Two UAE companies have unveiled plans to develop sovereign cloud services in the country, aimed at deploying critical services and securely hosting data in the Emirates.
Abu Dhabi's Space42 teamed up with Core42 and Microsoft to build a sovereign mobility cloud, which will serve as a hub for infrastructure hosting mobility data and autonomous systems.
The technology will also serve as a platform for high-definition mapping, telematics, fleet operations, traffic management and digital twins, Space42 said on the sidelines of the Dubai World Congress on Wednesday.
Sovereign cloud capability refers to a country's ability to maintain control of its data by ensuring cloud services are hosted within its borders and subject to domestic laws and regulations.
The sovereign mobility cloud is "a secure digital backbone" for the UAE’s future transport, Space42 told The National. "It powers tools like live traffic management, digital maps, fleet tracking, and realistic simulations of roads and vehicles," the company said.
It also gives transport authorities, industry and researchers a secure way to share data and test new ideas, and "make autonomous vehicles and smart mobility safer, faster, and easier to manage".
Space42 said its sovereign mobility cloud will enable it to deploy applications in co-operation with regulators, and drive adoption through pilot programmes and commercial schemes, with data shared securely across government, industry and research groups.
“The UAE has always led in technological innovation, and autonomous mobility is no exception," Fan Zhu, senior vice president of autonomous mobility at Space42, said.
"By building the nation’s first sovereign mobility cloud ... we are setting a global standard for secure, trusted platforms in mobility and autonomous systems," he added.
Separately, e& enterprise, the digital transformation arm of Abu Dhabi technology group e&, will be offering the next generation of OneCloud, a UAE sovereign hyperscale cloud platform powered by Oracle.
The service brings more than 200 Oracle cloud infrastructure services to organisations that must keep data in-country and meet strict regulatory requirements, e& enterprise said on Wednesday.
OneCloud aims to "enable leaders to scale artificial intelligence, modern applications and data-led services at home", said Khalid Murshed, chief executive of e& enterprise.
"This is about accelerating innovation, strengthening trust and giving every organisation – from public institutions to industry leaders – the confidence to grow on UAE soil.”
There is growing demand for sovereign cloud providers amid the shift towards national security and data privacy. The global sovereign cloud market is projected to hit nearly $650 billion by 2033, from an estimated $96.8 billion in 2024, growing at a compound annual rate of about 24 per cent, data from Grand View Research indicates.
Dubai telecoms operator du started offering its sovereign cloud and AI services in July, in partnership with Oracle, to private and public sector organisations in Dubai and the Northern Emirates.
“The technology landscape is changing dramatically due to the growing importance of data sovereignty and localisation, which has become a critical consideration for public and private sector cloud and AI deployments in the UAE and beyond,” said Richard Smith, an executive vice president at Oracle.
The UAE public sector is one of the most digitally advanced in the world. It is embracing the latest technologies such as cloud, AI and machine learning to improve citizen services, security and access to the latest digital offerings.
When asked how much Space42 was investing in sovereign mobility cloud services in the UAE, the company did not disclose the amount, but told The National that it is "a strategic initiative for the businesses involved and the UAE".
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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.”
