Over the past few years IT has for many companies been about putting the hardware in place. It meant a lot of dollars spent on systems, but this year, it has been about driving efficiency and getting more from the systems in place. Now companies are looking at how software tools can maximise profits and how technologies such as virtualisation can help streamline operations.
‘The downturn has proved that having the right strategy to enable customers to focus on core business and push other tasks outside is the right thing to do. And you will see that more and more moving forwards,’ said Driss Elougmani, Enterprise and Services Director at Dell Middle East.
But while the managed services sector is a growing market – analyst IDC claims that in 2008 the IT services market was worth $1bn in the UAE alone, a 29% year on year growth rate – it has been a tough road for those companies offering such services.
There is still a degree of suspicion, albeit diminishing, about employing an outside company to manage part of a company’s business data. It has meant that when companies look to push virtualisation or talk about cloud computing, it is typically followed by a caveat.
For instance, Dell used Gitex to announce the launch of a Software as a Service offering. But the company said it is targeting slices of the market, launching modular services, rather than full applications, and that was a theme that came through time and again.
‘We’re picking off operational areas and inviting customers to take small steps in terms of offloading their operations to Dell,’ said Alastair McFadzean, Business Manager at Dell EMEA. ‘This is an area where customers can save money and they are not taking a big bang approach. They’re taking small steps towards these new services.’
Dell’s service offerings in the Middle East includes device data management, email archiving, compliance management, incidence management.
Services on demand
Oracle also believes the on-demand route is most likely to be a success in the region. Subscription based CRM, for instance, has been one of Oracle’s highest growth areas in the region, again though, from a low base, and the company continues to add more on-demand services – such as procurement.
Oracle Senior Vice President Husam Dajani, said there is a definite trend towards on-demand software, as customers move from on-premise applications. ‘CRM on demand is a big area for us. The up-take in the region is picking up very nicely with the speed of network that’s becoming available and the ability of customers to use some of the new technologies from Oracle to do integration with the on-premise applications.
‘This was a concern in the past, but now is less of a concern. The maturity of on-demand applications is increasing and we are adding more on-demand applications.’
Forrester felt that in the Middle East, although there is a thirst for improved systems, internal cloud computing services would attract a lot of attention, because of the nature of the region. Bobby Cameron, a Vice President at Forrester, said: ‘We expect internal cloud to be as popular as external cloud computing [in the Middle East]. SaaS isn’t here yet, but the trend is picking up. Vendors are saying that they are seeing a SaaS up-take from local business units of internationals.’
Virtualisation a growing market
While there is still some doubt about SaaS take-up in the Middle East, virtualisation was seen as a big growth area. Still a small sector in the region, it was the number one sector of interest among IT vendors, who across the board were outlining their plans and technologies.
Gartner estimates that by 2013 around 60% of all server workloads worldwide will have been virtualised and that the server and desktop market will be worth some $2.7bn.
‘Adoption rates of virtualisation are low. It has not gone mainstream yet, but is definitely ramping up,’ said John Hoonhout, Managing Director of HP in the Middle East. The argument for virtualisation is easier to make when server space is so under used. Hoonhout estimated that only 15-20% of server capacity is being used. ‘It should be 70%,’ he said.
Although server virtualisation grabs much of the attention, there is growing belief that desktop virtualisation will also become a big market. Citrix believes that companies will increasingly move towards a virtualised desktop environment, giving control back to the IT department. ‘Many companies feel the pain of having to manage so many PCs sitting on desks,’ said Antoine Aguado, Regional director Middle East.
With budgets still tight due to the economic downturn, companies are looking for fast return on investment. IT heads are being asked to do more with less, and managed services and virtualisation are technologies whose time has come – they give businesses the opportunity to be more efficient with their investments and the technology they run, but also be more streamlined, paying only for what they need.
The big question mark is, is its potential customer base ready. There is a suspicion about allowing a third party to manage such applications – and therefore the critical business data running over them, although that objection is gradually easing.
While full software as a service may be years away from taking hold – analysts at IDC in the Middle East for instance say they have seen no evidence of it being adopted by companies over here – the idea of edging towards it in small steps is now gaining a foothold in the Middle East.