70% of Dubai Start-Ups Employ Cloud Computing Resources, Plan to Increase Spending

William Chappell Maged Wassim and a female sit behind a white table and pink flowers.
  • According to latest report developed by DSOA in collaboration with IBM and Thomson Reuters
  • Among those that are not yet using cloud computing, 38 percent plan to make the move soon

Dubai, UAE: December 18, 2017 – Dubai Silicon Oasis Authority (DSOA), the regulatory body for Dubai Silicon Oasis (DSO), the integrated free zone technology park, today announced the findings of The Cloud Report 2017, produced in collaboration with IBM and Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals.

Launched at a joint press conference held at Dubai Technology Entrepreneur Campus (Dtec), a wholly owned technology incubation center by DSOA and the largest of its kind in the Middle East, the report provides an in-depth view of cloud computing adoption in the Dubai start-up sector. Through a survey of more than 100 start-ups, and several case studies, it offers valuable insights on Dubai-based start-ups’ spending power, priorities, challenges, and requirements.

The Cloud Report 2017 found that 70 percent of start-ups in Dubai are currently on the cloud, 24 percent of whom built their start-ups on the cloud. On the other hand, 38 percent of those not yet on the cloud plan to adopt such technologies in the near future. With the availability of three different cloud service types, each with its respective benefits, majority of start-ups on the cloud (76%) adopt Software as a Service (SaaS). Meanwhile, Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) are each used by 32 percent of adopters. One third of start-ups on the cloud use more than one type of cloud service, and 9 percent from them are using all three service models.

Start-ups on the cloud in Dubai use an average of 4.39 cloud services, with 36 percent using one or two services and 18 percent using more than five. Storage and web hosting are considered as core services, and are generally the first cloud services adopted. They are also currently the most widely used at 68 percent and 67 percent respectively.

Among the start-ups that have not yet adopted cloud solutions, 42 percent say the initial investment is prohibiting them from moving to the cloud. Although 72 percent of all start-ups spend less than US$50,000 on IT annually, almost a quarter (24%) dedicate more than 20 percent of that annual budget to cloud services. Additionally, 80 percent of start-ups on the cloud are planning to increase spend on cloud services in the next two years. Other concerns delaying certain start-ups from moving to the cloud include, data protection (27%) and security (15%).

Commenting on the report, William Chappell Chief Financial Officer at DSOA, said: “As we transition into a more technology-focused world, all sectors of the UAE’s economic landscape are working relentlessly to forge a digital transformation. The Cloud Report 2017 provides insights for start-ups on the best practices around cloud adoption, while also serving as a valuable source for vendors. It outlines the services and models being used by peers, as well as the factors that influence decision-making around cloud implementation in Dubai. In line with the National Agenda of the UAE Vision 2021, launched by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, DSOA aims to actively contribute to the national key performance indicators under the Competitive Knowledge Economy pillar.”

For his part, Maged Wassim, Vice President – IBM Cloud, IBM Middle East and Africa, said: “As part of any shift or transformation, the human factor is the one constant. For this reason, IBM puts code, skills training, and resources into the hands of developers to build, create, iterate, and solve problems faster.”

Tina Ghanem, Head of Accelerate SME at Thomson Reuters in the Middle East and North Africa, said, ““Dubai start-ups are increasingly adopting cloud-first strategies to capitalize on the flexibility, speed-to-market and scalability that cloud solutions offer – right from the very beginning. However, for entrepreneurs with less IT expertise, cloud adoption can be an overwhelming thought and there is still a misconception that it involves big price tags, and huge commitments of time and resources. Various initiatives – such as the IBM Global Entrepreneur Program, a cloud credit program, and the incubation support of ecosystem players like Dtec – will help to address some of the perceived obstacles to deeper and broader cloud technology usage among these start-ups.”

“Looking ahead, the pace of cloud adoption in this market is expected to grow rapidly in the coming years as Dubai start-ups look for more variety and a greater range of cloud services to choose from in the future,” she added.

Lastly, The Cloud Report 2017 lists these five cloud adoption tips for start-ups: first, to begin with a cloud-first strategy and consider adoption from the get-go; second, to find a provider that offers a secure and scalable storage solution, which also acts as a virtual workspace; third, to choose a cloud deployment model (public, private, community, hybrid) that reflects your privacy, security, and size requirements; fourth, to choose the most suitable hosting option (dedicated hosting or shared hosting); fifth and last, make data security and privacy a priority.

To download The Cloud Report 2017, please visit: The Cloud Report 2017.