Cloud computing could be one of the keys that will help create a smarter and more efficient Saudi Arabia. However, the authorities recognise that any plans for cloud technology need to be balanced with national security concerns. When the Ministry of Interior chaired a meeting to discuss the implications of the cloud in November 2014, it invited the Ministry of National Guard, the Ministry of Defence and Aviation, the Presidency of the Royal Guard and the General Intelligence Presidency, as well as the ministries representing industry, commerce and communications.
Weighing up the threats posed by the cloud against its opportunities is not a new exercise in Saudi Arabia, nor for that matter in many other countries. The threat was addressed in Saudi Arabia in 2007 with a royal decree announcing the Anti-Cyber Crime Law. “The future is centred around cloud computing and mobile technology,” Abdullah Al Kasabi, general manager of Adaptive Techsoft, told OBG. “This is a global trend, but you are seeing both areas booming in Saudi Arabia. The end user is increasingly receptive to the concept of the cloud and is now embracing services such as Google Drive and Dropbox.” However, many institutional and corporate bodies in Saudi Arabia remain concerned about the prospect of their data leaving the Kingdom and this has created opportunities for data centres and a market for tailored cyber-security measures.
Hybrid Cloud Opportunities
The Ministry of Interior meeting held in Saudi Arabia in November 2014 took place a few weeks after an EMC2 Forum in Riyadh on IT in business that was attended by delegates from all over the world. During the forum, local and international delegates – including 1127 Saudis – were interviewed about their views on future developments in IT and the prospects for cloud-based services. EMC2 research showed that 32% of Saudi respondents said their organisations were using hybrid cloud solutions through which some storage was handled by external providers, with some data stored in-house. This compared to 39% of US companies and 36% of UK firms surveyed. When the delegates were asked which sectors were most appropriate for hybrid cloud services, telecoms scored highest with 38%, followed by entertainment and media on 26%, and manufacturing, energy and utilities on 22%. The research showed that health care (20%), financial services (19%) and the government sector (18%) were judged the least appropriate sectors for hybrid cloud services. However, Saudi delegates were among the most positive in their response to the possibilities of hybrid cloud solutions, with 76% saying a hybrid public-private cloud would combine agility with security and 86% predicting next-generation technologies would give them a competitive edge.
The survey’s results about the reluctance of government bodies to use hybrid cloud solutions, rather than their own facilities, chimed with the views of Abdul Rahman Al Thehaiban, vice-president of Oracle’s Middle East and Africa division. “The government will not consider private sector hosting of government information outside of the Kingdom,” Al Thehaiban told OBG. “However, the government should work with vendors to see what solutions can be offered and spend more time coordinating with them directly. The government should develop plans and then hire consultants to help execute these plans.” However, Al Thehaiban cautions that a one-size-fits-all solution for the government in Saudi Arabia would not be practical despite the fact that there is a higher degree of centralisation than in many jurisdictions. “The ministries are all very different so this puts too much pressure when done at the national level. It makes sense to outsource some things, but conservative institutions like government and banks will be slow to outsource.”
Despite difficulties in persuading the public sector to work with hybrid solutions, Oracle sees the Kingdom as the potential hub for the region, given the popularity of cloud solutions with other sectors of the economy. Samir No’man, president of Microsoft Arabia, told OBG, “Hybrid cloud responds to customer requirements for more agile, scalable and cost-effective resources. Enterprises can take advantage of external resources when it makes sense for their business. The advantage of storage, back-up and recovery options will increase the efficiency and reduce cost.”
The state’s reluctance to consider international data storage presents the country’s ICT sector with an opportunity to work with the public sector to provide bespoke storage solutions. However, some businesses in the country feel the government could be doing more to work with home-grown talent.
“There need to be rules in place that support localisation of data to build and protect local data ecosystems to prevent them from going to global clouds, like those of Microsoft and Google,” Amjad Abdel Hafez, CEO of the ICT company Nournet, told OBG. Nournet is building its own 4000-sq-metre data centre in Riyadh, and sees business expanding to potentially serve the wider region. He added, “Saudi Arabia is 70% of the Middle East market, so just by satisfying the market you are in a good position to also satisfy the rest of the region.”
The International Data Corporation forecasts spending on private cloud services in Saudi Arabia will reach $31.3m in 2015, growing at a year-on-year rate of 64%. It predicts spending on public cloud services in the Kingdom such as software as a service (SaaS) offerings from SAP, Oracle, Microsoft will reach $46.16m, as businesses see the benefits of scalability, ease of use, low management overheads and low upfront licensing investment required to run the customer relationship management, collaboration tools and office productivity applications these international companies offer.
The EMC2 survey suggested that telecommunications businesses were the most likely to be prepared to work with international firms to build data centres, and this has certainly been the case with the two largest mobile businesses in Saudi Arabia. Mobily has been working with Virtustream to provide enterprise cloud services since 2013, and in the same year it signed an agreement with SAP to introduce its cloudbased applications to Mobily’s business users. In March 2015 STC signed an agreement with Cisco to build three data centres in Riyadh and Dammam, the largest installation of Cisco Application Centric Infrastructure in the Middle East at that point.
Abdulaziz Al Sugair, former chairman of STC, said, “The new data centre solutions will allow STC’s IT infrastructure to meet business demands for new applications as well as accelerate application deployment cycles to drive faster business processes and improve our customer offering.” Mohammed Alabbadi, general manager, Cisco Saudi Arabia, said the data centres would enable customers in Saudi Arabia to benefit from the next wave of the internet’s development. He told OBG, “As billions of valuable connections create an ‘Internet of Everything’ – the networked connection of people, processes, data and things – the focus on rapid and consistent application deployment has become greater and the internet has greater potential to change lives.”
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