BUSINESS
REVIEW

ENTERPRISE Enterprise

DRIVE THE CORE,
ACCELERATE
THE GROWTH

What we achieved in FY2019

Singapore’s economic structure has evolved over the years. No longer can this economy compete solely on price. The way to grow is to gain a clear advantage in gaining new technologies, coming up with new business ideas and solutions, and to be a trusted and reliable partner, growing alongside customers in this growing digital economy.

Companies are quick to position themselves to capture this growth. They can be start-ups with new business models, or established companies investing in new systems to enhance the way their operations are run. Regardless, there is an overall impetus to invest in new technologies and architecture so as to stay relevant in this new digital age.

The digital economy cannot reach its full potential without top-notch info-communications infrastructure supporting it. StarHub, as a long-trusted service provider in this space, is ready to support our customers as we win new businesses in our respective markets.

In FY2019, we maintained our strong growth trajectory with a 12.6% growth in Enterprise revenue to $575.2 million. Notably, Managed Services contributed over $100 million in segment revenue for the first time, and our cybersecurity business maintained its doubledigit growth to contribute $145.7 million in revenue, 79.1% higher than the $81.3 million reported last year.

The Enterprise business has continued to deliver growth as we seek to leverage our strong expertise in core connectivity services and accelerate growth of our Managed Services segment that is seeing demand in adjacent verticals such as data analytics, Internet of Things and data centre services.

We are also excited at the advent of 5G and the vast opportunities that it will bring. We believe 5G’s unparalleled speed, ultra-low latency, prioritisation and network slicing capabilities will enable innovative solutions offered to our Enterprise customers as we continue to play an active role in industry trials to explore new possibilities brought about by the new technology.

Alongside our industry partners, such as Nanyang Polytechnic, U Mobile Malaysia, the National University of Singapore and A*STAR, we are conducting active trials to create our own ecosystem to explore possible applications and use cases for enterprises, particularly relating to Industry 4.0, 5G roaming, healthcare, retail, urban solutions, education and research, among others, as we continue to seek collaborative opportunities to drive innovative 5G-enabled solutions to our customers.

Chief Executive message

The way to grow is to gain a
clear advantage in gaining
new technologies, coming
up with new business
ideas and solutions, and
to be a trusted and reliable
partner, growing alongside
customers in this growing
digital economy.

Accelerating Growth Through Managed Services

The Managed Services segment has built a strong reputation as a preferred challenger brand, offering fuss-free, end-to-end integrated solutions ranging from connectivity to emerging technology such as data analytics that enable smart business decisions. This is reflected in a 12.6% growth in Managed Services segment revenue in FY2019 of $111.2 million, compared to $98.8 million in FY2018.

During the year, StarHub won a couple of notable projects such as providing managed Wifi and analytics for the newly-opened Jewel at Changi Airport; we also set up the infrastructure and provided managed Wifi, managed LAN and unified communication solutions for Great Eastern Life at Paya Lebar Quarter (PLQ 3).

Besides managing networks, StarHub’s enterprise team has acquired capabilities in key emerging technologies, and have won over customers by providing them with various types of IT services and applications – often bundled together in a way that makes better business sense and value for them. We are seeing greater demand for our SmartHub analytics solution, which we provide to the National Heritage Board in FY2019 to analyse visitor profiles, behaviours and visitation patterns for their annual Night Festival. We are also proud to be a partner of Moove Media, the out-of-home advertising arm of the ComfortDelGro Group, in being able to create a dashboard that provides its clients with commuter insights through data science, artificial intelligence and learning algorithms powered by our innovative big data analytics modelling.

Reaching Out To The Underserved

When an economy pushes towards digitalisation, big MNCs are typically the ones to embrace new technologies earlier. SMEs, by contrast, are less well-resourced to do so.

The IMDA had in January 2019 launched the Go Digital scheme that offers grants to help SMEs digitalise their businesses so that they can be more efficient and competitive. This commitment has been further strengthened and expanded to 13 more sectors under the Industry Transformation Map in the recently announced Budget 2020. There are also other grants, such as the Productivity Solutions Grant to fund digital solutions, equipment and consultancy services for enterprises.

StarHub, as a homegrown name in the info-communications space, has amassed a wide range of digital solutions for SMEs ranging from online accounting, online HR, payroll, digital marketing to cybersecurity. This suite of cloud-based solutions is rolled into the StarHub Smart Business Software-as-a-Service platform that is a fast and affordable option for SMEs to digitalise its business. The Go Digital scheme will end in 2022, which will give more SMEs ample time to explore and get themselves ready to adopt new digital applications.

Reaching out to SME customers at the annual SMEICC conference.
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The IT journey isn’t just limited to large enterprises. SMEs, the backbone of Singapore’s economy, are a vast market of users that can derive very significant efficiencies and savings in the way they run their business if they adopt digitalisation in a whole-hearted manner.

Strengthening Capabilities

We are constantly investing in new digital service capabilities, which allows us to expand the variety of services we can offer. In January 2019 we became the first local PEPPOL (PanEuropean Public Procurement Online) Access Point (AP) provider certified by the IMDA. What this means is StarHub is the first to be able to help Singapore organisations tap onto the widely-used European standard for Singapore’s nationwide e-invoicing framework.

The wide array of services can only be delivered if the networking infrastructure is reliable and scalable. In April, we announced an innovative Software-Defined Wide Area Network (“SD-WAN”) solution through its partnership with the Next Generation Enterprise Network Alliance (ngena). Through a common platform that integrates ngena’s 24 international partner networks, we are able to provide end-to-end managed SD-WAN services to serve enterprises with geographically-diversified operations – a common trait in our globalised world today.

We are also cognisant of the growing demand for high-powered computing facilities that supports the relentless pace of enterprise digital evolution. Hence, we entered into a strategic partnership with AirTrunk, a hyperscale data centre specialist. With this partnership, StarHub will offer data centre services from AirTrunk’s new 60-Megawatt hyperscale data centre campus in Loyang, starting from mid-2020.

StarHub’s new hyperscale data centre in partnership with AirTrunk.

The hyperscale data center plays a critical role in delivering ultra-low latency applications securely through edge computing in the 5G era. With this investment in the hyperscale data centre, StarHub is well-positioned to capture emerging opportunities 5G can bring to the Enterprise business.

Cybersecurity

As smartphones, PCs, all manners of electronic equipment are linked within one big internet, the threat of cyberattacks has increased considerably. For many companies, cybersecurity is no longer a subset of IT spending, but a boardroom agenda. StarHub, for years, has invested considerably to beef up our expertise in this area, so that our customers can be better protected.

Recognising opportunities in the cybersecurity space, StarHub has over the years grown its cybersecurity business inorganically. Ensign InfoSecurity Pte. Ltd. (“Ensign”) was a merger between Quann, the cybersecurity arm of Certis, and StarHub’s organically-grown security infrastructure company, Accel. With the strategic integration of cryptography specialist, D’Crypt Pte Ltd, into Ensign in August 2019, Ensign is now the only Singapore-based pureplay cybersecurity company that can harness combined and advanced capabilities across the value chain, and is well-positioned to provide sophisticated end-to-end solutions to enterprises, industries and governments.

Being the first year of Ensign’s operations as a combined entity, it was imperative for the company to build strong foundations that will support its strong growth trajectory in the long-term. Apart from investing in talent acquisition to build a strong pool of qualified professionals, Ensign unveiled its Security Operations Centre (SOC) in September 2019 to improve the efficacy of cybersecurity analysts through highly contextualised and actionable Singapore-centric and global cyber threat intelligence; advanced cyber threat analysis and data enrichment; and automation.

During the year, while our cybersecurity business continued its double-digit growth momentum on the topline, the initial investments in human capital and R&D, had impacted its bottomline, resulting in a loss position for FY2019.

Moving forward, Ensign seeks to aggressively grow its market share and lift revenue growth, while reaping economies of scale to improve profitability. Notably, D’Crypt has a number of contracts in FY2020 that we expect will contribute positively to the cybersecurity business.

Gaining Momentum

For many customers, it can be hard to keep up with the rapid changes in the IT and infocommunications market. Our message to them is this – we are here to help. We are a trusted brand, with the necessary capabilities and commitment to provide the suite of IT services to help them digitalise. We understand that each customer has unique requirements and we are nimble in providing a tailored solution for their business needs.

Over the years, we have invested considerably to build up a strong core networking infrastructure. While this core business of providing connectivity remains stable, we believe many of our customers will be happy to engage us to provide adjacent technologies and applications as well. With the local telcos getting ready to introduce 5G mobile networks, the list of possibilities as a result of the combination of these networks can only lengthen.

On top of fast-growing markets, such as cybersecurity, we believe there will be a lot of market potential in the emerging technologies segment. The coming years will see new applications and services, ranging from Internet of Things systems, artificial intelligence and big data analytics. The potential of these new areas is promising, and there is no one dominant market leader in Singapore today as the industry continues exploring the vast possibilities that may be further perpetuated by 5G. With our comprehensive suite of solutions, strong talent pool with a passion to drive innovation and differentiated value for our customers, we believe we are well-positioned to capture our fair share of this new growth market.