An old story leading to the shiny and new

How long has IBM been in Saudi Arabia, and in what areas? Is it the biggest market for you in the GCC? How does it rate for you in terms of business incentive?

IBM has been operating in the Middle East and in Saudi Arabia since 1947. We have been supporting customers in the public sector and private sector for many years across all industry verticals such as banking, utilities, telecom, oil and gas, education, government, etc.. During this time we have been involved with many universities in the kingdom, such as King Abdullah University of Science and Technology (KAUST) and King Abdul Aziz City for Science and Technology (KACST) where we have projects in key areas such as voice recognition and the open-source operating system Linux.

Saudi Arabia is the biggest market in the GCC, and represents an important piece of IBM's business in the region. It has been rightly commended for the huge steps taken to become the most investor-friendly country in the region. This growing momentum and recognition of its economic transformation mean that in just three years Saudi Arabia has risen from 67th to 23rd position in the World Bank's Ease of Doing Business Index 2008.

What have been the company's investments in the country? Would you describe IBM's strategic investment plans for Saudi Arabia, going forward, and involvement in the higher education sphere?

We have been investing significantly in Saudi Arabia. For example, last autumn IBM and KAUST announced a joint research project to build and conduct research on the most complex, high-performance computing (HPC) system in the region. In June this year, the computing system, named Shaheen, became the most powerful supercomputer in the Middle East and the 14th most powerful supercomputer in the world, according to the TOP500 List of Supercomputers.

Shaheen was developed to serve the university's scientific researchers across dozens of disciplines, advance new innovations in computational sciences, and contribute to the further development of a knowledge-based economy in Saudi Arabia. It is also designed to be one of the most energy-efficient supercomputers globally, which is consistent with KAUST's high environmental standards.

IBM has also been involved in some groundbreaking R&D projects at both KACST and KAUST, such as in the emerging field of nanotechnology.

Is the bulk of IBM's investments in the government sector? How are investments apportioned between government and the private sector?

We have a relatively even split of projects between the government and private sector, and will be looking to keep it that way, as that makes the most business sense. However, the government projects of course are more in the public eye. For example, earlier this year IBM announced that it had completed the deployment of a technology infrastructure that will modernise the delivery of government services for the kingdom.

The multi-year eGovernment Service Bus (GSB) project delivers the core communication and security infrastructure for the Yesser eGovernment Programme, the kingdom's long-term modernisation of all government services. This programme will eventually provide everyone in the kingdom with access to government services from any place and at any time, replacing the current system of time-consuming, manual processes.

What were the challenges in working on such a project? Going forward, what other opportunities might there be in the government sector?

One of the key challenges with e-Government projects is integration. You cannot address one government service in isolation relative to the others — it is essential that everything works together. Take for example a modern city. The inter-relationships between the various systems operating in a city mean that solving problems in just one system is not a viable long-term option. City infrastructures that deliver vital services — such as transportation, health care, education, public safety, energy and water — must sense and respond intelligently and in a coordinated way. However, while representing a challenge, this also represents a huge opportunity for modern governments with advanced technologies, enabling them to transform urban life and deliver sustainable prosperity to their citizens.

What has been the biggest test presented by the credit crisis from your business perspective?

Saudi Arabia has been one of the countries less affected by the global economic crisis, and, with the huge investments that the government have been making into the country's infrastructure, the economy has stayed relatively buoyant. However, one of the biggest challenges in this environment is getting companies and governments to understand the opportunities as well as challenges before them. The recent financial crisis, along with other 21st-century problems, started to wake us up to the reality of global integration. This new level of global consciousness has handed our political and business leaders a mandate for change.

With computational power now being put into things we wouldn't recognise as computers, any person, any object, any process or service and any organisation — large or small — can become digitally aware, connected and smart. This gives us a huge opportunity to drive transformation across multiple sectors: health care, transportation, utilities, supply chain, banking and many more.

Many leaders are rising to this challenge with stimulus programmes that are aimed at not only driving economic recovery, but also laying the foundations for a ‘smarter' planet.

But much more work has to be done here, and we're working with leaders in public and private sectors to help them to drive this transformation.

Have investments slowed down, with IT budgets being cut?

Private and public sector spending has not necessarily slowed, but has definitely come under further scrutiny. While many have been struggling, there are a number of companies who have been able, through strategic plans, not only to survive but to thrive through the downturn by focusing on the value that is already within their organisations.

In the recent IBM CIO Study we saw that many CIOs (chief investment officers) across Middle East and North Africa (Mena), including Saudi Arabia, see this is an opportunity to innovate, and work smarter, connecting the disparate systems in their organisations to position themselves in such a way that they can and make use of the valuable data that they have within their organisations — using business analytics tools to identify trends and win new customers as well as to offer better service to existing customers.

Various reports suggest that the number of technically-trained Saudi personnel has been miniscule. Is skills shortage a problem that you face?

Finding the right person with the right skills is a challenge globally, not just across Mena, and indeed there is a strong focus on this area in Saudi Arabia. One of the country's strongest advantages and incentives for foreign investment is its people. The majority of Saudi Arabia's population is young, with 57 per cent of the country under 25 years of age. The government is investing billions of dollars in education, from elementary right through to higher stages, in order to train the next generation into a highly-skilled workforce.

The work that KACST and KAUST are doing is very exciting. Their R&D and supercomputing projects are attracting jobs, and creating a new culture of advanced education.

Are the majority of your personnel from overseas? How much of a problem is attracting talent to the country, given its cultural conservativeness? Does that mean paying higher salaries, which affects your margins?

Saudi Arabia is known for its conservative culture, but this doesn't make it any more of a challenge than the other countries in which we operate. IBM has a culture of integrating and leveraging the local strengths with our international heritage.

I think that people look at opportunities for development no matter where they are based or wish to be based, and the opportunities to be part of huge and complex projects are very attractive in the kingdom.

Saudi Arabia is a growing economy, and the government and many companies in the public sector rightfully see IT not just as the infrastructure to run a business but the business itself — as an enabler.

This is a great breakthrough, enabling us to have meaningful and intelligent conversations with clients, customers and partners on how to make their business work smarter.

All of this is creating an environment where there are huge opportunities to undertake very large transformational projects, and as a result we need to keep investing in our people on the ground.