While much has been made of the digital revolution currently sweeping across the business landscape, it’s fair to say that the last couple of years have been far from plain sailing for the Gulf’s IT products and services market.
Indeed, with falling oil prices and macroeconomic challenges across the region combining with a seemingly never-ending wave of global economic and political uncertainty, there has been an inevitable shrinking of IT budgets.
This has all served to intensify the cost pressures that organisations are facing, forcing businesses to carefully prioritise their IT investments and prompting many of them to completely re-evaluate their entire IT operations model.
This need to prudently pick and choose their IT projects has unsurprisingly led organisations of all shapes and sizes to eye up solutions that enable them to lower their capital expenditure levels and run their operations more efficiently.
Outsourcing services emerged as an obvious choice, with managed services proving particularly popular. New adopters tended to opt for on-site or onshore delivery, while those already using such services increasingly moved toward offshore delivery in a bid to achieve incremental cost savings.
Historically, the UAE has been the most mature economy in the region in terms of technology adoption, and cloud services have continued to gain momentum in the country, fuelled by consolidation initiatives, intensifying cost pressures, and the pressing need for more agile IT infrastructure.
The growing demand for cloud services has also been driven by the increased availability of public cloud services, as well as by obvious benefits such as the low levels of investment required and the ability to push new products to market much more quickly.
The industries that have been at the forefront of this boom in cloud services procurement include hospitality, retail, construction, health care, telecommunications, media and entertainment, and finance. And while the attraction from the business side is clear, what benefits does this shift hold for those tasked with leading the IT department?
The role of the chief information officer (CIO) has continuously evolved over the years, and so have their priorities. Given current market conditions and the constantly intensifying competitive landscape, most organisations are looking for ways to create new revenue streams while simultaneously generating the maximum profit, and the CIO has a pivotal role to play in making this happen.
Indeed, whether the focus is on developing new products and services, automating business processes, creating an omni-channel business presence, or enhancing the overall customer experience, the IT department is critical to enabling the digital transformation of modern organisations.
CIOs are coming under mounting pressure to create more internal capacity to support new and innovative business ideas, and cloud services fit perfectly with this agenda as they help to free up valuable time and resources traditionally consumed by day-to-day IT operations management.
As such, public cloud services are increasingly being deployed by IT teams throughout the region as they look to lay the foundations required to radically transform their processes and deliver the desired business outcomes.
This trend has inevitably impacted the regional channel partner community too, with most channel partners struggling to keep up with the pace of market change over the past few years. Continually shrinking margins in the hardware and software reselling business have only made the situation even more challenging.
Perhaps inevitably, we have seen a growing number of channel partners and systems integrators in the Gulf react by incorporating cloud services into their own offerings, with a number of services providers setting up dedicated cloud reselling services in collaboration with OEMs.
Some have opted to establish their own datacenters and start hosting cloud versions of popular OEM solutions, while others have invested in the provision of infrastructure-as-a-service (IaaS) and software-as-a-service (SaaS) offerings. But with the UAE leading the region in terms of cloud adoption, the majority of global vendors are now eyeing up the country for their regional operations.
Concerns around data locality have long been a major stumbling block for UAE-based organisations looking to embrace cloud, but these are expected to subside. And another major challenge — the lack of adequate local support — should also be ironed out as global providers increasingly establish in-country offices.
All of this spells positive news for the cloud market here in the UAE and the wider region, with CIOs increasingly being able to deliver the innovative products and services their colleagues and customers crave at a cost and speed that keeps the CEO onside.
The columnist is group vice-president and regional managing director for the Middle East, Africa and Turkey at global ICT market intelligence and advisory firm International Data Corporation (IDC). He can be contacted via Twitter @JyotiIDC. Content for this week’s feature leverages global, regional, and local research studies undertaken by IDC.
