Where's my cloud?

The cloud is making enterprise-grade IT cheaper than ever, but it still isn't Middle East-friendly

Tags: Amazon Web Services (aws.amazon.com/)Cloud computingGartner Inc. (www.gartner.com/technology/home.jsp)Microsoft CorporationSAP
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Where's my cloud? Vendors need to show increased commitment to the region in the form of brick-and-mortar hosting facilities
By  Tom Paye Published  April 26, 2015

For all that's said about cloud computing changing the way that businesses operate, one thing is becoming incredibly clear: The cloud is making enterprise-grade IT cheaper than anyone ever thought possible.

According to Gartner, only 4% of the global IT spend goes to cloud computing, which will garner around $176bn of revenue this year. But, seduced by the pull of cheaper, opex-based pricing models for their computing needs, companies will keep moving more and more of their operations onto the cloud. By 2017, cloud spending will reach $240bn, according to Gartner, and that number will simply go up and up.

It's a wonder, though, that the traditional computing vendors are pushing their cloud-based offerings so hard. The trend completely decimates their traditional revenue models - investing in new data centres on which to host cloud services isn't cheap, and money is only made make on monthly subscriptions. This means that cloud providers need a whole lot of customers to make the endeavour worth it.

But what's unattractive for the vendors is good for the CIOs making purchasing decisions. Because a handful of public cloud providers, such as Amazon Web Services (AWS) or Microsoft, are battling to sell undifferentiated platforms or infrastructures as a service, they are competing mostly on price. Microsoft recently announced that it would provide some services to start-ups for free, in the hope that they'll remain loyal customers once their businesses take off. Likewise, AWS is prone to slashing the price of its cloud storage offerings.

All of this means that, for CIOs, the idea of moving more of the infrastructure to the cloud, rather than spending precious slices of the IT budget on costly on-premise equipment, is becoming ever-more attractive. As Gartner's numbers show, the cloud computing spend is little more than a stream now, but the industry is most in agreement that the stream will eventually become a flood.

In the Middle East, however, this will depend on cloud providers operating data centres in-country. Middle Eastern government departments are forbidden from hosting their data outside of their geographic borders, and many more enterprises have followed that lead. What's more, CIOs here haven't taken kindly to vendors' claims that hosting cloud services in Europe - more than 3,000 kilometres away - is ‘good enough'. What happens in the event of a service interruption? Is it the local support team's responsibility, or is it the European hosting facility's? Because these sorts of questions haven't been properly answered, Middle East businesses aren't fully sold on the idea of public cloud, and are instead building their own private clouds - at great expense.

For the public cloud to really take off, then, vendors need to show increased commitment to the region in the form of brick-and-mortar hosting facilities, or at least by partnering with locally based data centres. SAP and Microsoft have already taken this step, and are offering cloud services hosted at the Pacific Controls data centre in Jebel Ali, Dubai, among others. But others have dawdled in their pledges to bring cloud computing closer to home.

This is a shame because, as is the case in any other region, CIOs here want to lower their costs, and they want to improve the complexity of their infrastructures. Public cloud providers could be the solution to this, but unfortunately, as is the case with the weather, there aren't enough viable clouds to be found in this region.

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