Page 87 - Bloomberg Businessweek-October 29, 2018

◼ SOLUTIONS Bloomberg Businessweek October 29, 2018

Microsoft and Amazon quickly growing
It’s a small but
Look to the Middle East market for public
cloud services

Dubai Airports Co. uses Microsoft’s Azure cloud service major backer of technology investments, including arti-
for the Wi-Fi it offers travelers. But for most other applica- ficial intelligence or blockchain. “We see a lot of potential
tions, it spends a lot of money and uses precious square in the Middle East as countries are going through eco-
footage to run its own servers. The airport company is nomic transformations, where cloud technology can be
partly owned by the United Arab Emirates government, a key enabler for advanced citizen services and smart
and local law requires data related to government enti- city initiatives,” says Zubin Chagpar, head of Middle East
ties to be stored in the country. and Africa for AWS. “This is also a region with a young
“We’d rather use that space and energy for airplanes and tech-savvy population.”
and passengers and bags than for data centers,” says In a poll conducted last year by Microsoft, 51 percent of
Michael Ibbitson, the company’s executive vice president almost 1,000 companies in the Gulf Cooperation Council,
for technology and infrastructure. His wish will soon be a a group that includes Bahrain, Kuwait, and the UAE, said
reality. Next year, Microsoft Corp. is expected to cut the rib- cloud computing will be a 2018 priority. Some smaller com-
bon on a data center in Dubai, a move that will potentially panies have already moved in: Alibaba Group Holding Ltd.
bring in a lot more business from existing clients, includ- has provided cloud services in the region since 2016. The
ing the airport operator. Ibbitson says that as soon as the real growth will come next year, says Tiny Haynes, an ana-
Azure center is open, the airport will consider transferring lyst at Gartner Inc. He also expects upcoming data cen-
files there, including financial data. ters in Saudi Arabia and Qatar.
The Middle East’s largely untapped frontier for cloud Amazon.com Inc. already has dozens of clients in the
services will see even more activity in 2019. Microsoft is region, including ride-hailing startup Careem; Saudi Arabia’s 47
also planning a data center in Abu Dhabi next year. And Al Tayyar Travel Group; and the Dubai-based broadcaster
Amazon Web Services (AWS), the No. 1 cloud provider glob- MBC Group. Bahrain’s Information and EGovernment
ally, will open a center in Bahrain. “The region is one of Authority is moving all government services online and
the fastest-growing public cloud services markets,” says working with AWS to store data and provide computing
Megha Kumar, an analyst for IDC Research Inc. in Dubai. power for its websites and applications.
“The potential is huge given the ambitions of the public sec- Saurabh Verma, associate director for the digital trans-
tor and their drive for innovation.” formation practice at consultant Frost & Sullivan Inc., says
The Middle East and Africa regions are worth $2.2 bil- there’s little local competition. Given that the market is
lion to cloud vendors, IDC says. That’s projected to small—the U.S. cloud market is worth $99 billion—Amazon
grow 24 percent a year on average, reaching $9 billion and Microsoft have the chance to establish themselves
in 2022. And the public sector in the Middle East is a early and show a commitment to the region that will help
them win more business. “We are making decades-long
bets. Some of them are more about future growth than
Where the data centers are current market size,” says Julia White, vice president for
Microsoft Azure Amazon Web Services Announced marketing at Azure.
Geopolitical tensions could complicate plans, as gov-
Americas ernment and corporate leaders decide how to respond to
17 2 the killing of Saudi journalist Jamal Khashoggi. That’s a risk
7 1 tech com panies have to weigh as they enter these markets,
Europe says Matt Scott, vice president for strategy and alliances
8 6 at Cloudability Inc., a partner of both AWS and Microsoft.
4 1 “You do have this constantly evolving political situation in
Asia Pacific that region, and they will have to make a political calcula-
17 tion,” he said. “But the customers are there.” �Dina Bass
8 1
Middle East and Africa
4 THE BOTTOM LINE Public-sector tech investments have made the
Middle East a promising market for cloud services. Together with Africa, it’s
1
DATA: MICROSOFT; AMAZON WEB SERVICES worth $2.2 billion to vendors. That’s projected to grow to $9 billion by 2022.