IDC predicts surge in cloud adoption in UAE
Market research company says cloud delivery has increased by 33.6% year on year for 2012
Market research and advisory company IDC expects total spending on cloud delivery in the UAE to record an increase of 33.6% year on year for 2012, as enterprises in the country begin to show a growing interest in cloud.
The growing level of interest in cloud is primarily due to the benefits it offers in terms of operational efficiency and cost savings, according to IDC. The UAE is currently in the very early stages of cloud adoption, with very few local providers offering cloud services, those that do are firmly in the early stages of portfolio development.
In the long term, IDC projects spending to expand at a compound annual growth rate (CAGR) of 43.7% over the five-year forecast period ending in 2016.
"Since the recession began in 2008, IT departments have been under increasing pressure to justify their operational and capital expenditure," said Sony John, research manager for IT services at IDC Middle East, Africa, and Turkey. "As a result, they have started looking for more efficient means of delivering IT to their business users, which, in turn, has led to increased awareness of the opportunities offered by cloud computing."
According to IDC, many organisations in the UAE are beginning to explore the viability of using cloud services. While widespread adoption has been somewhat constrained by security fears and infrastructure limitations, many organisations now want to take advantage of the major benefits of cloud - such as the quick deployment of IT resources, shared resource usage, and the ability to monitor usage - but within the security of their own organisations, leading them naturally to the concept of private cloud.
"This growing interest in cloud, especially private cloud, has contributed to the large-scale adoption of virtualisation we've seen across the UAE," said John. "However, only a handful of organisations have gone the full distance in terms of converting these highly virtualised environments to full-fledged private cloud deployments. This is due to a variety of factors, including general misconceptions around the two concepts, and a lack of clarity on the benefits of going for a fully automated, fully metered private cloud.
Another key inhibitor is the lack of empowerment provided to business users in the country, which stems from the rigid and hierarchical processes embedded in the fabric of most organisations in GCC countries.
The general preference for in-country datacentres and the desire to capitalise on investments have meant that much of the cloud expenditure in the UAE is currently on private cloud rather than public cloud. IDC expects this trend to continue in the near future. However, in the longer term, the IDC expects public cloud to catch up in terms of adoption and expenditure.
Cloud is also having a significant impact on the partner landscape, with new partners emerging, existing partners upskilling, and many local providers resisting the concept altogether. It is also creating new competitors in the IT services space, as telecom operators, niche ISVs, and wholesale datacenter providers all seek a foothold in the space. Cloud is also set to impact overall spending on IT services, cannibalising some services while driving demand for others.