In the Middle East, enterprises are gradually warming up to the idea of cloud adoption. According to McKinsey, the cloud could generate as much as $183 billion by 2030, equivalent to roughly 6 percent of the region’s current GDP.

However, the cloud migration journey is laden with several obstacles. Read as we look at the Middle East’s cloud revolution and provide tips on how you can navigate challenges and capitalize on opportunities.

The Cloud Adoption Challenges in the Middle East

Companies worldwide are embracing the power of the cloud to do things they’ve never done before. Cloud has become the go-to for almost every possible business operation. Want to store terabytes of data? Looking to streamline employee communication? Need to strengthen disaster recovery capabilities? The answer to all these questions is the cloud. 

As the Middle East region looks to maximize the cloud’s capabilities, it faces several hurdles and challenges.

• Lack of established colocation options: Despite the government’s commitment to fostering a thriving digital economy, the Middle East has restricted access to cloud computing environments. The lack of established colocation options poses a significant barrier to successful and widespread cloud adoption, limiting the ability of cloud providers to offer a broader range of services. Limited choices also create a single point of failure, creating potential security concerns if the vendor experiences service disruptions.
• Poor network connectivity in some regions: Many regions in the Middle East are relatively small, with their economies concentrated, and the supply of cloud services by international companies limited. For instance, countries like the UAE and Qatar are at the leading edge of technological innovations. At the same time, those like Yemen and Syria continue to face the brunt of poor development and limited government support.
• Regulatory and data security concerns: Another reason for the slow pace of cloud adoption in the Middle East concerns data security. Regulatory uncertainty curtails demand, particularly regarding where different data types can be stored. Many government bodies still demand that sensitive data be stored within the country’s data centers, shunning big cloud providers from making cloud investments.
• High costs: The limited number of cloud and internet service providers increases bandwidth costs. According to a 2023 report, the average price per Mbps per month for bandwidth in the Middle East was $4.00, compared to $2.50 in North America. This swelled cost discourages cloud providers from investing in infrastructure and offering competitive pricing, ultimately hindering the overall growth of cloud infrastructure. At the same time, building and maintaining high-capacity fiber optic cables is expensive in the Middle East, adding a significant cost burden to cloud infrastructure development.

Maximizing Cloud ROI

Despite the many challenges slowing the pace of cloud adoption in the Middle East, the situation is fast changing. Many regional governments want to diversify and digitize their economies, partnering with cloud service providers like AWS to establish state-of-the-art data centers.

According to McKinsey, five major international CSPs are expected to operate in Saudi Arabia alone by 2030, providing data center capacity of 1,300 megawatts in addition to what is available from local providers. Companies are also tweaking their legislative and regulatory landscapes in line with international standards to attract cloud investments.

Against this changing backdrop, companies must start driving their efforts to kickstart and or advance their cloud migration journey and capture value quickly. Here’s how firms should set their foot forward:

•   Prioritize use cases: Although critical to business success, cloud migration can run over budget if not planned properly. Prioritizing high-value use cases can enable you to take advantage of the cloud’s benefits in a time- and cost-effective manner. Moving data or workloads to the cloud in a phased manner, instead of a Big Bang approach, can help build a scalable cloud strategy that securely and successfully supports your company’s ambitions.
•   Modernize legacy applications: If you want to embrace the cloud to lower IT costs and increase resiliency, you must consider modernizing or remediating existing applications. This can help you capture the cloud’s actual value, reduce software and hardware costs, and improve development productivity. Modernizing legacy applications can make them more suitable for operating across cloud environments while also supporting the integration of modern AI innovations.
•   Opt for SaaS solutions: If data privacy concerns you, software-as-a-service (SaaS) solutions are a great way to make the most of the cloud without compromising security. SaaS platforms can allow you to store public information on the cloud while keeping sensitive data on-premises. You can also opt to store private data in private clouds.
•   Build a multi-cloud strategy: Opting for cloud services from two or more cloud providers can allow you to pick and choose capabilities that best suit your business needs. A multi-cloud strategy can also help minimize the chances of vendor lock-in while providing flexibility to migrate, build, and optimize applications across multiple clouds and computing environments. 
•   Embrace an agile model: Cloud migration is an ongoing process that requires continuous planning, implementation, and upkeep. Embracing an agile product operating model can streamline this process and allow you to make the most of the cloud’s innovations. Such a model can also allow you to address unique challenges as they emerge while acting on feedback and ensuring continuous improvement.
•   Invest in cloud talent: Finding, hiring, and retaining the right cloud talent can be challenging, especially as every company looks to accelerate cloud adoption. Recruiting and developing talent locally while outsourcing complex cloud-related activities to a qualified 3rd party vendor can help fill the skills gap. You must also set up training programs to upskill existing talent, teaching them new coding techniques, engineering approaches, and design patterns.
•   Engage with cloud providers with regional expertise: The Middle East regulatory landscape can be tricky to navigate. Therefore, it makes sense to engage with cloud providers with regional presence and expertise. Such providers will better understand the regulatory environment, allowing you to optimize your cloud strategy as it changes.
•   Monitor and optimize cloud consumption: The ease of operating a business on the cloud can lead to sudden and unplanned investments in new tools and instances. To keep cloud costs in check, it pays to monitor consumption and take steps to optimize workloads. Identifying the best ways to migrate or run applications, restricting access to cloud services, and consuming cloud services thoughtfully are additional ways to promote a cost-effective cloud migration mindset.

As Middle Eastern governments work to establish a conducive cloud operating environment, companies looking to strengthen their regional presence must act quickly.

enreap has helped an electronic retail chain in Saudi Arabia with 40+ stores and millions of shoppers move their core workflows to the cloud and achieve a 115% increase in ROI, a 60% reduction in manual tasks, and $1.14M worth of cost savings!

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