ICT Service Project Proposal

Fikre Y. Wondimu

In association with:

Amaha Bekele

Dagmawi Lemma

July 12, 2011

Application Hosting

Service

Agenda

Project Objective & Scope

Overview Application Hosting Service

The Rationales (ICT Park)

Roles (Private Partner & Government)

Situation, Cost & Benefit Analysis

Recommended mode of Engagement

Initial Investment Cost

Starting Point

1. Ethiopia’s ICT Park

Provide resources, efficient infrastructure and other

incentives to encourage the development of ICT

related businesses.

Facilitate the ICT development in the country.

Provision of One-Stop-Shop for ICT related services.

Reduce unemployment.

Play significant role in the development of ICT Private

Sector.

1st Phase planed to be completed as early as 2012.

The Project

Application Hosting

Service

Can it be provided by the

ICT Private Sector now

prior to the commissioning

of the ICT Park ?

What is it ?

Passport application

Application Hosting Services:

Also referred as:

Application Service Provision (ASP)

Cloud Computing (CC)

Software-as-a-Service (SaaS)

It is a business model for enabling convenient, on-demand

network access to a shared pool of configurable

computing resources such as software and storage.

Project Objective & Scope

Project Objective

To identify and study an ICT Service Project for the

Private Sector which has a potential to fit ICT Park

rationales and start now prior to commissioning of

the ICT Park.

Project Scope

Within the context of the objective:

Identify ICT Service Projects

Conduct feasibility study.

Prepare Project Proposals.

Study Approach

Passport application

G A P

National E-Government Strategy

Public/Private Business Needs

Citizens Service Needs

Feasibility for ICT Service Projects – Application Hosting Services

National

Development

Agenda

ICT4D

Current

State(Current

Services)

Target

State(ICT Enabled

Services)

The Situation – Current State

Passport application

Summary of Findings:

The provision of Application Services for Government,

Non-Government and Business Institutions on the

basis of Software-as-a-Service or as an Application

Service Provider model is currently non-existent.

Reasons:

Slow development of the ICT Business Sector.

High Cost of Communication Bandwidth.

Regulatory issues.

Lack of incentives from the Government.

Low inward investment in the area of ICT

The Future State

Passport application

Potential ICT Services:

Provision of online and real time Generic ERP

Systems Solution (Only software-as-a-service).

Industry Specific Software and Database Services

(Hotel, Hospital, Inventory, POS and Billing).

Web Hosting Services.

Messaging and Collaboration Service

Storage Service.

Media streaming (Could also be on-demand).

Disaster Recovery Service.

Cost/Benefits – Win-Win

Passport application3. Business Sector/NGo

ICT Private Sector (Investors/Service Providers)

Costs Benefits

Moderate Investment Reliable Business

Operational Costs Sustainable Income

Government (e.g. MCIT)

Costs Benefits

Bandwidth cost subsidy Avoid PM headaches and failures

Cost only for services Job Creation

Revenue from Taxes

Public/Private Businesses/NGOs (Service Receivers)

Costs Benefits

Services charges only Zero Investment & Ops. Cost

Avoid PM headaches

Zero Upgrade Costs

Citizens (Service Receivers)

Costs Benefits

Reasonable service charges Efficient Service

Convenience

Potential Market

Passport application

Government (Provision of E-Government Services)

Public (የመንግስት ልማት ድርጅቶች) and Private Enterprises

Financial Institutions (Banks, Insurances, etc..)

Educational Institutions (Government and Non Gov.)

Health Institutions (Government and Private)

Citizens at large

The Architecture

Stakeholders

Passport application

1. Private Sector:

Software Developers

System Integrators

Hardware Vendors

Network Infrastructure Developers

2. Government:

Federal and Regional Governments (Health, Edu., Agri.)

MCIT – E-Government Service Projects

Public Enterprises

3. Private Sector and NGOs:

Schools

Health Institutes

Wholesale and Retail Businesses

Financial Institutions

NGO’s

4. Citizens:

Mode of Engagement

Recommended Mode of Engagement:

1. Public Private Partnership

It is a contract between a Private Sector Entity and

a Government body that call for the Private

Partner to deliver a desired service and assume

the associated risks.

2. PPP Rationales

Cost & Risk Sharing

Improved Levels of Service (Innovation, better management)

Provision of Highly Qualified Professional Skill Sets

Enhancement of Revenues

Efficient Implementation

Economic and Social Benefits

PPP Modalities

Contract License (Outsourcing)

A Government contracts with a private partner to provide and/or maintain a

specific service.

Build Own and Operate (BOO)

The Private Sector or a Consortium designs, builds, and operates a facility or

service delivery over its lifetime. Providing high speed Internet connectivity to the rural areas

may be a good example,

Build Operate and Transfer (BOT)A Private Entity or consortium designs, builds, and operates a facility or service

delivery for a certain period of time, after which the Government takes over the

facility or service delivery and knowledge and operational responsibilities are

transferred to the Government. The model is used in various E-Government and other

infrastructure projects

Build Own Operate and Transfer (BOOT) - Extended version of BOT

A Private Entity or consortium designs, builds, own and operates a facility or service

delivery for a certain period of time. Under this model the ownership and management

belongs to the Private Sector until a specified time.

Others : Build-rent-own-transfer (BROT), Build-lease-operate-transfer

(BLOT) , Build-transfer-operate (BTO)

Investment Responsibility Trend

Design and BuildBuild, Operate &

TransferJoint Venture

Contract License

(Operate &

Maintain)

Lease

Agreement

Full

Government

Venture

Increased Investment Responsibility of the Private Sector

Complete

Private Sector

Initiative

Build, Own,

Operate &

Transfer

Build, Own &

Operate

Application Service Provisioning

Passport application

Description of the Service PPP ModelApplication Service Provisioning Service targeting Public and

Private Enterprises to automate their business processes by

providing Software-as-a-Service to speed up software

implementation time and avoid risk of failures.

BOO

BOT

Features:

Online application and database enablement services

Storage, Backup and Recovery service.

Web Hosting and Content Management services.

Project and operational management services.

Messaging and Collaboration Services

Media Streaming Services

Disaster Recovery Services

Application Service Provisioning

Passport application

Investment Cost

Description of Requirements Cost

(ETB)1 Datacenter in a box solution with 12 Blade Servers,

Storage and Switches

2,800,000

2 Routers and other Communication Equipment 300,000

3 Application Software (HRM, Financials, Inventory

Management and Others…)

4,300,000

5 Project Management 1,450,000

6 Pilot Testing and Commissioning 200,000

7 Office Furniture and Equipment 300,000

8 Office and technical administration setup 200,000

9 Contingency at 10% 955000

Total Investment Cost to Private Sector 10,505,000

Total Operation Cost 1,185,600

Venturing Risks

Shortage

of Skilled

HR in ICT

High

Investment

Cost

Invest in

Training

Quality

Pays

At Last

New startup and slow business momentum

Strong marketing strategy for the Service to be rendered

Reduced

Bandwidth

Rate

High

Bandwidth

Cost

The MitigationBusiness

Closure

Roles

Passport application

Private Sector (Partner)

Access to private finance.

Organize, build and operate the required business.

Render exceptional service.

Employ innovative approaches.

Government (MCIT)

Promote private investment to server public interest

Guide, control, regulate and monitor ICT Service

Projects

Motivate private investment (eg. reduction of

bandwidth cost, even tax holidays)

Success Factors

Passport application

Private Sector (Partner)

Investment should consider procurement of quality

equipment and accessories (no compromises).

Developing required skill sets.

Provision of superb service.

Enough fund to cover operational costs.

Ability to market ICT service products.

Government (MCIT)

Assist the Private Partner in securing the businesses

(regulatory hurdles)

Bandwidth subsidy may be necessary

Provision of E-Government Services Projects to

Private Partner

Other Considerations

Passport application

2. Cost Recovery

3. Social & Economical Impact• Creates Jobs

• Develops ICT Private Sector

4. Other Countries’ Experience

1. Source of FundingPrivate Partner in Collaboration with MCIT

Service & Hosting Charge

Thank You !

Now Brainstorming

Session