How digital transformation is driving data centre boom
The public cloud services market in the Middle East and North Africa is projected to grow to $1.9 billion (Dh7.97 billion) by 2020.
Regional businesses will surely be pondering with most global data centres making forays in the Middle East, especially in determining which of them is the right one to choose from as a one-size-fits all strategy seldomly helps, as every sector and business is unique and has different needs.
Top global IT brands have opened their data centres in the UAE and, obviously, a certain demand forecast must have been deployed before opening their hubs in the desert. Jeroen Schlosser, managing director of Equinix Mena, said: "The current trend of the world's biggest technology firms building data centres in the Middle East is a result of the countries in the region diversifying their economies. Digital transformation initiatives across the public and private sector are driving the need to build state-of-the-art data centres to support the transformation journeys of enterprises."
In a world where cloud dominates and enterprise business models are interdependent, the demands placed on connectivity have reached a new high. The evolving digital supply chain is being driven by many different factors including the growing adoption of cloud services, Web and mobile storefronts, social media and big data analytics. The co-located data centre is fast becoming the hub of the new digital supply chain.
"As more Middle East businesses embrace multi-cloud and hybrid cloud infrastructures, greater demand for private interconnection is expected between businesses and the cloud and IT provider. Proximity between private and public cloud environments enable organisations to lower latency and networking costs. This is where we see private interconnection coming into play with many of our customers," added Schlosser.
Recently, Microsoft chose the UAE to open its first two data centres in the Middle East to meet the demand of a four-fold spending increase in cloud services forecast for the region between 2017-22. With new data centres in Abu Dhabi and Dubai, Microsoft's global network has reached 55 and it will be launching eight more in the coming months. The investment in data storage in Saudi Arabia and the UAE is set to rise to more than Dh1.5 billion in 2022, according to the International Data Corporation.
"Microsoft wants to empower the UAE and support its national agenda, and which was affirmed by setting up of our local data centres here, and these data centres are as capable as any of our global data centres, which provide highly-available, secure, compliant intelligent cloud, which to some extent have been off limits for, let's say, the government-owned financial sector that has greater requirements such as regulatory and data residency," said Mohammed Arif, director for modern workplace and security at Microsoft UAE.
"We will continue to build on the regulatory requirements and enable customers in the public and the private sector to drive their digital transformation journeys."
For regional enterprises, moving to a cloud system hosted by a specialised company proves cheaper than creating their own infrastructure of servers, hardware and security networks. The public cloud services market in the Middle East and North Africa is projected to grow to $1.9 billion (Dh7.97 billion) by 2020, double what it was in 2016, according to Statista.
Microsoft's technology and cloud services together will help create more than 110,000 jobs in Saudi Arabia and UAE by the end of 2022, according to IDC, with jobs in data science, blockchain architecture and AI. The surge in global data centres in the UAE assures the businesses that data stays locally which will enable government organisations to comply with local regulatory frameworks.
Hyther Nizam, president for the MEA at Zoho, said: "More supply is good for customers and can bring down the hosting cost. However, I don't feel there is too much of supply to data centre and hosting options. Data centre providers are looking it as long term investment as it's evident now that cloud is the future. They want to be well-positioned to serve that demand as we see more governments bodies, organisations and startups embracing cloud to accelerate the digital transformation."
Data centres will continue to see some growth owing to the surge in data to meet the requirements for 5G and AI environments. However, the nature of data management operation is changing: The data centre is no longer limited to on-premise, but also integrates very well with the public cloud.
Fadi Kanafani, Middle East managing director and general manager at NetApp, said: "The most common scenarios though have been hybrid cloud where the customer is getting to leverage cloud resources for disaster recovery, backups and others as service solutions but keeping their production and critical data on premise. We are seeing a lot of workloads being pushed to the cloud and managed in the cloud, while some workloads stay and grow in the data centre based on applications and the workload requirements."
"In short, the data centre is here to stay for many more years to come. We are hearing a lot about digital transformation lately. Although, this may sound complicated; it is not. It is all about how an organisation will manage its data to embark on its digital journey. Step one starts by putting together a strategy to become data-driven. Starting with on-prem", businesses ought to consider modernising their legacy data centre with solutions that will allow them to do more with less, lower their TCO, become more agile, and make their environments less complex to manage and administer," Kanafani added.
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