Cloud adoption in the Middle East storms ahead

Brid-Aine Parnell

Tuesday 1 March 2016

Growth in new data centre builds and service partnerships in the UAE and Saudia Arabia are helping local firms to embrace the cloud.

While analysts and pundits have been predicting a cloud boom in the Middle East for some time now, the region itself has only recently shown signs that it’s really ready to embrace the technology.

According to Cisco’s Global Cloud Index, by 2019, Middle East and Africa will have the world’s highest cloud traffic growth rate, at 41 per cent. Clearly, a significant part of this growth is being spurred by the rising number of data centres being built locally.

IBM and Ethiad Airways strike a deal

In late 2015, Abu Dhabi airline Etihad Airways announced a 10-year technology services agreement worth around $700 million with IBM to enhance customer experience, develop its infrastructure and security and improve efficiency.

“The transformational agreement, one of the most important strategic collaborations by Etihad Airways, will provide access to the latest cloud-based technologies and services for the airline, its group companies and equity partners,” the airline commented in its announcement of the deal.

Part of the arrangement is to build a new cloud data centre in the UAE emirate of Abu Dhabi, which the airline promises will be “one of the most sophisticated technology facilities in the Middle East”. Once IBM, which is building the facility, has the new data centre off the ground, all of Etihad’s IT infrastructure, applications and security operations will be run from there, while disaster recovery will be based at an IBM cloud data centre in Europe.

IT/telco partnerships

This represents an important deal for the region, but is by no means the only local data centre partnership. Global data centre firm Equinix has a partnership with the Emirates Integrated Telecommunications Company  commercially known as du which includes a data centre in the UAE emirate of Dubai. The data centre is run as a colocation site for carriers, content providers, cloud providers, financial services and enterprise customers.

Fellow UAE telco Etisalat has a similar partnership with IT firm Pacific Controls, which allows it to offer cloud services in the UAE, Saudi Arabia, Nigeria, Egypt and Pakistan. The partnership runs infrastructure-as-a-service (IaaS) solutions from a data centre built by Pacific Controls in Dubai Technopark.

Whether they’re already up-and-running or still under construction, these new data centres are now helping Middle Eastern firms overcome two of the main obstacles to cloud adoption  latency and downtime.

Systemic problems

Prior to the first regional data centres, traffic for the region came from as far away as Western Europe or Asia. Even so, connectivity was still good, as international traffic is served into the region via submarine cables and there has been considerable investment in local networks in most Middle Eastern countries.

However, there are still problems. Apart from the odd calamity when submarine cables are cut or damaged – such as the three incidents back in 2008 that caused havoc in the region – there’s also the more fundamental problem that these cables have been built to bring traffic to the region, not improve connectivity within the region itself.

With most content being hosted in data centres in North America, Europe and Asia, and lower speed traffic within the region, the fear that a cloud service could go down for a company was reasonably much higher in the Middle East. But now the spread of local datacentres can change all that.

Datacentre proliferation

A study by Tariff Consultancy has found a sharp increase in data centre facilities and providers in the region since 2012. The TCL Data Centre Middle East 2015 report said that space had increased in the UAE and Saudi Arabian markets alone by more than 60 per cent. This new space includes both datacentres that local carriers are using to provide cloud services and colocation hubs for companies and cloud providers to use.

This, in turn, is leading to growth in the cloud services market, which was estimated to grow 17 per cent last year in the MENA region, according to Gartner. Software-as-a-service, the largest segment of the market, was estimated to reach $206 million, according to the analyst firm.

“SaaS will be one of the fastest growth segments in the public cloud services market through 2018 as organizations increase their use of more applications across more vertical industries, including banks, governments, education, healthcare and telecommunications sectors,” explained Fred Ng, senior research analyst at Gartner.

The cloud computing uptrend may have been a bit slower in the Middle East than the pundits originally predicted, but with both data centre space and opportunities for cloud service partnerships in the region now taking off, many of the obstacles to adoption are becoming a thing of the past.