourism. Smart Economy deals with developing

efficient and effective private companies, government services such as ports, stock

exchanges, and jobs, through the use of IoT. Smart Life deals with education,

health, communications, public utilities, transport, and energy services. Finally,

Smart Tourism deals with offering a convenient and smart environment to tourists

on their visit to Dubai. Sensors and devices will be used extensively across the three

themes of smart life in Dubai, thus pushing the entire GCC region into a new orbit

of technology based economic initiatives that are in close contact with public life

(e.g., regulating parking lots)65.

Apart from the economic cities initiative in Saudi Arabia and the projects in the UAE,

there are smart city projects in Qatar, too. According to the technology research

firm, IDC, spending on smart machines in countries across GCC is expected to reach

US$224 million, a year-on-year increase of 19%.

Creative disruption spawns new markets: In many ways, the intersection of

intelligent machines, people and advanced analytics is unleashing creative

disruption across multiple industries. With the arrival of the internet age, many

industries underwent disruption, such as the newspaper industry. However, just as

the industrial revolution created new industries such as the automotive industry, the

intensification of the age of the IoT could herald completely new economic models.

With Gartner projecting the IoT market to be US$1.9 trillion by 2020, a slew of

industries, such as healthcare and transportation, are expected to see revolutionary

developments. With this opportunity, comes the possibility that a number of

technological and services SMEs could arise around the economic revolution. The

ability to stay connected to the world of commerce through smart appliances may

translate into a strong incentive for people to run their careers effectively from

home. Segments of the population such as the differently abled could benefit

greatly from such arrangements and may be able to increase their level of active

contribution to the national economy, thereby adding to the prosperity of the

nation.

Since the emergence of the digital age and the era of smart devices, it has been

observed that a number of technological start-ups have appeared in nations such as

the USA. The IoT could mark a boom time for SMEs in the GCC. The importance of

SMEs in GCC is manifold due to their power to add to non-oil revenues and due to

their ability to create attractive jobs for a young population66.

Assuming GE’s logic that the IoT age can at least herald a cost savings of 1% across

major industries, the following cost savings are estimated on an annual basis for the

GCC region.

65 Zawya 66 Arab News

According to the

technology research firm, IDC, spending on smart

machines in countries across GCC is expected to

reach US$224 million, a year-on-year increase of

19%.

The IoT could mark a boom time for SMEs in the GCC.



15

Table 1: Impact of 1% Cost Savings across Key Industries, GCC; Per

Annum

Industry

Current Market Size

(in US$ Billion)

Projected Annual Savings

(in US$ Billion)**

Oil & Gas N/A* 0.5***

Construction 150067 15

Retail 22168 2

Healthcare 4469 0.5

Insurance 1670 0.2

Note: *Oil & Gas market sizes cannot be easily estimated to a reliable degree of

accuracy due to a number of volatile factors involved, such as oil prices, etc.

** The figures have been rounded off to their nearest value

*** The cost savings has been calculated by estimating that about 60%71 of the

US$90 billion Oil & Gas industry cost savings, projected by GE, is attributable to the

GCC region.

Source: Markaz Research

Thus, even assuming a 1% cost savings due to IoT capabilities across five

industries, the cost savings per annum accumulates to about US$20 billion. Since

the scope of IoT is universal in terms of sectors and the cost savings opportunities

presented is immense and yet indeterminable, the potential cost savings could be

exponentially larger compared to the very conservative estimate above. In all, IoT is

expected to create a wave of massive changes in the GCC, in terms of spawning

centres of excellence in established industries and in creating new economic

opportunities for SMEs.

Big Data and its Applications

The use of data to drive strategic decision making, policies and programmes is a

distinct reality of the current phase of the rapidly evolving information age. The

internet has made data the ultimate arbiter in terms of decision making for

organisations, ranging from governmental bodies to private retailers.

It is estimated that the human race generates about 1.7 million bytes of data every

minute, or something equivalent to 360,000 standard DVDs72. The data comes from

a wide variety of sources in different speeds, volume and variety. Also, the data

comes from every imaginable source, such as sensors that are used to gather

information on the climate, social networking posts, digital videos and pictures,

records of purchase transactions, vehicle telematics, smart phone GPS, etc73.

In the new global age of exponential information, the need for meticulous

assimilation of that information for meaningful decision making is paramount.

Companies will no longer just compete across standard areas such as product or

services quality, supply chain efficiency, etc. These factors have reached a stage of

67 Saudi Gazette 68 Khaleej Times 69 Zawya 70 The Peninsula Qatar 71 Zawya 72 europa.eu 73 IBM

In all, IoT is expected to

create a wave of massive changes in the GCC, in

terms of spawning centres of excellence in

established industries and in creating new economic

opportunities for SMEs.

The use of data to drive strategic decision making,

policies and programmes

is a distinct reality of the current phase of the

rapidly evolving information age.



16

maturity wherein most successful companies appear standardized on them, leaving

little room for competitive differentiation and innovation. Companies of the future,

i.e., those that will succeed now and leave their peers behind are those that can

take unstructured information and decipher meaningful patterns out of them in

order to serve their markets innovatively. Failure to do so is a recipe for disaster.

Even sectors such as healthcare, are now open to creative disruption.

In the Middle East, and particularly in the GCC countries, Big Data will have an

important role to play. Large corporate houses and government services in the

Middle East can use the capabilities provided by Big Data to effectively predict

customer response to product launches, target new revenue streams through

identifying patterns of emerging customer demand, detect financial fraud in real

time, etc. According to the research firm, IDC, in the Middle East, most of the

activity around Big Data is driven by investments on business intelligence (BI), with

about 35% of CIOs in the region having invested in the activity in 2013. Also,

analytics is showing an uptick in demand in terms of Big Data requirements74.

Across the Middle East, Big Data is being dubbed as the “new oil”75 as the region

moves aggressively into developing itself as a knowledge economy zone.

The rest of this paper discusses key application areas for Big Data across several

industries.

Retail Banking

In the retail banking industry, the use of data for various tasks such as screening

applications for credit risks and checking of transactions for fraud is common

practice. Banks do not need to be convinced of the power that lies within their

enormous data sets. Thus, though the concept of Big Data is not new to banking

circles, what is indeed revolutionalising the retail banking space is the increased

absorption of analytics and Big Data for driving customer retention and profitability.

According to a 2012 Ernst & Young (E&Y) survey, substantial numbers of banking

customers, globally, are considering changing their bank. Customers planning to

swap banks grew to 12% in 2012 from 7% in 2011, worldwide, according to the

E&Y report.

For retail banks, a very significant advantage that can be derived from Big Data is

the development of a 360-degree view of their customers at a highly granular and

individual level. For instance, Spain’s largest domestic bank, CaixaBank, chose

Oracle for deployment of new Big Data capabilities76. For the Spanish bank, the

implementation of Big Data capabilities will allow it to develop a 360-degree view of

its customers, by integrating data coming from numerous touchpoints such as

internet, offices, ATMs, phone banking, etc. According to CaixaBank, the Big Data

architecture will allow information recorded across various channels or sources to be

able to immediately correspond and talk to each other, letting the bank to develop

predictive models and helping drive new sales opportunities with respect to existing

customers.

74 ITP.net 75 zawya 76 Integration Developer News

In the Middle East, and

particularly in the GCC countries, Big Data will

have an important role to play.

For retail banks, a very significant advantage that

can be derived from Big Data is the development

of a 360-degree view of

their customers at a highly granular and individual level.



17

Big Data offers banks the distinct advantage of taking into consideration information

from sources such as social media posts and emails, which do not fit into traditional

or conventional databases. Big Data can help analyse internal bank data records in

correlation with hitherto unconventional sources of information (such as social

media posts) in order to better predict customer behavior and causation. For

instance, the USA based Bank of America (BoA) used Big Data analytics to

understand why its commercial customers were choosing to move to smaller banks.

Using data obtained from the company website, call centre logs, customer interview

transcripts, etc, the company realized that the customers found BoA’s end-to-end

cash management portal highly rigid. This insight enabled BoA to change its product

strategy and introduce the more flexible online offering, Cash Pro Online, in 200977.

In the GCC region, too, Big Data appears to be gaining strong tail winds. According

to the research firm, IDC, 40% of Chief Information Officers (CIOs) in the Middle

East initiated investments in Big Data technologies and analytics in 201378.

Moreover, regulation, compliance and governance reporting and requirements are

forcing the hands of players in GCC to adopt investments in Big Data. Retail banks

in the region will be no exception to this trend. In fact, the banking industry will

likely be driving the trend. This is largely due to the fact that banking security,

especially in terms of online banking and fraud, has traditionally been an area of

concern in many GCC countries. Big Data enabled outlier detection in customer

online banking patterns can act as a powerful tool in tracking and neutralizing

fraudulent activities in real time79.

For retail banks, Big Data promises extensive benefits, from new customer

acquisition to containment of customer churn and attrition. As GCC countries

attempt to forge their respective positions as financial and entrepreneurial hubs, the

need to derive maximum advantage from large data sets will only keep increasing.

Insurance Industry

It is estimated that by 2020, the use of unstructured data (e.g., social media,

videos, etc) will complement and add to the analytical power of structured data,

thus empowering insurers to make more surefooted strategic decisions80. The

exponential growth of internet connected sensors and devices, projected to reach

50 billion by 2020, will have a deep impact on the availability of dynamic real-time

information. Insurers who are able to exploit this fluid and insightful information for

conducting better pricing decisions, loss control and underwriting will greatly

increase their competitive advantage.

Advances in cloud computing greatly supports the aggregation and economical

storage of large amounts of data, which can be collected from machine-to-machine

(M2M) applications and mobile devices81. In terms of the insurance industry, such

collected information can be curated, mapped and conjoined with data emanating

from other sources, such as actuarial models, in order to calculate risk and even

perform predictive forecasting of probable events. For e.g., usage-based insurance

77 The Wall Street Journal 78 IDC 79 SmartData Collective 80 PwC 81 Verizon

In the GCC region, too,

Big Data appears to be gaining strong tail winds.

It is estimated that by

2020, the use of unstructured data (e.g.,

social media, videos, etc) will complement and add

to the analytical power of structured data, thus

empowering insurers to

make more surefooted strategic decisions



18

(UBI) systems make available almost real-time insights into driving habits and

vehicular patterns of customers, along with associated risk levels. This information

coming from vehicle sensors is supplemented by additional information in a cloud

computing environment and then analysed. The analysis, thus, helps insurers to set

premium rates customized to individuals and their level of personalized risk.

The trend of personalised insurance, through study of data gained from the

individual and their environment, is an increasingly prominent one in the insurance

space. In the future, highly personalized health insurance policies may be the norm,

through proactive healthcare monitoring or the practice of monitoring of vital health

signs from a multitude of data sources to identify the health status of an individual

to a level closer to the accurate state. In the recent past, Big Data has been finding

a lot of tangible applications in the insurance industry. For instance, many players in

the life insurance industry use Big Data for the following82 –

Agent recruitment and retention.

Underwriting/application triage.

Claims management/fraud detection.

Target marketing/enhanced customer segmentation.

The insurance industry is expected to go through a substantive growth phase in the

GCC in the short-term. By 2017, the insurance market is expected to total about

US$37.5 billion, with tail winds such as growing population, increased life

expectancy, etc83. However, incidences of insurance fraud are also on the rise in the

industry. It is estimated that the health insurance industry may be losing over US$1

billion per year on average, due to fraud or abuse84. With increasing immigration

into the region, instances of insurance fraud are likely to be a persistent problem.

Thus, the use of tools such as Big Data to track and model behaviours of customers

is a valuable asset to offer cost effective and profitable solutions.

Investment and Asset Management Industry

The American investment banking company, Morgan Stanley, makes use of Big Data

in its portfolio analysis programme85. It is estimated that British investment banks

spend about 4% of their gross operating margin on Big Data R&D86. UBS, the

Switzerland based bank, uses Big Data as part of its environmental, social and

governance (ESG) programme, in terms of protecting itself from doing business with

clients with a track record of environmental or regulatory malfeasance87. In essence,

Big Data is reaching the mandatory adoption threshold across many investment

banks and becoming an integral part of doing business.

The Big Data capabilities that UBS has implemented will allow it to safeguard the

bank’s reputational risk profile by avoiding or at least minimizing the risk of doing

business with clients or vendors with a record, probably not easily detectable, of

faltering on core corporate principles (e.g., illegal logging, usage of child labour,

82 The Actuary 83 bqdoha.com 84 Emirates 24/7 85 Forbes.com 86 Infosys 87 American Banker

In the recent past, Big

Data has been finding a lot of tangible applications

in the insurance industry.

In essence, Big Data is

reaching the mandatory adoption threshold across

many investment banks and becoming an integral part of doing business.



19

etc). The utilization of Big Data in yet unseen formats for driving operational

excellence is a distinct possibility. For e.g., in September 2013, the four large global

investment banks - Goldman Sachs, JPMorgan, Credit Suisse and Barclays, signed a

memorandum of understanding to construct a data storage platform envisaged to

act as a centralized library for holding a collection of key client data88. The

centralized service, which will be run by the US based Depository Trust and Clearing

Corporation, is expected to be positioned to provide on-demand reference data on

clients, broker-dealers, hedge funds, etc, so that regulatory compliance and client

background checks are streamlined and extremely reliable.

As incidences of tax evasion, misrepresentation of mortgage-backed securities,

money laundering, etc, increases, the centralized data platform is a form of Big Data

capability to enforce compliance and thereby reduce potential compliance costs for

banks in the form of fines. For instance, JPMorgan agreed to pay the US

government-backed housing finance behemoths, Fannie Mae and Freddie Mac,

US$5.1 billion to settle claims for bad mortgages sold to them in the years leading

up to the 2008 financial crisis89. As investment and asset management banks deal

with very large data flows and information sets that are collected from various

sources and utilised independently by several parts of the organisation, there can

often be no unified clarity on data status and the areas of its potential use. Also, the

risks of making grievous errors and breaking of compliance regulations too can be

high if a unified singular picture of the business is not available. Thus, Big Data will

increasingly be the arm of banking decisions, both in terms of increasing profitability

and adhering to ever growing compliance requirements.

In the GCC, large infrastructure investment projects are being powered by oil

income, which are in turn used to drive short-term growth in the quest for economic

diversification. Also, investment banks and asset managers, in the GCC, are coming

under increasing scrutiny since the 2008 crisis, with questions being raised around

corporate governance and transparency. Thus, any stutter in ensuring full

compliance with existing regulatory norms or doing business with parties considered

below the radar of reputational respectability may invite severe risks for investment

bankers and asset managers. Thus, Big Data is expected to enjoy robust uptake in

the GCC investment banking and asset management space. Also, with reports that

GCC banks are being targeted by fraudulent operations once every 14 seconds,

investment and asset management banks, too, will sense an increasing urgency to

undertake every action possible to protect their data90. Big Data is likely to be used

in this context as a tool of advanced analytics to identify and detect trends of

malicious behavior.

Retail Industry

The retail market in the GCC is expected to reach US$221 billion by 2015, growing

at an annual rate of approximately 8% from 2012 through 201591. It is well known

that online retailers like Amazon have been making use of Big Data capabilities to

drive sales and profitability. Increasingly, traditional brick and mortar retail stores

88 ft.com 89 CNN 90 Booz Allen Hamilton 91 Saudi Gazette

The utilization of Big Data

in yet unseen formats for driving operational

excellence is a distinct possibility.

Thus, Big Data is expected to enjoy robust

uptake in the GCC

investment banking and asset management space.



20

too are turning towards Big Data to boost profitability, which is usually under

immense pressure in the retail industry92.

In the retail industry, Big Data helps in the key objectives of understanding

customer buying behaviours and in developing effective marketing promotions. The

American retailer, Macy's, until very recently, utilized Excel spreadsheets to analyse

a plethora of customer data. With the recent introduction of Big Data analytics

software by Macy’s, the company brought in the capacity to analyse extremely large

data sets, including external sources such as Twitter feeds and social media posts93.

Macy’s reports that introduction of Big Data capabilities has allowed it to boost store

sales by 10%.

A singular advantage that Big Data offers traditional retailing is the ability to drive

the entire sales model on data. Experts predict that this trend is likely to help

traditional retailers push back against the encroachment of e-commerce, principally

through exploiting analytics to generate experiences that cannot be replicated or

created online. Big Data is all set to encompass the retail shopping environment in

order to cater to the distinct needs of individual customers. For instance, in store

cameras can monitor the aisles that an individual visits, the items picked up or

explored and those items that were eventually purchased. All these information

would be fed into the data analytics system of the retailer, which will in turn

produce insights for customized marketing in terms of surfacing before the

particular customer the products that are most likely of use or personal value.

In the current retail environment, customers have access to unprecedented choice,

which has cast pressure on the traditional power of loyalty. In the bid to maximize

sales opportunity, wherever available, retailers are increasingly focusing on

personalizing the entire process. This has indeed led to a new revolution in the retail

shopping space, from retailing to the concept of “me-tailing”94. The evolution to me-

tail means that the retail experience is now all about automated personalized

shopping that makes use of data and information from every source to enhance

customer communication and for creating the subconsciously desired shopping

ambiance.

With respect to the GCC, the retail sector has consistently attracted high levels of

investment; and is buoyed by growing consumer confidence and increasing

population levels. Though Big Data at the level (e.g., studying facial expressions)

practiced by American or European retailers is heavily likely to invite concerns on

privacy in the GCC region; there is evidence that enhanced data analytical

capabilities will be welcomed as a useful step in the direction towards understanding

customer purchase decisions. As retailers grapple with wafer thin profit margins and

growing supply chain complexities, any avenues for enhancing customer loyalty and

reducing costs are likely to be adopted. A recent research by the consulting firm,

Bain & Company, found that companies that were ahead in the curve in terms of

adopting Big Data were twice as likely to find themselves in the top quartile of

financial performance with respect to their industry peers. With more global brands

92 Forbes.com 93 CNBC 94 Accenture

In the retail industry, Big

Data helps in the key

objectives of understanding customer

buying behaviours and in developing effective

marketing promotions.

As retailers grapple with

wafer thin profit margins

and growing supply chain complexities, any avenues

for enhancing customer loyalty and reducing costs

are likely to be adopted.



21

and retailers entering GCC, the harvest of Big Data is likely to be reaped in the

region, as well.

Law Enforcement

Big Data analytics has debuted into the way policing is conducted in several cities in

the US and Europe. In what is a rapidly developing trend, Predictive Policing uses

Big Data capabilities in terms of marrying computer models and extensive prior

crime and environmental data95. The police are now using predictive analytics to

anticipate and forecast where and what sort of crimes may soon be committed. For

example, police in Fort Lauderdale (Florida, USA), have enlisted IBM in order to

harness data to better fight crime96. The Fort Lauderdale Big Data policing project

involves analyzing a variety of data coming from sources as varied as emergency

police call records, special events information, crime data, public transportation

routes, construction activities, previous criminal incidents, etc. The data is then

analysed using a advanced analytics, including pattern recognition, anomaly

detection and causality analysis.

Predictive policing is being considered a major success in the USA, where the

concept first took root and was tested. For e.g., in its first year of using predictive

policing, the Santa Cruz (California, USA) police department reported drop in

assaults by 9% with robberies down by a staggering 27%. Meanwhile, auto theft

recoveries increased by 22%97. Big Data based security systems and policing is

expected to spread rapidly through multiple continents. There are plans afoot in

Europe to combine predictive and analytical technologies with extant video

surveillance systems. Dubbed as the INDECT project (Intelligent information system

supporting observation, searching and detection for security of citizens in urban

environment), it aims to develop tools and solutions for threat detection through

automatic means98. For e.g., the computers would sift through extremely large

quantities of real-time video streams and trigger alarms around potential

disturbances to the police forces, such as a massive sports event where a violent

outbreak appears likely.

The GCC is seeing a number of spectacular infrastructural investments and is

expected to host many upcoming centerpiece global events (e.g., the 2022 FIFA

World Cup in Qatar). The GCC countries are expected to invest over US$1.1 trillion

to US$2 trillion in infrastructure projects in the short-term99. With such large

investments and reputation at stake, the need to ensure security for the society is

vital in terms of sustaining the business as usual mode. Also, in the GCC, the issue

of security is receiving serious consideration, as evidenced by the ratification of the

GCC security treaty by the Kingdom of Saudi Arabia in September 2013100. The

treaty is paving the way for exchanging information and expertise necessary,

among the GCC countries, for maintaining and upholding security. Such initiatives

can thrive better in a Big Data environment, where information sharing and security

analytics can be conducted more effectively and efficiency, in real time.

95 The International Association of Chiefs of Police 96 GCN 97 Al Jazeera America 98 INDECT 99 The Wall Street Journal 100 Al Nisr Publishing LLC

Big Data analytics has

debuted into the way

policing is conducted in several cities in the US

and Europe.

Also, in the GCC, the issue

of security is receiving serious consideration, as

evidenced by the

ratification of the GCC security treaty by the

Kingdom of Saudi Arabia in September 2013



22

At the 32nd meeting of the GCC interior ministers held in Manama (Bahrain) in

December 2013, it was agreed to create a unified GCC police force, the GCCPOL, to

enhance regional security through tackling crime and deterring security threats101.

The GCC region is a source of income for millions of expatriates, with remittances

flowing from the region to various parts of the world. Approximately US$50 billion is

sent as remittances from the GCC by expatriate workers102. Thus, the GCC is a large

remittance outflow zone. Studies have shown that there is a strong link between

unstructured and ill documented money transfers and organized crime103. Big Data

capabilities can help law enforcement authorities in the GCC region to correlate

money transfer patterns and agents in real-time through sharing information across

the financial transfer network. This will help in quicker identification of individuals

and groups associated with organized crime such as drug trafficking. Thus, Big Data

predictive policing has a good scope for implementation in the GCC region.

Healthcare

The healthcare field is one that is awash with critical data, with information doubling

every five years104. About 80% of a hospital’s data is captured across unstructured

platforms such as registration and discharge forms, doctors’ notes, phone calls,

MRIs, x-rays, etc105. However, Big Data appears to have made a significant entry

into the field of healthcare. For e.g., in December 2012, the British government

announced plans for Big Data enabled DNA code sequencing of 100,000 patients in

order to develop effective personalized care for Cancer patients.

Big Data in healthcare is finding diverse and hitherto unimagined applications. For

instance, the Durkheim Project, which is a collaborative effort between Patterns and

Predictions, a USA based predictive analytics firm, and Veterans Education and

Research Association of Northern New England (USA), analyses real-time data from

social posts to identify military veterans who might be at risk of suicide106. It is

highly probable that in the not too distant future, healthcare providers may use

such capabilities to aid and serve patients who feel vulnerable.

In comparison with industries such as retail, healthcare organizations have proved

to be sluggish in terms of adopting Big Data strategies. However, the growing

importance of incorporating electronic health records, new medical payment

reimbursement models and the profusion of smart medical equipment that can talk

to each other have all necessitated the ability to integrate disparate pieces of data

from multiple, sometimes appearing random, sources to produce a coherent unitary

picture. Estimates put 80% of patient information as unstructured in nature, which

means that it has been traditionally difficult to mine them107. This has resulted in

problems with respect to pursuing sensitive tasks such as clinical trials, due to the

inability to develop a consistent data set over time. However, Big Data is providing

solutions in such high cost areas. For e.g., Merck, the American pharmaceutical

giant, announced a partnership with the Israeli health agency, Maccabi Healthcare

101 Times of Oman 102 bqdoha.com 103 World Bank Group 104 Washington Post 105 Ibid. 106 NBC News 107 Attunity

Studies have shown that there is a strong link

between unstructured and ill documented money

transfers and organized crime

In comparison with

industries such as retail,

healthcare organizations have proved to be

sluggish in terms of adopting Big Data strategies.



23

Services, in terms of using the latter’s extensive data set to track, study and analyse

disease progression and effectiveness of medication over the lifetime of a patient108.

Failed clinical trials usually cost billions for pharmaceutical companies.

Reports indicate that the risk of non-communicable diseases (NCD) is growing in the

GCC on the back of economic advances that generally fuels a sedentary lifestyle.

The economic burden of NCD in the GCC is expected to exacerbate with costs to

governments reaching about $68 billion in the region by 2022. There is already

concern that the welfare state model may not be a feasible one in the long term

horizon for GCC countries such as Kuwait109. Thus, the issue of exploding healthcare

costs will come as a force multiplier in terms of the pressure on long term

governmental spending capacity. The use of Big Data to identify effective

personalized care that comes at a lower cost is a robust proposition that the GCC

authorities are likely to find highly attractive. Big Data in GCC healthcare is a key

trend that will influence how the industry is operated and governed. However, given

the extremely sensitive nature of private health data, the adoption of Big Data in

healthcare applications across the GCC may face headwinds on strong privacy

concerns.

108 InformationWeek 109 Thomson Reuters

The economic burden of

NCD in the GCC is expected to exacerbate

with costs to governments reaching about $68 billion

in the region by 2022.



24

Appendix

Case Study – Big Data and Gulf Air

Gulf Air is the national flag carrier of the Kingdom of Bahrain. The airline had

recently embarked upon a strategy of restructuring, which involves reshaping and

optimizing its portfolio of routes. Even as the airline was paying rapt attention to the

process of transforming itself into a commercially profitable enterprise, realization

was growing that social media posts about the airline was a rich source of

information that could help in sentiment analysis that may, in turn, lead to

compelling business insights.

Social media posts are unstructured qualitative data that are painstaking to track,

and furthermore, it is usually extremely difficult to draw tactical insights from them

in terms of guiding operational strategies. In the case of Gulf Air, 80% of the social

media posts were in the language of Arabic, which necessitated capabilities in terms

of performing Arabic sentiment analysis. Gulf Air took a conscious decision to not

outsource their Big Data needs to external vendors; but instead, a small team of

close to half a dozen people was set up to undertake a part-time assignment on Big

Data.

The team was deputed to attend several seminars on Big Data and intense research

on the topic was conducted, with the project team scanning and analyzing multiple

software platforms for their specific needs. The IT department had decided to make

public the results of the experiment, only if the outcome was successful, as there

was no clear proof of concept to illustrate before senior management beforehand.

The project team, after a period of research and self-learning, decided to opt for

Cloudera’s Apache Hadoop-based software. An open-source framework, Apache

Hadoop allows enterprises to process massive amounts of data, irrespective of their

structure, at costs that are much lower in comparison with outsourcing to large IT

vendors. Though Hadoop is credited with driving the adoption of Big Data, the

challenge remains that the Hadoop platform choice is not supported by the vendor

beyond certain prescribed levels.

Thus, the Gulf Air part-time project team had to drive their understanding and

implementation capabilities on a self-learning basis, leading to a period of a year

before the solution went live. The greatest challenge that the team faced was

getting the system to assemble or compile all the various Arabic dialects and slangs

that constituted the language, so that the software could make sense or understand

the social media posts and then translate them into the English language. The

solution was a resounding success, which ultimately led to Gulf Air winning the 2013

award in the category of Big Data Solution Project, from among hundreds of entries,

at the renowned IT expo, GITEX Technology. Gulf Air’s success is very noteworthy

in the context that an open-source software was adopted by an in-house team,

which led ultimately to considerable cost savings and development of rich internal

competencies.



25

Case Study – Big Data and Royal Dutch Shell plc

Royal Dutch Shell plc (or Shell) is a global energy and petrochemicals group that

ranks among the top global companies in terms of yearly revenues. In early 2013,

the global media reported extensively on Shell’s new drill ship, called the Noble Bully

I (NB1). NB1 is a new type of drill ship that does not look like a standard vessel of

its genre. The main purpose of the ship is to help extract oil from otherwise

inaccessible depths of the ocean. NB1 is used in Shell’s strategic Mars field, located

at the Gulf of Mexico, USA, at a depth of 914 metres (or 3,000 feet). More

specifically, NB1 is used at the Mars B field development, drilling wells for a new

platform called the Olympus tension leg platform.

The Mars B field project uses a newer generation of sensors that pick up

exponentially more data over the previous generation. It is here that Shell has been

able to make use of advances in Big Data capabilities. The data coming from the

sensors are analysed utilizing Shell developed artificial intelligence tools. The data is

then converted into 3D and 4D maps of the oil reservoirs. Then, the data is

analysed by Shell scientists who are based onshore, and the completed

visualisations are made available to the drill ship crew.

The use of Big Data analytics in conjunction with imaging technologies is enabling

Shell to map out and extract oil from previously unmapped or uncharted oil and gas

fields. It is notable that these energy fields are locked in shale and tight rock

formations, located deep under the floor of the ocean. Prospecting for energy within

shale and tight rock formations is an extremely expensive exercise. Thus, the

precision with which reservoirs are identified by Big Data enabled analytics is

proving to be a great boon for companies like Shell, in terms of reducing the cost of

trial drilling. Statistics reveal that the average cost to locate and produce a new

barrel, globally, has risen to US$27 in 2011 compared to US$6 in 1998110. But in

the case of America, an early mover in adoption Big Data analytics for the energy

industry, the cost has actually dropped to the US$7- US$15 range111, marking a

remarkable progress in operational efficiency.

110 BioAge Group, LLC. 111 Institute for Operations Research and the Management Sciences



26

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