Mo. Jul 1st, 2024

The UAE Cloud Computing Market has made significant advancements and is projected to grow substantially in the coming years. With a current value of USD 8.02 billion in 2022, the market is anticipated to expand considerably and reach USD 22.1 billion by 2030, showcasing a CAGR of 13.5%.

Cloud computing in the UAE provides advantages such as cost savings, scalability, and accessibility. Moreover, businesses can avoid heavy infrastructure investments through cloud computing. The growth of the UAE Cloud Computing Market is driven by factors like digital transformation efforts, improvisation in cloud penetration, government backing for technology adoption, rising data demands, and the need for remote work solutions in response to global events. These satisfactory aspects stimulate the adoption of cloud computing services in the UAE, fostering technological advancement and business development across various sectors. The UAE Cloud Computing Market has witnessed a steep surge in demand for cloud penetration. This necessity arises from the digitalization push, government backing, and the requirement for adaptable solutions. Moreover, enhancing cloud penetration is crucial for advancing technology and fostering business expansion across various sectors in the UAE.

According to Fast Company Middle East, UAE has profound opportunities to improve its cloud penetration. If this is achieved, the country could experience significant growth, potentially generating an extra USD 181 billion in its economic value over the next ten years (from 2023 to 2033). This amount will account for around 2.5% of the UAE’s overall GDP during the tenure.

The Advent of Cybersecurity in the UAE Cloud Computing Market

The UAE Cloud Computing Market has witnessed the advent of robust cybersecurity measures. Cybersecurity has become a big concern with the increasing reliance on cloud services. The government and regulatory authorities have implemented strict cybersecurity regulations and standards to protect data stored and processed in the cloud. Moreover, the cloud service providers in the UAE are now prioritizing security features such as encryption, access controls, threat detection, and incident response mechanisms.

For example, the updated Dubai Cyber Security Strategy 2023 has introduced four main pillars. These include creating a cyber-secure society, fostering innovation within the city, building resilience in terms of cybersecurity, and promoting active collaboration in the cyber realm. The strategy’s objective is to ensure a secure online environment, reinforce Dubai’s digital foundations, and expedite both digital transformation and the development of smart city projects.

Introduction of Model-As-A-Service (MaaS) Platform

Implementing a Model-as-a-Service (MaaS) platform fostered the growth of the UAE Cloud Computing Market. This model allows users to access and utilize specific models or algorithms hosted in the cloud, without needing to manage the underlying infrastructure. It simplifies using advanced models for various applications, promoting efficiency and accessibility in data-driven decision-making and problem-solving.

For example, in November 2022, Alibaba Cloud, the digital technology and intelligence arm of Alibaba Group, unveiled ModelScope, an open-source Model-as-a-Service (MaaS) platform. ModelScope offers many AI models, including large pre-trained models, for global developers and researchers. Moreover, the platform was launched during the Apsara conference, Alibaba Cloud’s annual flagship event. In addition, the cloud provider introduced various serverless database products, enhanced its integrated data analytics and intelligent computing platform, and emphasized their commitment to helping customers drive business innovation through cloud technologies.

Adoption of Public Cloud Services

The UAE’s adoption of public cloud services has grown extensively over the past few years. Organizations in the UAE are leveraging these services to enhance flexibility, scalability, and cost-efficiency. Moreover, with the support of government initiatives, public cloud adoption is accelerating across various sectors across the country. This shift enables businesses to focus on innovation and growth, as they can access a range of resources and in-demand cloud computing tools without requiring extensive infrastructure investment.

In October 2022, Veritas Technologies LLC announced that UAE occupies the second spot in Public Cloud Adoption with a rate of 34%, and China dominates the segment with an adoption rate of 37%, respectively.

Government Regulations

The UAE government has implemented strict regulations to govern the Cloud Computing market in the country. These regulations aim to ensure data protection, cybersecurity, and privacy in cloud services. The government has introduced frameworks and guidelines to enhance the security and integrity of cloud infrastructure and data storage. These regulations also emphasize the importance of compliance with international standards and best practices.

For example, in July 2022, The Telecommunications and Digital Government Regulatory Authority (TDRA) disclosed its accreditation by VMware, a prominent cloud computing and virtualization technology company. As a result, TDRA became the first government entity in the region to offer sovereign cloud services through VMware. Sovereign Clouds are designed and constructed to meet the rigorous demands of data protection laws and regulatory sectors concerning data privacy, access, and control. By obtaining this accreditation, TDRA is positioned to provide secure and compliant cloud services that adhere to the region’s highest data security and privacy standards.

Impact of COVID-19

The COVID-19 pandemic had a profound impact on the UAE Cloud Computing Market. Before the outbreak, the UAE’s cloud computing sector was already experiencing steady growth, driven by government initiatives and digital transformation. However, the pandemic accelerated this growth as organizations swiftly transitioned to remote work and online operations. Pre-COVID, with increased investments, there was a focus on infrastructure-as-a-service (IaaS) and software-as-a-service (SaaS) solutions. However, in the post-COVID scenario, the market is witnessing a surge in demand for cloud-based collaboration tools, remote access solutions, and data analytics platforms. Organizations are developing scalable and flexible cloud infrastructure to support remote work arrangements. Moreover, the rise of cybersecurity concerns also led to hefty investments in cloud security solutions in the UAE.

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