Cloud services forecast to grow rapidly in the UAE
- United Arab Emirates: Thursday, January 10 - 2013 at 11:38
Cloud activity is on the rise in the UAE as companies seek to take advantage of operational efficiencies and cost savings that cloud services can provide, according to a new report by market research and advisory company IDC.
"Since the recession began in 2008, IT departments have been under increasing pressure to justify their operational and capital expenditure," said Sony John, research manager for IT services at IDC Middle East, Africa, and Turkey.
"As a result, they have started looking for more efficient means of delivering IT to their business users, which, in turn, has led to increased awareness of the opportunities offered by cloud computing," he added.
IDC believes the global attention that public cloud has generated, largely as a result of the cloud services offered by high-profile companies such as Google, Amazon, Rackspace, and Salesforce.com, has led many organizations in the UAE to start exploring the viability of using such services.
It adds that while widespread adoption has been somewhat constrained by security fears and infrastructure limitations, many organizations now want to take advantage of the major benefits of cloud - such as the quick deployment of IT resources, shared resource usage, and the ability to monitor usage - but within the security of their own organizations, leading them naturally to the concept of private cloud.
"This growing interest in cloud, especially private cloud, has contributed to the large-scale adoption of virtualization we've seen across the UAE," said John."However, only a handful of organizations have gone the full distance in terms of converting these highly virtualized environments to full-fledged private cloud deployments."
"This is due to a variety of factors, including general misconceptions around the two concepts, and a lack of clarity on the benefits of going for a fully automated, fully metered private cloud. Another key inhibitor is the lack of empowerment provided to business users in the country, which stems from the rigid and hierarchical processes embedded in the fabric of most organizations in GCC countries," he added.
According to IDC, the general preference for in-country datacenters and the desire to capitalise on investments have meant that much of the cloud expenditure in the UAE is currently on private cloud rather than public cloud. IDC expects this trend to continue in the near future.
However, in the longer term, the firm expects public cloud to catch up in terms of adoption and expenditure, as more and more leading vendors and global cloud providers begin to push their public cloud offerings aggressively in the local market.
The firm also notes that cloud is also having a significant impact on the partner landscape, with new partners emerging, existing partners upskilling, and many local providers resisting the concept altogether. It is also creating new competitors in the IT services space, as telecom operators, niche ISVs, and wholesale datacenter providers all seek a foothold in the space. Cloud is also set to impact overall spending on IT services, cannibalizing some services while driving demand for others.
IDC expects total spending on cloud delivery in the UAE to record an increase of 33.6% year on year for 2012. In the long term, IDC projects spending to expand at a compound annual growth rate (CAGR) of 43.7% over the five-year forecast period ending in 2016.
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