Oracle opened its first second-generation cloud facility in the UAE as it looks to expand its data storage offering to public and private enterprises across the region.
Second in the Middle East after Saudi Arabia, the new cloud facility will help customers to accelerate their digital transformation while ensuring their sensitive data remains secure.
Located in Dubai, the new facility – known as cloud region - will have at least two data centres and also offers disaster recovery capabilities. It's the 26th US technology giant’s second-generation facility globally.
“This will help accelerate the digital transformation initiatives of organisations across the UAE’s government entities, large enterprise and SMEs,” said Abdul Rahman Al Thehaiban, senior vice president, technology, for Middle East Africa and Central Eastern Europe at Oracle.
The new facility will help the Emirates enhance its digital prowess and improve its digital readiness, he added.
The digital economy was equivalent to 4.3 per cent of the UAE’s gross domestic product in 2019, and the government has set a target to double that.
Last September, Larry Ellison, Oracle's founder, said he planned to set up 36 second-generation cloud regions globally by July 2021. Four of these will be in Middle East – two each in the UAE and Saudi Arabia, the Arab world’s largest economies.
The region’s first was launched in Jeddah in February this year. The company did not provide further details on the opening of other facilities in the region.
Oracle, whose local clients include DP World, Abu Dhabi Customs, Damac Properties, Landmark Group and Apparel Group, reported more than $27.4 billion in global revenue from its cloud services and license support in the financial year ended on May 31.
"Our adoption of the second-generation cloud is in line with the digital transformation strategy of Abu Dhabi … [and] our vision of creating government services based on innovation and advanced technologies such as AI and IoT," Fahd Ghareeb Al Shamsi, executive director of the administrative affairs sector at Abu Dhabi Customs, told The National.
These technologies will enable Abu Dhabi Customs to automate customs procedures to enhance security, facilitate trade and provide excellent services, he added.
Etisalat, the UAE’s biggest operator, is the telecom partner for Oracle's cloud region in Dubai.
“During this unprecedented period, global markets are looking at enhancing digital services availability and adding new capacities for businesses and the entire community,” said Salvador Anglada, Etisalat’s group chief business officer.
“The partnership with Oracle further complements the existing capabilities of Etisalat,” he added.
UAE businesses are prioritising cloud investment and digital transformation in the wake of the pandemic and to compete during the recovery phase.
About 57 per cent of the UAE’s chief information officers from mid and large organisations said they were accelerating the digital transformation of their businesses in response to new customer needs, according to an International Data Corporation survey conducted in the second quarter of the year.
“The investment by global cloud providers in in-country data centres will continue to alleviate concerns of data residency and security among organisations in sectors such as the public sector, banking and others,” said Jyoti Lalchandani, regional managing director for Middle East, Turkey and Africa at IDC.
On the back of these demand and supply-side drivers, IDC expects spending on public cloud — a computing service in which a service provider like Oracle, Microsoft, or Alibaba makes resources available to the public or companies through the internet — to surpass $430 million in the UAE this year and $1bn by 2024, growing at 25 per cent annually.
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December 8: UAE v USA (Sharjah Cricket Stadium)
December 9: USA v Scotland (Sharjah Cricket Stadium)
December 11: UAE v Scotland (Sharjah Cricket Stadium)
December 12: UAE v USA (ICC Academy Oval 1)
December 14: USA v Scotland (ICC Academy Oval 1)
December 15: UAE v Scotland (ICC Academy Oval 1)
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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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