Could new Saudi investment fund deal change tech landscape forever?
After months of intense negotiations over control of money and investment strategy Saudi Arabian investors have reached an agreement with Japan’s SoftBank to launch the world's biggest technology investment fund.
The Vision Fund is expected to start with just under $100 billion in investments and a twelve-year term, and according to the press release detailing the announcement: "ushers a huge, new force into a tech-investment world long dominated by Western bankers and Silicon Valley financiers".
The deal combines the deep pockets of Mohammed bin Salman, the 31-year-old deputy crown prince of Saudi Arabia, with one of the world’s most ambitious tech investors, but there were doubts that it would go through at one point.
“We had a difficult time understanding the delays,” one SoftBank executive involved in the deal said in April, after his third forecast that the fund would launch soon was proved wrong. “For months, I’ve been saying we were two weeks away,” he said.
Both parties' negotiating priorities revealed their respective interests, with Son eager to move ahead quickly to capitalize on what he sees as fast-moving changes in areas like artificial intelligence, robotics and biotech, whilst the prince wanted to ensure his country not only would stand to profit financially but also would reap knowledge and technology to help it diversify beyond oil.
Saudi negotiators also wanted to make sure the country’s sovereign-wealth fund wasn’t merely treated by its foreign partners as an easy source of capital or “a sovereign deemed to have deep pockets,” said a person familiar with the Saudi side’s thinking.
The Vision Fund, which is described as “the largest investment vehicle ever" was very much the brainchild of Mr. Son, a 59-year-old Korean-Japanese entrepreneur known for his brash investment style and a 300-year view on technological trends, and Mr. Salman, who is viewed as the face of change in the kingdom and a major proponent of weaning the country off of its reliance on oil revenues.
Mr. Salman was looking for ways to implement an ambitious reform plan that calls for increasing investment in everything from technology to financial services. The prince had money. He controls Saudi Arabia’s Public Investment Fund, a sovereign-wealth fund that could become the world’s largest if, as widely expected, it is the primary recipient of the money raised from a proposed listing by state-owned oil giant Saudi Arabian Oil Co., or Saudi Aramco.
The pair agreed to join forces during a 45-minute meeting in Tokyo in September, and they announced the agreement to launch the Vision Fund in October, with $45 billion from PIF and $25 billion from SoftBank.
Other investors such as technology giants Apple and Qualcomm were signaling interest, and Mr. Son pushed to get the deal closed by the end of December. It may have taken a while to go through but the future of technological investment and the balance of the playing field might just have changed forever...
GfK and VMware: Innovating together on hybrid cloud
GfK has been the global leader in data and analytics for more than 85 years, supplying its clients with optimised decision inputs.
In its capacity as a strategic and technical partner, VMware has been walking GfK along its digital transformation path for over a decade.
“We are a demanding and singularly dynamic customer, which is why a close partnership with VMware is integral to the success of everyone involved,” said Joerg Hesselink, Global Head of Infrastructure, GfK IT Services.
Four years ago, the Nuremberg-based researcher expanded its on-premises infrastructure by introducing VMware vRealize Automation. In doing so, it laid a solid foundation, resulting in a self-service hybrid-cloud environment.
By expanding on the basis of VMware Cloud on AWS and VMware Cloud Foundation with vRealize Cloud Management, GfK has given itself a secure infrastructure and reliable operations by efficiently operating processes, policies, people and tools in both private and public cloud environments.
One important step for GfK involved migrating from multiple cloud providers to just a single one. The team chose VMware.
“VMware is the market leader for on-premises virtualisation and hybrid-cloud solutions, so it was only logical to tackle the next project for the future together,” says Hesselink.
Migration to the VMware-based environment was integrated into existing hardware simply and smoothly in April 2020. Going forward, GfK’s new hybrid cloud model will establish a harmonised core system complete with VMware Cloud on AWS, VMware Cloud Foundation with vRealize Cloud Management and a volume rising from an initial 500 VMs to a total of 4,000 VMs.
“We are modernising, protecting and scaling our applications with the world’s leading hybrid cloud solution: VMware Cloud on AWS, following VMware on Google Cloud Platform,” adds Hesselink.
The hybrid cloud-based infrastructure also empowers GfK to respond to new and future projects with astonishing agility: Resources can now be shifted quickly and easily from the private to the public cloud – without modifying the nature of interaction with the environment.
The gfknewron project is a good example – the company’s latest AI-powered product is based exclusively on public cloud technology. The consistency guaranteed by VMware Cloud on AWS eases the burden on both regular staff and the IT team. Better still, since the teams are already familiar with the VMware environment, the learning curve for upskilling is short.
One very important factor for the GfK was that VMware Cloud on AWS constituted an investment in future-proof technology that will stay relevant.
“The new cloud-based infrastructure comprising VMware Cloud on AWS and VMware Cloud Foundation forges a successful link between on-premises and cloud-based solutions,” says Hesselink. “That in turn enables GfK to efficiently develop its own modern applications and solutions.
“In market research, everything is data-driven. So, we need the best technological basis to efficiently process large volumes of data and consistently distill them into logical insights that genuinely benefit the client.
“We transform data and information into actionable knowledge that serves as a sustainable driver of business growth. VMware Cloud on AWS is an investment in a platform that helps us be well prepared for whatever the future may hold.”