In recent years, a confluence of factors like broadband infrastructure, social awareness and mobile penetration have given the ICT sector a major boost in the Middle East. The region as a whole is set to spend over $20bn on information technology in 2012, a 10% increase compared to 2011, according to US-based market research firm Frost & Sullivan. Much of that spending is going toward new software and technology innovations, especially as companies turn to IT solutions to implement cost-cutting measures.
Cloud computing, a trend gaining traction globally, is one of these innovations. This set of technologies is centred around the idea that much of the in-house IT investments firms make could actually be outsourced. Whether it is managing hard infrastructure like servers and databases or software like Microsoft Office and email clients, many day-to-day IT needs can be filled remotely, purveyors of these services point out. Using cloud services could offer several benefits over traditional computing. Up-front capital expenditures for hardware like servers can be eliminated, while operational expenditures like in-house IT departments may be slimmed down, since a cloud service provider can combine these labour costs with its own infrastructure.
These potential benefits have driven firms to offer cloud solutions. “Today everybody is talking about cloud and people have accepted the technology. Apart from Google, now HP, IBM, Microsoft and various others are giving cloud services,” Rahul Bhavsar, the CEO of Muscat-based Gulf Infotech, told the Oman Economic Review magazine in September 2012. “Initially we had to educate people about the benefit of moving to cloud… [W]hen we started, the recession was going, and so the cloud worked out to be a cost-effective solution. We got initial customers, especially those who did not want to spend heavily on servers and software. They moved to cloud to see whether they could save money.”
The Road Ahead
The sector has major cost-savings potential, although it may take time for organisations to begin adopting these technologies. In Oman, the segment is still in its infancy, and two key factors – bandwidth and security – are keeping some firms from diving in. Bandwidth is crucial because it is the lifeblood of all cloud services. Remote connectivity can only function in an environment with a fast and stable broadband connection. “If I have a small business and I want to get cloud services, I need to be online 24/7 so that I can access my data or files anytime I need them, from a mobile or a computer,” Haitham Abu Nasser, general manager and partner at Muscat-based Integrated Systems, told OBG. “So, as fixed-line infrastructure becomes stronger, both cloud service providers and small businesses stand to gain.” As the government, Omantel and Nawras continue taking steps to expand Oman’s broadband connectivity, bandwidth as a limiting factor will likely shrink. Total fixed and mobile broadband subscriptions have grown more than tenfold between 2008 and 2011, from 52,012 to 610,768.
As for security, progress is also being made. Because using cloud services means frequently transmitting large quantities of potentially sensitive information, some companies shirk from IT models that invest too heavily in cloud systems. In Oman, security reasons are at the front of policymakers’ minds when discussing the possibility of putting more government agencies on the cloud. In 2012 the Oman National Computer Readiness Team hosted workshops on web security and cyber safety for participants in the public and private sectors. The organisation aims to raise awareness and overall readiness against breaches.
As demand for cloud services grows, demand for cyber security could rise. Across the region, spending on such services is set to rise by over 18% between 2012 and 2018, according to a report from Frost & Sullivan. Even with infrastructure and security challenges on the path forward, momentum seems to be on the side of the sector. With some of the world’s largest tech firms – Google, Apple, Microsoft and Amazon, to name a few – all competing to advance these technologies, the sultanate’s businesses and consumers are set to win.