The Middle East and Africa (MEA) enterprise market has undergone a sea change in the past five years, with the evolution of many organizations into tech-savvy entities and their subsequent leapfrogging adoption of emerging datacenter technologies. The region has further benefited from the status of countries like the UAE, Qatar, South Africa, and Turkey as early adopters, thereby creating success stories for the rest of MEA to follow.
The Middle East and Africa enterprise hardware market, comprising servers and external storage, remains in a relatively passive stage of growth, expanding 5.1 per cent year on year in 2013 according to IDC. Infrastructure deals within the oil and gas, telecommunications, and BFSI verticals accounted for most of the enterprise hardware revenue. These verticals have been key in driving the shift toward emerging technologies in the region, with the government sector also playing a major role in certain countries.
The transformation of Middle East datacentres began with consolidation initiatives that saw legacy infrastructure slowly transformed into a more consolidated and manageable hardware environment. The initiatives progressed into sporadic virtualization adoption across certain verticals and the use of server virtualization technology as a mere consolidation initiative. By 2008, 10 per cent of all physical servers within the MEA region were virtualised, indicating clear market readiness for the technology.
The global financial crisis of 2009–2010 resulted in a very cautious overall market sentiment, following which 2011 marked the flagship year for virtualisation spending in MEA, with IDC reports showing year-on-year revenue growth of more than 50 per cent. Virtualisation spending has since seen a steady increase in the region with the average rate of virtualisation crossing 30 per cent threshold, while many large enterprises have achieved a fully virtualized datacenter environment.
Subsequently, the hardware landscape across the region’s enterprises has transformed, with an increased focus on manageability and efficiency. The region has graduated from the mere adoption of virtualisation to the utilisation of the virtual infrastructure for creating a private cloud environment. Though many enterprises in the region have a strong bias toward private clouds, the public cloud space has been heating up, with telecommunications providers offering cloud services at attractive price points. As a compromise, many enterprises have settled for the hybrid cloud model, with mission-critical and sensitive applications/data being retained in private clouds, and generic applications residing in public clouds.
The MEA storage market has also matured considerably, with some sporadic storage virtualisation investments taking place in key countries. However, the uptake has not been as widespread as it has been for server virtualization. From a protocol perspective, the MEA market is witnessing healthy growth in the network attached storage (NAS) space, spurred by investments in video surveillance, Big Data, and analytics.
These entry-level to midrange devices are both cost effective and flexible, giving enterprises an advantage in terms of scalability. NAS is becoming a very popular storage option, with strong growth in 2012–2013 driven by both enterprise and SMB uptake. The latest wave of NAS innovation is a combination of scale computing and NAS that is called ‘scale-out NAS’. The explosive growth of unstructured data has driven the need for such a cost-effective and scalable large-scale storage solution.
Today, the adoption of virtualisation is broadening to storage, network, and desktop virtualisation, with a key focus on management. The criticality of the management layer and control is pushing the market towards the next logical step in a fully virtualised datacentre — the software-defined datacenter (SDDC). Software-defined technologies provide a centralized management layer that enables adequate support for traditional infrastructure, legacy applications, and cloud services.
By centralising control and federating disparate datacenter hardware on the software layer, organizations can benefit from simplicity of scale, manageability, and flexibility, leading to a service-oriented infrastructure. Though the current level of awareness among MEA enterprises is relatively low regarding SDDC, vendor push and an eventual understanding around the necessity of the smart management layer are sure to stimulate demand among the region’s enterprises.
Another effort to centralise disparate datacentre resources (servers, storage, network, and software) is converged infrastructure or integrated infrastructure and platforms. IDC defines integrated infrastructure and platforms as pre-integrated, vendor-certified systems containing server hardware, disk storage systems, networking equipment, and basic element/systems management software. Converged infrastructure provides all the essentials for running a datacenter with the certification and service of a single vendor, thereby ensuring ease of deployment and troubleshooting.
The MEA market is divided on the adoption of converged infrastructure, with some organisations embracing the technology specifically for smaller branch offices, remote offices, and so forth, while other organizations are rejecting the technology due to fear of vendor lock-in and incompatibility. IDC expects converged infrastructure to serve as a considerable boon to the region’s growing small and medium-sized businesses (SMBs) as it offers them all the functionalities of the datacentre in a box. As such, we expect to see sizeable growth in this space during 2014.
With key GCC countries such as the UAE and Qatar facing various real-estate issues in terms of large-scale datacentre build-outs and offsite disaster recovery centres, modular datacentres are slowly gaining prominence. Modular datacentes are datacentre facility products made of steel that are pre-manufactured at the supplier’s site and then deployed or assembled at the customer site. These datacentres can be deployed indoor or outdoor and disassembled, moved, and deployed elsewhere.
The concept is finding uptake for niche requirements like remote disaster recovery sites, stop-gap solutions, emergency services, and temporary datacentres. The volatility within certain countries of the region such as Egypt, Syria, Lebanon, and Bahrain could make modular datacentres a practical option for organisations striving to keep their datacentres away from the tension hotspots.
Overall, these are exciting times for the MEA enterprise hardware market, with an array of innovations and emerging technologies promising to change the datacentre landscape. The third platform is bringing Big Data, mobility, cloud, and social elements into the realm of datacentre management, with each of these elements taking its toll on datacentre resources and forcing organisations to adopt emerging technologies that can provide flexibility, scalability, and manageability in the most efficient way possible.
2013 marked an important year in the changing dynamics of the MEA enterprise hardware market, and has set the stage for datacentre transformations to take place in 2014 and beyond.
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).
