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70% of Dubai start-ups employ cloud computing

24% even built their start-ups on the cloud, Cloud Report 2017 reveals

Image Credit: Supplied
William Chappell, Maged Wassim, and Tina Ghanem.
Gulf News

ABU DHABI: Seventy per cent of start-ups in Dubai currently use cloud computing, and 24 per cent even built their start-ups on the cloud, according to The Cloud Report 2017 developed by Dubai Silicon Oasis Authority (DSOA) and IBM in collaboration with Thomson Reuters.

The report points out that 38 per cent of those not yet on the cloud plan to adopt the technology in the near future.

Across the three cloud service models available, 76 per cent of start-ups on the cloud have opted for Software as a Service (SaaS). Meanwhile, Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) are each used by 32 per cent of adopters.

One-third of the start-ups on the cloud utilize more than one type of cloud service, with nine per cent using all three service models, the report states.

Start-ups on the cloud in Dubai use an average of 4.39 cloud services, with 36 per cent using one or two services, and 18 per cent using more than five. Storage and web hosting are considered as core services, and are generally the first cloud services adopted. They are also currently the most widely used at 68 per cent and 67 per cent respectively.

“Although 72 per cent of all start-ups spend less than $50,000 on IT annually, 24 per cent dedicate more than 20 per cent of that annual budget to cloud solutions. In addition, 80 per cent of start-ups on the cloud are planning to increase spend on cloud services in the next two years,” the report stated.

Among the start-ups that have not yet adopted cloud solutions, 42 per cent find the initial investment prohibitively high. Other concerns delaying start-ups from moving to the cloud include data protection (27 per cent) and security (15 per cent).

Commenting on the report, William Chappell, Chief Financial Officer at DSOA, said: “In line with the National Agenda of the UAE Vision 2021, launched by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, DSOA aims to actively contribute to the national key performance indicators under the Competitive Knowledge Economy pillar. As we transition to a more technology-focused world, all sectors of the UAE’s economic landscape are working relentlessly to forge a digital transformation.”

The report was launched on Monday at a joint press conference held at Dubai Technology Entrepreneur Centre (DTEC), the largest technology incubation center in the Middle East, wholly owned by DSOA.

Through a survey of more than 100 start-ups, supplemented by several case studies, the document offers insights on the start-ups’ spending power, priorities, challenges, and requirements.

Tina Ghanem, Head of Accelerate SME at Thomson Reuters in the Middle East and North Africa, said Dubai start-ups are increasingly adopting cloud-first strategies to capitalize on the flexibility, speed-to-market and scalability that cloud solutions offer – right from the very beginning.

“However, for entrepreneurs with less IT expertise, cloud adoption can be an overwhelming thought and there is still a misconception that it involves big price tags, and huge commitments of time and resources.

“Various initiatives - such as the IBM Global Entrepreneur Program, a cloud credit program, and the incubation support of ecosystem players like Dtec - will help to address some of the perceived obstacles to deeper and broader cloud technology usage among these start-ups,” she said.

She added that the pace of cloud adoption in this market is expected to grow rapidly in the coming years as Dubai start-ups look for more variety and a greater range of cloud services to choose from in the future.

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