Within the last 12 months, all the big players in the cloud computing market made moves to establish a presence here in the UAE or the wider region.
Microsoft, Amazon Web Services (AWS), Oracle, IBM and Alibaba have all either opened their own data centres in the Middle East, or recently announced investment plans.
The cloud providers are hoping this will change how businesses are approaching their digital strategy, as the UAE and the rest of the Middle East have been much slower in their adoption of cloud services than counterparts in Europe and the US.
There’s a clear business case for these global companies. Only 20 per cent of organisations in the UAE have so far moved to the cloud according to IBM, which shows there is huge potential for providers, if they can convince businesses of the benefits of using the cloud. According to an International Data Corp. report, the public cloud market in the UAE this year is expected to grow by 35 per cent to $406 million (Dh1.49 million). The global service providers are all hoping for a slice of the action.
Issue of geography
However, the growth figures could be optimistic if we cannot overcome some of the stumbling blocks that have slowed cloud adoption up to now. Location of data centres, and consequently the geographical location and sovereignty of the stored data, is only one of the obstacles that have deterred enterprises from moving to the cloud.
Prior to the advent of cloud services, businesses kept all applications and data onsite or “on premise”. The benefit to having your data and applications on premise is you have fast local network access as well as end-to-end control and visibility of network performance.
Costs can mount
The main disadvantages of hosting everything on premise are the cost of deployment, the operational maintenance, the cost of change, and the lack of flexibility. There is also a human capital cost.
Not moving to cloud means less opportunities for current staff to expand their skill base, and you risk losing employees to more tech-savvy competitors. So, not only do you have the initial costs, you must also factor in the significant ongoing running costs and potential staff replacement costs.
As you try and balance all this, your business units are screaming at you to move faster to support their plans...
Consolidation
Migrating to the cloud overcomes many of these challenges. However, to access applications in the cloud without just relying on your already stretched internet connection, you’ll need to implement a Wide Area Network.
This is where things become complex and costly, especially here in the region. Not only do you have lack of control and visibility concerns to contend with, you also now face significantly higher costs.
This cost factor can be a huge issue. Whereas in Europe you might pay hundreds of dollars for a connection, here you’re likely to be paying ten times more. This is significant for organisations as it often kills the business case for cloud adoption, preventing entities moving to new, more effective ways of doing business to match their digital ambitions.
The skills gap is also an issue. There is a fundamental lack of knowledge about cloud based applications and services, both in the customer base and on the supply side. As an industry we need to invest more heavily in expertise around cloud and connectivity, and suppliers need to start educating customers about the immense benefits that cloud hosting can bring.
We realised that there is a lack of collective knowledge around the cloud and the benefits that businesses can achieve if you have the right support. If as a region we are to truly join the digital future and be at the vanguard of innovation, data connectivity costs must come down to make us more competitive as a market and to allow business to flourish. Without highly available connections and the resources to fulfil them, we will struggle to keep up with our global competitors as we strive to embrace cloud adoption.
— Andrew Grenville is CEO of Orixcom.
