Microsoft expects to add more than $18 billion to Qatar's economy over the next five years. Reuters
Microsoft expects to add more than $18 billion to Qatar's economy over the next five years. Reuters
Microsoft expects to add more than $18 billion to Qatar's economy over the next five years. Reuters
Microsoft expects to add more than $18 billion to Qatar's economy over the next five years. Reuters

Microsoft launches new data centre region in Qatar that will create 36,000 jobs


Ian Oxborrow
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Microsoft has opened its first cloud data centre region in Qatar as it adds tens of thousands of jobs to the country's economy.

The US technology company said it is the first hyperscale cloud provider to deliver enterprise-grade services in Qatar, and its data centres are open for business with Microsoft Azure and Microsoft 365 available.

"We are adding more than $18 billion to the economy over the next five years and we are also adding more than 36,000 new jobs over the next five years," said Microsoft Qatar general manager Lana Khalaf, AFP reported. She said at a launch ceremony that it will help Qatar to become a "digital hub for the region and the world".

The new data centre region will help Qatar's digital transformation as it seeks to diversify its economy away from a reliance on oil and gas, and comes as part of the Qatar National Vision 2030.

Earlier this year, Microsoft, in partnership with the Ministry of Communications and Information Technology (MCIT), launched the National Skilling Programme, with the goal to train more than 50,000 people in Qatar through providing digital skills acquisition programmes during the next four years.

So far, the programme has benefited more than 14,000 people, Microsoft said.

GCC states are attracting a large number of global cloud technology companies because of the increase in tech-focused young consumers and an evolving digital landscape in the region.

The global cloud computing market was valued at $368.97bn in 2021 and is projected to grow at a compound annual rate of almost 16 per cent from 2022 to 2030, with emerging technologies such as artificial intelligence and machine learning among its primary drivers, according to Grand View Research.

Earlier this week, Amazon Web Services, the cloud computing unit of the world's biggest e-commerce marketplace, launched its second Middle East cloud region in the UAE.

The move is projected to add about $11 billion over the next 15 years to the UAE’s gross domestic product, the company said.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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