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ACN revists cloud computing to discover the latest developments from this ever-evolving market
In March, 2017, Gartner released its latest forecasts for the global public Cloud service market. Detailed in both Gartner’s Forecast Analysis: Public Cloud Services, Worldwide, 4Q16 Update and Forecast: Public Cloud Services, Worldwide, 2014-2020, 4Q16 Update reports, the global public Cloud services market is projected to grow 18% in 2017 to total $246.8bn.
The market intelligence firm also noted that the highest growth will come from Cloud system infrastructure services, which is projected to grow 36.8% to reach $34.6bn in 2017. The largest segment lies with Cloud application services, which is forecasted to grow 20.1% to reach $46.3bn.
The software-as-a-service (SaaS) market is forecasted to see a slight slowdown in the coming years with the increased maturity of SaaS offerings, alongside the increasing popularity of financial applications. Despite this development however, SaaS will remain the second largest segment in global Cloud services.
Other predictions from Gartner include increased growth in the infrastructure compute service space, stemming from increased demand for the migration of infrastructure to the Cloud, as well as a drive towards increasingly compute-intensive workloads in both the enterprise and start up environment. The latter includes artificial intelligence (AI), analytics and Internet-of-Things (IoT).
Cloud in the Middle East
In addition to public Cloud adoption trends in both infrastructure as a service and software as a service, Gartner also expects increased traction in software-defined data centres for private Cloud in the Middle East. Furthermore, the company has projected that the Middle East and North Africa’s public Cloud market will grow by 22% in 2017 to reach $1.2bn.
When discussing which Cloud models have grown in popularity over the last year, Santhosh Rao, principal research analyst, Gartner, shares: “Application hosting and infrastructure services such as disaster recovery as a service (DRaaS) and backup as a service (BaaS) are gaining traction.
“Traditional disaster recovery can be expensive to set up a second backup data centre. As a result, some Middle East organisations are leveraging the services of DRaaS providers to ensure application availability requirements are met,” he adds.
Alongside the growing popularity of hosting traditional applications in the Cloud, enterprises in the Middle East have also shown greater interest in deploying technologies, such as IoT, particularly in the government and public sector, oil and gas, energy, and utilities.
In terms of SaaS, the most widespread adoption has typically been with Microsoft Office 365, followed closely by applications in both HR and payroll. Despite this however, further traction of both IaaS and SaaS within the region has been held in check by the lack of local data centres by Amazon and Microsoft. The main obstacle has been data sovereignty issues.
“The Middle East is a little behind the global Cloud adoption curve, mostly because of the lack of hyperscaler data centres by major players. One these local data centres are activated, then we expect a surge of interest to the public Cloud in the Middle East,” comments Rao.
“There is also strong potential for Middle East telcos and service providers to expand their Tier-to-Service solutions from medium-size enterprises to large enterprises.”
Data sovereignty and evolving market demand
One of the more pressing issues currently occupying public and private sector organisations based in the Middle East is that of data sovereignty. Due to strict regulatory requirements within the region, sensitive information, which can comprise of employee, customer and citizen data, must both be stored and analysed on premise within the country.
Coupled with the fact that the Middle East market lacks enough in-country data centres, as well as demand for Cloud technologies to support the development of new services and a digital economy, the issue has become a real dilemma.
“Cloud solutions are helping Middle East organisations to have real-time visibility on their operations, cut costs, and automate essential applications so that employees can focus on higher-value and mission-critical tasks. The Cloud also helps to accelerate innovation, as innovation is often subject to constraints from legacy and potentially complex infrastructure,” explains Hichem Maya, head of Industries – MENA, SAP.
“With SAP recently announcing plans to launch in-country data centres in Qatar and the UAE, we are committed to ensuring that organisations can meet data sovereignty regulations while gaining full benefits of the Cloud. SAP data centres and our solutions also leverage global best practices in having strict data privacy standards.”
Despite the challenge surrounding data sovereignty, Maya is quick to point out the positive growth for Cloud in the region. He shares that the UAE, Saudi Arabia and Qatar remain the three fastest-growing Cloud markets for SAP in the GCC and Middle East.