New tech challenger Infor builds a cloud base in Dubai

The global revolution in cloud-based business solutions offers those tech companies at the cutting edge a potentially huge new market. The GCC is no exception although security is high on the agenda.

Illustration by Alvaro Sanmarti

New York // The recent arrival in Dubai of a new contender in the regional market for cloud business solutions sets the scene for a battle over what is likely to be an increasingly lucrative sector.
After spending about US$700 million to build up its cloud-based arsenal, the New York company Infor has set its sights on the region's software champions such as Oracle, Microsoft and SAP, aiming to relieve them of market share.
Tarik Taman, Infor's general manager and managing director for South Asia, the Middle East and Africa, aims to do battle from his new Dubai base.
Speaking exclusively to The National, he says the move to the UAE is intended to build on and consolidate the foundations Infor has laid with regional customers gained through third-party vendors of its software over a decade.
Feet on the street
"Our partners that were selling for us [in the Arabian Gulf region] had their own specialities. Some work in construction on this, some work in finance on this, some sold only to hotels, so all these 1,600 customers, largely in Saudi and the UAE, they never [previously] saw the whole Infor solution or story," he says.
"It had essentially got to a point where somehow over the past 10 years we got 5,000 customers across IMEA without even having a direct presence, it was all through channel partners. It was like, 'If we can get to 5,000 customers without having any feet on the street it's time to invest - what can we do if we are there directly?' That's what we're doing," he says.
And the UAE's proximity to a future giant market was also a lure.
"Africa's the last frontier that we need to figure out because in the next three decades that's where the growth is going to come from," Mr Taman says.
The fact that Infor's president Duncan Angove was formerly the general manager of global retail business at Oracle adds a certain piquancy to the fight for what experts say is a glittering prize.
Cloud traffic growth
In its latest Global Cloud Index Cisco Systems, a US-based multinational technology outfit, forecasts that Middle East and Africa (MEA) cloud traffic will more than quadruple by the end of 2019, with 83 per cent of all MEA data centre traffic coming from the cloud. It says MEA is expected to have the highest cloud traffic growth rate globally, at 41 per cent, by 2019.
"Middle East enterprise and government organisations are moving from test cloud environments to trusting clouds with their mission-critical workloads . " says Mike Weston, the vice president of Cisco Middle East.
"This creates a tremendous opportunity for cloud operators, which will play an increasingly relevant role in the communications industry ecosystem."
Deloitte, meanwhile, says the market for cloud services in the Middle East will exceed US$1 billion this year alone.
Optimistic
Infor already counts major UAE players on its books that use its software. "Brands such as Emaar use us for enterprise asset management, Nakheel does the same thing," says Mr Taman.
"[In the UAE], I think we have about 600 [clients] altogether - we have about 50 per cent market share in warehouse management, software that runs distribution centres, 300 hotels that run our software for back office. We have customers like [the UAE-based] Future Pipe, which is an oil and gas [focused] manufacturer. We have lots in Saudi as well, Kuwait, all around the region."
Regarding the competition, Mr Taman is optimistic: "Now, the pipeline is growing dramatically, the interest of not only having Oracle as an option is amazing."
For its part, Oracle, is equally upbeat. "Our investments in the region have only grown and the impact of these investments can be seen in our size, revenue, customer base, products and partners," says the Dubai-based Arun Khehar, the senior vice president for applications business for East Central Europe-Middle East and Africa at Oracle.
Confidentiality
Of course, there are other players in the sector just as eager to compete. SAP, for instance, in February signed a strategic partnership with du. "SAP is further driving our co-innovation partnership with du to support the UAE's digital agenda," says Steve Tzikakis, the senior vice president for SAP South Europe, Middle East, and Africa.
Microsoft, meanwhile, launched its next-generation cloud solution in March in Dubai. "As governments across the GCC embark on more and more ambitious e-government and m-government programmes, it will fall upon businesses to keep up with citizens' expectations," says Karim Talhouk, the company's business solutions director for the Gulf.
Mr Taman admits trying to move non-corporate clients to the cloud will require building trust regarding confidentiality.
"We do run some of the biggest hospitals like American Hospital in Dubai, Cleveland Clinic Abu Dhabi - these are great brands to have. They're a little worried about putting patient-related data outside of the borders of the country so they're waiting to get a green light from government authority."
Flexibility
However, the commercial sector is where Infor is concentrating its efforts initially.
"Most of where we're going after right now is manufacturing, retail and distribution and that's where they're already operating across borders and where there's not any private data in there, it's inventory, some transaction," Mr Taman says.
"We're going after those areas both in Saudi and the UAE and by December I'm expecting to have the first couple of dozen. Then the main stream will come along and that's in, worst case, I think a couple of years, hopefully 12 to 18 months."
Mr Taman believes one of the things the cloud offers is previously unimaginable flexibility.
"For example we bought a company called Predictives - it specialises in retail predictive optimisation: what should I be buying; what quantities, colours and sizes; what warehouses should I be putting them in; what days and weeks of the year, [and where in the world] should I be putting them?
Appeal
"How it does it, [is that] it goes out every time it needs to make a calculation, and while it may normally use say 10 cpus [central processing units] just to run, it'll grab 10,000 cpus for 20 minutes and then elastically go back to what it was."
That is key to the financial appeal of such technology, he says.
"So now you're paying by the minute for access to this unlimited infrastructure, using machine-level big data capability and then shrinking back to the infrastructure you need [normally].
"That's what customers can never do on their own, they can't have enough hardware that you grab 10,000 cpus for 20 minutes and then come back down to 10. So the cloud revolution is going to drive a lot of things."
However, he acknowledges that cloud take up is still viewed with some caution in this region.
"Our biggest challenge is [potential customers'] fear of the cloud. But it's funny when you're talking to commercial industries they kind of have been doing it anyway, they operate not only in the Middle East but they have connections in [say] South America, Asia, so they have been using systems across borders" and so may be more open to embracing cloud."
Mr Taman says the onus is on regional authorities to complement the efforts companies have made in technological securitisation.
"The Middle East may be a little bit slower but the governments will have to weigh in a little bit . we spend hundreds of millions of dollars on security.
"I'm not saying it's impossible ever to be hacked for us but we can't imagine it."
Perceptions
He sees state authorities as key to cloud gaining wider acceptance in the region.
"We do a lot of public sector around the world, from actually running water systems, utility systems, back office systems, portals, EMT, ambulance services but we don't have any of those customers in the UAE or Saudi because our channel partners never wanted to sell [to them].
"I don't know why really, we ended up recruiting companies that sold into niches and we never ended up recruiting selling partners that sold to the government,"
That, he says, is about to change. "I'm [working on] signing up a partner who's the largest IT provider of systems to the government of Kuwait and she runs an organisation called e-Portal. So if we get her to sign up, then now we have an entry into Kuwait.
"We're doing the same right now with the equivalents of her company in Qatar, in Saudi, in Oman and the UAE. A lot of it comes down to getting the right ecosystem and those who have the trust of the government and us, then the assets are there."
While Mr Taman, who describes himself as Arab American, acknowledges changing Gulf perceptions of new business technology also requires a change of local attitudes, he believes Infor has the tools to help to boost the process.
"One of the companies that we bought was TalentScience, [which is built on] the science of how to hire, promote and teach people and put them in the right place," he says.
"Being able to put a person into the right job, in the right field of study, is the difference between them being successful and not being successful.
"So these kinds of innovations are really needed; how do we take our youth, drive them into productivity, start to change our culture - take away the entitlement mentality - and make sure that they're doing that just by aligning their interests and their capabilities to what we do for them?"
Highest of the high
Mr Taman says the recent decision by Saudi Arabia to revamp its economic model means further major opportunities are potentially on offer.
"With Saudi going into the 2030 Vision, and privatisation push, we're trying to be at the top table on those conversations, I think we have some innovations and are making some inroads.
"It will take some time to elevate our brand enough so that we're consistently there. We're just trying to be able to prove that some innovation can help them . depending on where they're investing - are they going to go heavy into textiles for example, then we'll go in there. Are they going to go into minerals, that's an area for us, we do mineral mining [tech solutions] extremely well as a company.
"Saudi hasn't even started tapping its gold - they say there's more wealth in minerals under the ground in Saudi than there is in oil," Mr Taman adds.
"We're planning on taking our capabilities and pitching it to the highest of the high.
"Now we just got to get that market share."
Let battle commence.
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