‘Three Forces are Driving the New Cloud Shift for Organizations in Saudi Arabia,’ says Nutanix Saudi Country Head
Riyadh, KSA, 25 March 2021: Cloud adoption is accelerating in Saudi during the pandemic as organizations seek to rapidly deploy applications, tools, and services that are suited to remote working. But the ways in which clouds are being deployed, and the reasons why, have changed. Mohammad Abulhouf, General Manager, Saudi & Bahrain at Nutanix outlines the three reasons why organizations in the country are moving more of their assets to the cloud and what this change in mindset will mean for the ways in which progressive businesses are run.
But first, let’s look at the business IT context today. It is no secret that cloud computing has saved businesses by providing a way to keep going through lockdowns. The emerging consensus of wisdom suggests that many, if not most, companies will allow more flexible and home working even after the pandemic has ceased to dominate decision-making.
That means that the cloud’s ongoing transition continues, often as part of a broader business transformation strategic exercise. The scale of this can’t be overstated. Gartner suggests that 45 percent of spending on infrastructure, applications, and business process outsourcing will shift to the cloud by 2024. That’s a growth in cloud infrastructure services spending that will be worth $63bn in 2020 and $81bn next year, compared to $44bn last year. Meanwhile, the traditional datacentre sees a sharp decline, spending down 10 percent to $188bn in 2019. So, there’s plenty more to come, but the trend line is apparent.
“The proportion of IT spending that is being allocated to the cloud will accelerate even further in the aftermath of the COVID-19 crisis, as companies look to improve operational efficiencies,” says Ed Anderson, Distinguished VP Analyst at Gartner. And the number of applications and services that are on-premises become fewer and fewer.
Reasons to change
But the reasons for cloud deployment are also changing. Cloud initially soared, in part, because the subscription billing model made more sense than the old enterprise software licensing. Capital expenditure was replaced by operating expenditure, and companies paid on a utility basis. Financial flexibility was the cloud’s trump card, and it meant that cloud users could trial ideas at meager cost and very quickly. In many ways, the cloud brought the Silicon Valley ethos of “fail fast” into the corporate mainstream.
Now, however, things have changed. Companies actually accept that they might end up paying more for cloud over time compared to on-premises IT but accept this as a price worth the outlay. And three factors are driving the second wave of cloud acceptance or what Gartner calls “cloud shift.” These are agility, security, and AI: let’s look at them one by one.
Agility. In uncertain times, companies need to try things out, change strategy quickly, and dial capacity up and down on an ‘as needs basis. High-street retailers moving online, restaurants becoming delivery-only providers, face-to-face meetings becoming Zoom calls, complex ‘what if’ scenario modeling for strategic change… all of these are examples of why it’s critical to move fast, and only the cloud has that affordable flexibility and capacity.
Security. Originally seen as a weak point of cloud, the argument has become reversed. Few organizations can protect themselves as effectively as the cloud providers that run some of the world’s largest datacentres, have visibility into every conceivable incoming threat, can build in processes that detect and monitor suspicious behavior, and can afford to hire squadrons of experts in their fields. All of this means that security has become a cloud positive.
AI. Cloud is acting as an on-ramp for companies seeking new things and provides the tools, elastic compute power, and infrastructure. Look, for example, at Google Cloud AI as a way to access pre-packaged solutions, building blocks, and developer tools. AI has arguably proceeded more slowly than the hype would suggest. Still, most of us will agree that it is one of the most powerful technologies that can be deployed over the coming years to automate and accelerate decision-making, processes, and the creation of insights.
These three factors are driving more and more cloud adoption, but what sort? I believe that it’s inevitable that companies will run multiple clouds to avoid lock-in and to be able to shift workloads, when needed, over time. Using more than one cloud platform will also support disaster recovery, business continuity planning, and regulatory compliance. The new focus of attention will move away from individual clouds used for their merits on a ‘horses for courses’ basis. Instead, the power base will move towards ‘data planes’ that provide a way for CIOs to manage across APIs and move services dynamically between clouds to maintain optimal business flexibility and operational fluidity.
Of course, this won’t happen overnight. These changes will take multiple years, and challenges such as application modernization shouldn’t be underestimated. Most established Saudi companies will likely continue to run some operations from their data centers for a while yet. But the organizations that are already acting and moving to multi-cloud will be the most secure, fast-moving, and decisive. And they will be best placed to bounce back first and be prosperous, whatever gets thrown at us in 2021.
