With the aim of diversifying away from oil-based revenues and steering toward a digitally-driven economy, the UAE has taken the lead among its Middle East neighbors in the adoption of cloud technology. The availability of cloud services locally has created a technologically advanced ecosystem for the government and regulated sectors such as finance, education, manufacturing, retail, transport, logistics, and energy, to push toward innovation, entrepreneurship, job creation and economic growth. UAE-based businesses investing in hybrid cloud environments are expected to create 55,000 jobs, industry experts announced recently.
A number of leading tech companies are catering to this existing demand and further boosting interest in the cloud by opening data centers in the region. A week ago, Microsoft announced that its data centers in Dubai and Abu Dhabi were online, offering access to Azure's cloud computing service, Office 365, with support on its Power Platform and Dynamic 365 expected in late-2019. Alibaba Cloud and Oracle have also entered the UAE cloud services space. Amazon Web Services (AWS) has further established a strong cloud presence in the region with data centers in the UAE and Bahrain.
Spending on cloud services is likely to increase, especially given the fact that companies can now store data within the same country, and therefore, have greater incentive to move from on-premises servers to the cloud. In its recent announcement, Microsoft also emphasized the importance of data protection, security and privacy, showcasing itself as the first cloud service provider in the UAE to have achieved the Dubai Electronic Security Center certification for its cloud service. Demonstrating strong cloud opportunity, the UAE’s public cloud spend is set to quadruple to more than AED 1.5 billion by 2022, generating AED 20 billion in net new revenues, according to a recent report by market research firm IDC.
“Microsoft opening its first cloud data centers in the Middle East, comes at a time when enterprises are increasingly turning to cloud environments to help them save time and money. The 2019 Middle East Encryption Trends Study shows that the vast majority of organizations in the Middle East [84 percent] are currently using cloud computing services or plan to do so in the next 12 to 24 months. The use of encryption in the region is at an all-time high, and 40 percent of respondents are leveraging hardware security modules [HSMs] for public cloud encryption to protect their sensitive information in environments such as Microsoft Azure. Innovations such as nCipher’s Bring Your Own Key [BYOK] capability gives customers complete control over their encryption keys and confidence that their data is protected in the Microsoft cloud,” said Philip Schreiber, Regional Director, Middle East, Africa and South Asia at nCipher Security.
Public cloud services market value in the MENA region
Furthermore, the development of cloud services is also spurring interest in bridging the skills gap among members of the IT community. A number of organizations in the Middle East are now looking to upskill their current workforce as well as hire candidates that prove an advanced understanding of cloud services. Microsoft's Cloud Society, for instance, has trained more than 150,000 IT professionals in the Middle East and Africa region, the company confirmed. Organizations in the UAE are now set to gain new levels of best practices in cloud business, argues Andrew Calthorpe, CEO, at the UAE-based IT infrastructure and information management consultancy and solutions provider Condo Protego.
“As the UAE economy becomes more competitive, Microsoft’s upcoming data center will allow organizations to more rapidly adopt a cloud-first strategy to drive IT optimization and optimized costs. UAE’s cloud businesses can lead to new levels of business and economic growth,” Andrew Calthorpe said.
The UAE is witnessing a strong hybrid cloud demand among both medium and larger enterprises, emphasizing the fact that not every UAE organization needs to move solely to the public cloud. In fact, the highest levels of business innovation could come from a hybrid cloud model, with core applications running on-premise and others on the public cloud.
“Specialized channel partners can help organizations determine their public cloud based on business operations and technology to optimize costs and agility. The UAE’s existing VMware customers are ideally-positioned to leverage the Microsoft data center to move to a consumption-based model, which means paying as you go and no longer having to worry about hardware or services,” Andrew Calthorpe added.