IBM enters Middle East's data centre race with two facilities in the UAE

The data centres in Dubai and Abu Dhabi will help regional organisations switch to a hybrid cloud model

Public cloud services market in the MENA region is projected to grow to Dh7.97bn this year. Getty

IBM unveiled two data centres in the UAE on Tuesday, its first foray into the Middle East and Africa cloud

storage market, as it looks to capitalise on growing demand for services from organisations in the region.

The local data centres, one each in Dubai and Abu Dhabi, will help companies "shift to a hybrid cloud model" and "move select critical workloads to a secure cloud environment", the US company said.

Hybrid cloud is a computing environment that uses a mix of private cloud and third-party public cloud.

“Through our data centres, we are helping organisations accelerate their move to hybrid cloud and interconnect different clouds … creating unified systems designed for increased consistency, automation and predictability,” said Hossam Seif El Din, vice president, enterprise and commercial at IBM MEA.

Regional demand for data centres is growing rapidly, with investment in data storage in Saudi Arabia and the UAE –the two biggest Arab economies – set to rise to more than Dh1.5 billion in 2022, according to International Data Corporation.

Regionally, more than 70 per cent of MEA companies will have multi-cloud environments in place in the next two years, said the US research company, which also predicts an increase in investment by public cloud service providers in MEA and Turkey. Spending will grow at a compound annual growth rate of 29.8 per cent – reaching $4.1bn (Dh15bn) by 2022, up from $1.1bn in 2017.

To meet the growing needs of clients, IBM is “investing heavily in hybrid cloud”, said Mr El Din, without disclosing the amount spent on setting up the UAE data centres.

“IBM is also investing in emerging technologies such as artificial intelligence, blockchain, data analytics and cybersecurity that optimise business workflows in the cloud,” he said.

The tech company signed a $700 million pact with Etihad Airways, one of its leading regional clients, in 2015, to provide cloud computing services until 2025.

For regional enterprises, moving to cloud hosted by a specialised company, works out cheaper than creating their own infrastructure of servers and security networks.

IBM, which has a global network of more than 60 data centres, announced the acquisition of another US software company Red Hat for $34bn in July last year, to strengthen its cloud offerings.

Following the Red Hat takeover, the company’s cloud revenue surged 11 per cent year-on-year to $5bn in the third quarter of 2019.

However, its overall revenue was down 3.9 per cent to $18.03bn in the three months ending September 30.

This was the fifth straight quarterly fall in revenue, as growth in the cloud business was overshadowed by dropping sales in other segments including services and hardware.

As well as assisting the shift to hybrid cloud, IBM's UAE data centres will deliver data backup and protection services for its customers.

When networks fail or in downtime scenarios when a computer or machine is out of action or unresponsive, data and workloads hosted in the data centres will be recovered instantly and available for use in real time.

The average hourly cost of downtime is $250,000 across all industries globally, according to an IDC report.

Customers will not only be able to migrate their workload and business applications to IBM's data centres but also ask the tech service provider to manage and modernise their systems and handle day-to-day operations, the company said.

“As a result, they [companies] will have the ability to free their IT resource to focus on other tasks and address fluctuating business demands,” it added.

Several global companies are rolling out data centres in the Middle East.

SAP is the front-runner in the race with three centres in the region in Dubai, Riyadh and Dammam, which all house local cloud computing servers for clients.

Amazon Web Services opened three data centres in Bahrain last year.

Comparatively a small player, Alibaba Cloud – the cloud computing unit of the Chinese e-commerce giant – opened its first regional data centre in Dubai in 2016.