Growing cloud begins to appear on horizon
REGIONALLY, ORGANISATIONS ARE SLOWER TO ADOPT THE SYSTEM
Nokia shareholders on Wednesday approved a $17.6 billion (Dh64.6 billion) buyout of internet and cloud services provider Alcatel-Lucent.
IBM has set its cloud infrastructure unit SoftLayer a $1 billion revenue target, an increase of around 25 per cent, for 2016, reports revealed yesterday.
With other tech giants, including Microsoft and Oracle, focusing increasingly on their cloud-based services, there is little doubt that the business landscape is on the cusp of a change, and the Gulf Cooperation Council (GCC) nations will be no exception.
“Eventually the software company will take clients for ransom in that sense,” said Nitin Khanapurkar, a partner at KPMG Lower Gulf and the author of the book The Cloud: Changing the Business Ecosystem. “They’ll have no choice but to go for a cloud model. When you look now at the strategy which Oracle is adopting, eventually they want to move everything to cloud.
“They will not say so in so many words, but their licensing, the way they are talking about their applications, the new version is all cloud based. When it will happen, that’s a matter of time, but that’s what’s happening on the software side of it.”
Data storage risk
Regionally, organisations are proving slower to adopt cloud, he said, citing concerns over data storage, risk and existing investment.
“If you look at the GCC market, and if you look at the landscape from software publishers, Oracle has the dominant market share, then it’s all distributed between Microsoft and SAP and all that. Now all of them are very cloud focused, and they have strategies to go cloud based, so it’s a matter of time.
“It will not happen right now because of investment into the infrastructure. It’s not very easy to move everything to the cloud because there are so many concerns still not answered: What happens if there’s a cloudburst? What happens under privacy if I want to take the data back? These questions are not really answered.”
Despite the concerns, Khanapurkar said the cloud offered start-ups professional-grade software without heavy capital investment, while large organisations who have already invested heavily in IT infrastructure and applications would be slower to switch.
“It has given suddenly an enormous opportunity to the start-ups to use the cuttingedge technology which they would not even aspire or dare to think of five or ten years back. This adoption, which will happen, start-ups will go much faster towards it because they can’t afford to invest in infrastructure, they’re tight on their Capex, they are focused literally on business.
Level playing field
“Today as a start-up I can still go on salesforce.com and pay that $200, I get the same application which was available to the bigger firm. So that has created a level playing field.
“At the same time, the big organisations are on the level of maturity. I would look at my level of investment more carefully, so for me Opex is actually more important than the Capex. If I can put more money on Capex and I can optimise my operating expenditure and return on investment is bigger, I might as well go for the infrastructure investment. For large corporations the advantage is in the private cloud. They can use the cloud model to optimise their computing power within their organisation, which is sub-optimally used.”