Cloud services bandwagon

Although cloud services has the potential to open up business opportunities, channel partners that are building their business in this space are still finding their way

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Cloud services bandwagon
By  Clayton Vallabhan Published  May 18, 2012

Although cloud services has the potential to open up business opportunities, channel partners that are building their business in this space are still finding their way, reports Clayton Vallabhan.

With approximately US$2 billion worth of cloud computing services set to be sold in 2012, there is every indication that it is the bandwagon the region’s channel community should be jumping on. However, resellers must identify which parts of the cloud they can most benefit from. Cloud services involve a lot of moving pieces and who better to tie them all together than solution providers?

While the Middle East maybe behind the cloud services curve, with broadband penetration lagging behind established Western markets, the trend will inevitably find its way here. That will bring a disruption for the traditional channel distribution models and how distributors will engage with channel partners.

Yet, while the vast majority of the major stakeholders surveyed for this feature still view cloud services as a significant ‘game changer’, current market dynamics mean that the status quo is likely to be maintained for some time to come in the Middle East.

Dr. Ali Baghdadi, president and CEO, Aptec Holdings said there is a significant amount of interest in cloud in the region, but there isn’t much in the way of statistics. Since the announcement of Office 365 which Aptec distributes and will start selling in June this year, more than 200 resellers have signed up. “Our vertical cloud applications like Altair FMS are also attracting more interest from the SMB sector while larger enterprises are opting for in-house versions,” Baghdadi said.

Nick Black, technical manager, Trend Micro MEA, said the adoption of cloud services in the region is slow because of major stumbling blocks with security the biggest concern. Black said cloud computing is now a $128 billion business globally. Whilst the Middle East’s cloud computing adoption rate is growing, it is lower than markets in more mature economies. There is still some uncertainty especially around security, he said.

Black revealed that a recent Trend Micro survey of 100 IT professionals across the Middle East region showed that 60% of respondents had no plans for implementation of public or private cloud environments in their organisations.

Nicolai Solling, director technical services, help AG Middle East, agreed and said data storage is another inhibitor to the uptake of cloud services in the region. Solling said: “Cloud services are definitely a talking point with many customers, however, the adoption of services is severely hampered by the cloud providers’ data storage format. Every organisation in the Middle East needs to take into consideration that the cloud providers are located far away from the region and that data and applications will therefore be stored very far away. There are simply physical limits to how quick data can be transmitted between the region and the rest of the world due to latency in the speed of the fibre optical cables connecting the world. This can be an issue both from an information security perspective, but also from an availability perspective.”

Solling added: “The uptake of cloud services in the region will not be significant until cloud providers start building a local presence here, where we can take opportunity of the high performance infrastructure built by the service providers in the region.”

By contrast, cloud-based services are generally not large-scale software applications.
Deepak Narain, senior systems engineer, VMware EMEA said the biggest hurdle right now is education. Narain added that channel partners need to aggressively deliver programmes to educate the Middle East market on the benefits of cloud computing. “VMware thinks the real opportunity lies in partners helping end-users in building virtual private clouds that leverage the service provider offerings in the Middle East,” said Narain.

Hari Padmanabhan, executive chairman, Encore Group, said there is significant opportunities to tap into the cloud market and these are already being accessed at the enterprise level. “There are enterprises now that are making major shifts to move their entire ‘enterprise communications’, if I can call it that, which is everything from email to collaborative communication within the enterprise on to cloud-based services,” he said.

Padmanabhan pointed out that the challenge is the ability of channel partners to step up their own capability in terms of enabling or providing services that help enterprises to transition their current enterprise communication infrastructure on to cloud-based services. “This is beginning to happen and I think these are the areas where we will see initial successes,” he noted.

While there is a case for channel partners to build their own cloud-based infrastructures and offer services to prospective clients, major stakeholders in the region are of the view that developing collaborative models between vendors, distributors and resellers should be the starting point.

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