The falling oil price is pushing government organisations to move towards cloud and managed services, and leave behind their long-held preference for self-owned and managed infrastructure, according to Adrian Pickering, VP for Middle East and Africa at Juniper.
“I’m observing right now a trend for many large enterprises, and public sector organisations, government ministries like education, healthcare, interior, even in defence across the region – due to the pressures of oil price on budget, and also some of the regional conflicts being experienced, their budgets are really under pressure, very much under pressure,” said Pickering.
According to him, Juniper has seen a number of government ministries across the region make mid-project shifts, as a result of budget cuts: “A ministry of education and a defence ministry in the region, right now we’re working with them on a transition from developing a solution for them directly – to them saying ‘we need to look differently at how we execute against our plans – what are the options?’
“What I’m observing is a move away from building their own datacentre, bringing or hiring their own expertise, to a situation now where they are seriously going towards the public or private cloud providers, to provide the solutions they need for their business,” added Pickering.
In discussions with regional cloud providers, Pickering said they had also seen similar trends, which were simply not there until the last few months: “It’s been very interesting – I’ve had a couple of meetings over the last couple of days with the cloud operators, who candidly say this. Even last year, the theme at Gitex was cloud – it was a bit of marketing, a buzzword that’s been kicking around for a few years.
“I think there’s a transition point now in the Middle East specifically, where it’s actually going to start becoming a reality, for the big guys – the ministries, the banks – pushing it out because of the constraints we’re seeing from the oil price,” he added.
Pickering believes the shift presents a “very interesting opportunity” for telecoms operators in the region, but until now the opportunity has not been translated into real growth.
“A lot of the biggest operators in the region have been discussing and announcing cloud-type services, though I don’t think they’ve had real traction to date. And then there’s the independent operators, the standalone organisations across the region – we had the CEO of one of them here this morning, and they’re experiencing exactly what we’re seeing,” he said.
“I think there’s been a degree of resistance in this part of the world to entrust a third-party with operation of the network – particularly if the network is mission-critical to the success of the organisation. I think that’s changed to an extent – but what’s happening right now, the level of exploration of alternative solutions to building your own in this MENA region, I haven’t seen it at all in my time over here,” added Pickering.
