With data centers in the UAE, Microsoft aims to rev up digital transformation

Microsoft is looking to digitally transform one million businesses in the Middle East in the next three years with the official opening of two data centres in the UAE, a top company official said.

The US software giant, which has been present in the UAE for more than 25 years, has announced one data centre each in Abu Dhabi and Dubai. Etisalat is the infrastructure partner for the Microsoft data centre. Sayed Hashish, regional general manager for Microsoft Gulf, said that the UAE is the 54th region with a Microsoft data centre. 

Globally, the company serves 20 million businesses and one billion customers across 140 countries. According to Hashish, these new facilities will enable job creation, entrepreneurship and economic growth across the Middle East.

Quoting a study conducted by research firm International Data Corporation (IDC), Hashish said that for every AED 1 spent on Microsoft products will give downstream revenue of AED 10.16. By 2022, 55,500 new jobs will be created by cloud services and the Microsoft ecosystem in the Middle East.

Data centers boom in the Middle East

Big tech companies have shown interest in the region, especially in the UAE, to open data centres. Amazon Web Services has data centres in Bahrain and the UAE. Oracle and Alibaba Cloud, the cloud computing arm of Chinese e-commerce giant Alibaba Group have also already invested in the UAE while Huawei is also set to open its data centre this year.

Hashish said the data centres will be resourced, managed and run by Microsoft and offer full intelligent cloud with Azure, Microsoft Office 365 and Dynamics 365. “The decision to have the data centres now comes from the opportunities arising from the digital transformation in the region and address some of our customers such as health care, government and public sectors’ need to have local data residency,” he said.

A Gartner analyst had highlighted that lack of local hyper-scale and large-scale data centres limit cloud adoption among businesses in the Middle East and North Africa. With regards to this, Ihsan Anabtawi, chief operating and marketing officer at Microsoft Gulf, told TechRadar Middle East: “Ours is the first hype-scale or elastic data centre in the region, which means that capacity can grow with the demand and never runs out of capacity”

He added that many regulated industries, such as financial, public, and oil and gas, which were eager to move but couldn’t because of local data regulations now be able to scale up.  “We will help every business to do two things - adopt technology in a reasonable way and build capability in a unique way.”

More openness and investment in the Cloud

Jyoti Lalchandani, vice-president and regional managing director for research firm International Data Corporation (IDC), said that one of the concerns companies had is the residing of the data outside the country. “Now with public cloud providers coming in [the region], we are going to see a lot more openness and investment in the cloud. Cloud spending is going to double in the next three years,” he said.

Regarding security and compliance, Paul Lorimer, Distinguished Engineer at Microsoft, said that Microsoft leads the industry in establishing clear security and privacy requirements in compliance with a broad set of global industry standards and the first global provider to comply with Dubai Electronic Security Centre.

According to IDC, cloud spending in the UAE is expected to grow by 30.7% to $574 million compared to $439 million last year. However, Lalchandani said that the public cloud spending for the region is expected to be $2 billion this year and $4 billion.

The real opportunity, according to him is going to be for some of the channel players and the emergence of public cloud brokers in “lift and shift” services as companies move from on-premises to the cloud.

“The on-premise [non-cloud] spending is declining quite rapidly and a lot of spending is moving to the cloud as a subscription-based model. Speed and agility are the key drivers for the cloud,” he said.