Recently, we brought you news that Saudi Arabian IT shops are cautiously looking at the cloud as a way to save money and increase efficiency, according to a report from research house, IDC.
Now IDC is diving into the Saudi and United Arab Emirates (UAE) markets for managed IT services, and seeing these services taking hold quicker than the cloud.
In Saudi Arabia, the desire for privacy and security of corporate data leads IT managers in the kingdom to cast a wary eye toward the cloud. Also, the penetration of virtualization, which lies underneath cloud services, is low.
Managed IT services apparently cause fewer concerns. Like with the cloud, the driving factor is improved efficiency of operations.
IDC found that managed and data center services are growing 16 and 20 percent per year, respectively, and the two markets constitute just over a half billion dollars in annual sales.
This is quite a change for the two countries, which have traditionally been reluctant to embrace this sort of outsourcing. “This region has traditionally not been very pro outsourcing,” noted Saurabh Verma, program manager for IT services at IDC Middle East, Africa, and Turkey. “However, prevailing macroeconomic conditions, changing customer priorities, dynamic market conditions, and a variety of other factors have created a strong value proposition for managed services. Organizations are being pushed to reduce their operating expenses and increase efficiency at the same time, and many are finding it very difficult to improve their processes with in-house IT resources.”
“In addition,” he added, “intensifying competition and increasingly demanding customers are driving them to outsource their ‘peripheral’ activities and focus more on their core business.”
Top services include shared Web hosting, colocation, and dedicated server hosting.
In the region, customers tend to not go all in for services, and don’t generally allow a service provider to take over large swathes of the IT operation. Instead customers hand off smaller portions of their infrastructure.
“Discrete outsourcing, shorter contract durations, smaller contract sizes, and the flexibility that comes with not having to transfer resources are combining to make managed services a strong value proposition for the region’s businesses,” said Verma. “All of these attributes enable customers to ‘test the water’ before opting to evaluate a larger outsourcing contract with their supplier. As such, we believe that both managed and datacenter services will continue to witness strong growth in the UAE and Saudi Arabia over the coming years.”
Cisco
Cisco is one company staking its claim in Saudi Arabia with a three-year-old partnership with Saudi telecom company, Etihad Etisalat, who now bases its Mobily managed services on Cisco data center gear.
These services include managed firewalls, managed hosted servers, managed backup and recovery, and managed business communications.
Edited by
Braden Becker
