Enter managed services

The potential for managed services is somewhat untapped in the Middle East region, but more and more organisations are looking to improve on their IT infrastructure management, and are turning to managed services to achieve this.

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Enter managed services
By  Piers Ford Published  December 15, 2013

The potential for managed services is somewhat untapped in the Middle East region, but more and more organisations are looking to improve on their IT infrastructure management, and are turning to managed services to achieve this, reports Piers Ford.

Managed services are enjoying a surge across the Middle East as enterprises look to a combination of the cloud and outsourced service providers to sidestep the need for investment in ICT infrastructure and skills that are an expensive distraction from their core business.

From network and data centre management services to disaster recovery, storage and backup, server management, security and IT support, it is possible to offload the day-to-day provision of significant chunks of the IT function, liberating financial and human resources to focus on productivity and efficiency.

“Adopting a managed service provider is preferred over retaining IT infrastructure management in-house, as it eliminates the high CAPEX costs for IT, substituting them with far more manageable operational expenses,” said Sarwan Singh, director business development at managed services specialist Prologix.

“Today, upgrade and refresh cycles are far more frequent compared with a decade earlier, which means that deploying solutions on premises requires not only a substantial upfront expense but also additional expenditure in terms of maintenance and upgrade costs. Choosing managed services instead allows the enterprise to focus on core business offerings.”

Singh credited the rise of cloud services as one of the main drivers of this managed services trend. Gartner expects the Middle Eastern and Northern African (MENA)public cloud services market to reach $462.3m by the end of 2013, and with many of the benefits associated with the cloud model also being offered by managed service providers, CIOs across the region are giving it serious attention.

According to Marius Mignis, research analyst at Frost and Sullivan’s Information and Communication Technologies Practice, managed services adoption is “huge” with the GCC countries leading the way – and this is creating a major opportunity for the managed services channel. Frost and Sullivan expects the global market to be worth $1.25bn this year, with compound annual growth of 19% taking it to $3.2bn by 2018.

“The biggest demand for managed services is in the KSA, the UAE and Qatar,” said Mignis. “In the KSA, there is an increasing need for data hosting facilities and the market is the largest in the region. The UAE market is most mature and has the best infrastructure in the region, which has allowed it to become the regional IT hub with the most competition. Qatar is experiencing the highest growth rate due to infrastructural developments.”

Overall, Mignis said, infrastructure support such as desktop and router management is the biggest revenue generating segment, but the highest growth is expected in data centre hosting and network security – reflecting the main concerns and preoccupations of today’s CIO.

The shortage of specialist IT skills in the region is another factor that is driving organisations towards managed services. Competition for skilled staff is intense.

“Some Middle East organisations are now adopting a hybrid cloud IT services approach, and as a result, part of the IT infrastructure need to run applications will no longer be hosted in the organisations’ data centres,” said Cesare Ottaviani, regional business manager, Alliance Service Provider, Turkey, Eastern Europe, Africa and Middle East region at EMC.

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