As the GCC's digital infrastructure expands at an astonishing rate, hyperscale data centers will be key to its success.
However, the Persian Gulf states have historically been reluctant to keep classified data outside of sovereign territory, a preference stemming from cultural and regulatory concerns.
Cloud culture
From a cultural perspective, countries such as Saudi Arabia and the United Arab Emirates (UAE) have been cautious, if not outright, protectionist, in their attitudes towards state information and institutions. It is also worth noting that this state of affairs remains the norm in the corporate environment in the region.
However, since the pandemic, the attitude of the authorities** and business executives towards public cloud storage has softened. "The three years of forced commerce have accelerated digitalization in the Gulf region, allowing businesses to feel the power of the public cloud – flexibility, scalability and security," said cloud expert Manish Ranjan. ”
Business leaders are also wary of storing data because of the region's plethora of personal data and privacy legislation. But as on-premises cloud storage options such as tiering, colocation, and hyperscale entered the market, that mindset began to change.
Migrate to the cloud at scale
Today, a large number of Gulf industries are migrating to the cloud. The mass adoption of various new technologies in the region requires a move towards the cloud – especially artificial intelligence (AI), Internet of Things (IoT) and cybersecurity. The rapid digitalization of the region's banking and transportation sectors has led to a particularly strong demand for modern customer service solutions.
As a result, according to Blue We**e Consulting, the public cloud market in the Middle East is expected to be worth $9.9 billion by 2027, growing at a CAGR of 207%。
The region is relatively late to the world's hyperscale data centers, but its reach is expanding. The island nation of Bahrain reached an agreement with AWS in 2019 with strong support, and is the first country in the Gulf region to embrace global hyperscale data centers. Since then, the UAE has signed agreements with Microsoft Azure, AWS, Oracle, and China's Alibaba.
In mid-November, Saudi Arabia added to the country's data center roster with the launch of its first Google Cloud Center. Saudi Arabia's data centers already include Oracle, SAP, and a data center co-hosted by Saudi Telecommunications and Alibaba, and Qatar has also shown its ambition and willingness to go to the cloud, with Microsoft and Google both opening global cloud centers in Qatar.
Cloud expert Ranjan is particularly concerned about the Saudi market, which is backed by hundreds of large-scale projects.
Regional solutions
However, despite recognizing the huge business benefits of the public cloud, many businesses in the region are concerned about potential vulnerabilities in data privacy, overall security, and regulatory compliance.
Given this regional sentiment, the introduction of solutions that enable enterprises to retain data while taking advantage of global hyperscale is key to the growth of the region's public cloud market.
Sovereign data centers such as Core42 in Abu Dhabi are increasingly partnering with global industry giants such as AWS to maintain limited offshore data sharing, while also taking advantage of the flexibility, scalability, and security offered by global public cloud innovators.
The growing community of local cloud data service partners, including Snowflake UAE and the recently launched Genesys Cloud CX UAE, enables local enterprises with UAE and GCC regulatory compliance and data residency obligations to move their customer contact centers to the cloud while keeping sensitive customer data on-premises. Whether through colocation or partnerships, the growing preference for public clouds in the Gulf region is driving a growing market for related cybersecurity services.
While many global security** players already operate in the UAE through regional offices or distribution agreements, local players are also looking for a piece of the action. The most recent example is the Dubai Water and Water Authority's (DEWA) digital arm, Moro Hub, which announced on November 17 a cloud security partnership with French defense company Thales.
Whether in the form of co-hosting or otherwise, the opportunities for cloud security companies are considerable and growing as Gulf continues to advance its public cloud journey.
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