Gartner predicts that from 2013 through 2017, $3.8 billion will be spent on cloud services in Mena, $1.1 billion of which will be spent on business process as a service (BPaaS). Image Credit: Supplied

Dubai: The public cloud services market in the Middle East and North Africa (Mena) is on pace to grow 21.3 per cent in 2014 to total $620 million, a new report has revealed.

The public cloud services market in the Mena was estimated at $511 million last year and is expected to reach $1.1 billion in 2017, according to Gartner, US-based information technology research and advisory firm.

“Public cloud services continue to grow rapidly around the world and Mena is no exception,” Ed Anderson, research director at Gartner, said in a statement.

Gartner predicts that from 2013 through 2017, $3.8 billion will be spent on cloud services in Mena, $1.1 billion of which will be spent on business process as a service (BPaaS).

Software as a service is expected to grow 29.1 per cent in 2014 to $126 million compared to $97 million last year and is expected to reach $253 million in 2017.

SaaS benefits such as ease of use, low management overheads and the fact that it requires low upfront licensing investment, resonate with many Chief Information Officers in the region.

Growth in the adoption of these applications can be attributed to the fact that providers such as Salesforce.com, Google, and Microsoft have only recently been actively promoting these services in the region.

Infrastructure-as-a-service (IaaS) is expected to grow from $60 million in 2013 to $138 million in 2017.

Deriving benefits

According to research firm International Data Corporation (IDC), some organisations in the Middle East are expected to start realising that they can derive even greater benefits from a full-fledged private cloud implementation.

The 2014 SaaS market is expected to gro,w led by the key markets of Saudi Arabia and the UAE which will grow at 47.2 per cent and 57.3 per cent respectively. This will naturally result in cannibalisation of some traditional software licence revenues.

Established vendors such as SAP, Oracle, Microsoft and IBM (that have yet to aggressively market their SaaS offerings in the local market), will sit in a critical position — choosing to either partner and put at risk their still lucrative perpetual licencing sources or continue to stick to an enterprise on-premise model in the Middle East and forego the potential opportunity to reach a larger (SME) market through SaaS.

Jyoti Lalchandani, Group Vice President & Regional Managing Director for IDC in the Middle East, Africa, and Turkey, said that most private cloud activity in the Middle East till now has been centered around infrastructure virtualisation, basic automation and in some cases, the development of service catalogues.

Private cloud revenues

Not only will the private cloud lead to growth in private cloud revenues, he said, adding that it will also indirectly impact spend on hardware, software and services as infrastructure and applications environments are modernised as part of these broader private cloud deployments.

“Growth in Mena is expected to be slightly higher than the rest of the world led by strong growth in SaaS, infrastructure as a service (IaaS) and platform as a service (PaaS). Organisations are turning to cloud computing to realise business benefits such as increasing their speed in responding to changing market conditions and lowering IT costs,” Anderson said.

“There has been a general lack of motivation to implement all the elements of a true private cloud such as automation, orchestration, metering and chargeback,” Lalchandani said.

In the more mature markets of the Middle East, telcos, hosters and managed service providers have, over the past two years, been building out their cloud services portfolios to varying degrees of success.