The GCC data center market is expected to reach $5.5 billion by 2028, up from $3.44 billion in 2022, at an 8.14 percent CAGR, making the region one of the world’s fastest-growing regions in terms of cloud and data adoption.
The Saudi government has implemented the Cloud First policy to encourage the adoption of cloud services.
This has persuaded major cloud service providers such as Microsoft, Tencent Cloud, Oracle, Amazon Web Services, and Alibaba Cloud to establish local cloud regions.
Though cloud adoption is rising in the region, some enterprises don’t see their desired cloud value and performance.
According to Mohamed Zouari, General Manager for Turkey, and Africa at Snowflake, there are still some challenges regarding data adoption in the region, mainly within the regulated and non-regulated companies.
He, however, pointed out that non-regulated organizations, such as CPG industries, financial services, property finder, and Kitopi in the UAE and Savola Foods in Saudi Arabia, are rapidly adopting the cloud and data cloud.
On the contrary, regulated industries are also adopting the cloud and data cloud, albeit more slowly. “When it comes to data residency and sovereignty, they must have the proper safeguards in place,” he told TRENDS
Zouari said they dealt with business organizations daily and solved their problems with the new types of architectures introduced with the data cloud.
“In the UAE, for example, we have had a regional cloud deployment on Microsoft Azure since last year. We plan the next deployment in Saudi Arabia as soon as the first hyper scales from Microsoft or Google are announced,” he said adding they were considering deploying their next cloud in Saudi because regulated industries are very important in the market.
“Typically, they account for half or more of the business regarding IT spending, particularly within government organizations in both the UAE and Saudi Arabia,” he added.
Microsoft Azure is launching a new cloud region and global data center facility in Qatar.
“The UAE was one of the first, but now we see Qatar and Saudi catching up,” Zouari said, adding that most cloud providers have either established or announced regional deployments.
“For example, we have both Microsoft Azure and Amazon Web Services in the UAE. Microsoft and Google are also expanding; They are also setting up shop in Saudi Arabia,” he explained.
Cloud data concern
Many businesses aren’t reaping the full benefits of their cloud investments. The reasons are numerous, but they are frequently traceable to a cloud architecture that needs to be optimized for business.
Zouari outlined three reasons why some businesses still hesitate to move their data to the cloud or use cloud technology.
The first is maturity and skills. According to him, there still needs to be more skills in cloud understanding and capabilities. The good news is that the partner ecosystem, such as Accenture and Deloitte, are doing a fantastic job across the region to level up those skills across organizations.
The second consideration is data sovereignty. For regulated industries, data sovereignty is critical, and the challenge is more about education than technology.
The third is the cost of public cloud capabilities. This is becoming more expensive than on-premises solutions. When it comes to public cloud and data in the cloud adoption, customers need to be aware of all the capabilities that those solutions offer to have control and visibility of the cost because leaving those new types of services in the hands of people who lack maturity and skills will undoubtedly result in unexpected bills and higher prices than expected.
“For example, at Snowflake, we take extreme care to avoid this. We offer our customers a one-of-a-kind consumption model in which they only pay for what they use,” Zouari said. “This is the first step in keeping costs low. When you pay your electricity or telecom bill, you pay for what you use. We adopt the same model but offer usage dashboards, resource monitors, and alerts.”
Zouari said that the data is the new oil for the economy. “To illustrate the power of data and why it is critical for those countries to transition from oil-driven to data-driven, one of the pillars of data is data collaboration,” he said. “As a result, a company will rely not only on its internal data but also on the data of its partners, customers, and even third-party companies.”
According to McKinsey, data collaboration can unlock up to $3 trillion in annual business value.