How outsourcing data centre operations can drive the growth of Middle East companies

Data is considered the new oil. According to estimates, in 2021 alone, there will be 74 zettabytes of generated data and it is expected to reach 149 zettabytes by 2024. Several factors are driving demand for data consumption. These include the Internet of Things that gives rise to the interconnectedness of devices and the exchange of large volumes of data; a noticeable shift in media content skewed towards content delivery networks and the growth in demand for 4k and 8k content; the use of cloud-based services by businesses; the integration of AI into services; and the growth of big data.

The rapid increase in the generation and consumption of data has meant an exponential and parallel increase in the demand for data centres that can store, analyse and process all the data.

While individual companies can build their own data centres, the advantages of outsourcing these operations are numerous. The advantages include relying on state-of-the-art infrastructure from data centre specialists, reduced downtime due to expertise by teams servicing the external data centres, increased scalability that allows companies to rapidly expand their operations without having to worry about upgrading their data centres, besides companies not having to worry about complying with local and international regulations as the data centres that they choose to work with would have already secured the necessary certification and will constantly upgrade themselves to be abreast with latest developments within the data storage field.

Setting up data centres can be a costly affair too. On average, an enterprise data centre costs between $10m-$12m per megawatt to build. A typical edge data centre costs between $8m-$9m. Outsourcing could offset the initial building cost of these data centres and also the subsequent costs of the maintenance and inevitable frequent necessary upgrading of the physical infrastructure and software at these centres.

In 2019, global data center service provider Comarch opened its new data centre in the Middle East in Dubai inviting entities from the region to use its data centre. The choice of location was telling for not only private enterprises, but public entities were also pushing forward a wide-ranging digital transformation agenda within the country. In September last year, Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, said that the priority of the UAE is to increase the contribution of the digital economy in the national economy, promote smart infrastructure, and enhance the digital readiness of the UAE government to ensure business continuity regardless of the circumstances. He added that the digital economy’s contribution to local GDP in 2019 reached 4.3 per cent, with a minister appointed to double that contribution. He added that plans for the UAE’s digital economy sector will focus on creating a financial cooperation economy, freelance economy, digital markets, sharing economy, digital content economy, and information and data economy.

Cloud computing specifically has boomed within the region, and according to the International Data Company (IDC), the total cloud spending by public and private entities in the GCC is expected to reach $2.5bn by 2025.

For further growth of data centres in the region, creating physical infrastructure that supports it will be of paramount importance. Equally though legislative and regulatory frameworks that determine the guidelines under which data is stored, shared and disseminated will be vital. Countries like the UAE have taken the lead. As part of its recent Projects of the 50, it recently unveiled a new data law to ensure privacy of individuals and international companies.

The federal law, designed in partnership with major international technology companies, gives individuals the freedom to control the way their personal information is used, stored and shared, and in a manner that supports preserving the privacy of individuals and institutions in the country.

To ensure data protection, Comarch has pushed forward an advanced cybersecurity architecture (Tier III and Tier IV) and a number of business models (SaaS, PaaS, IaaS) at its data centres, with data backed up at least once a day. Its data centres are compliant with international regulatory standards including ISAE 3402 type I and IIUS, ISO / IEC 27001:2007 “Information Security Management Systems”, PCI DSS certification and GDPR.

Comarch says that the shortest-term agreement for its data centre can be a year. However, it recommends a minimum contract time of three years to maximize a return on investment.

Data centres will undoubtedly play a crucial role in the digital transformation strategies employed by governments and private entities going forward. Outsourcing to the right managed data centre will be a dealmaker for the successful digital transformation of companies and entire economies.

For more details on Comarch, click here