Managed Services Market growth in Middle East set to rise

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According to a recent analysis by Frost & Sullivan, the Managed Services Market growth within the Gulf Cooperation Council states is set to expand from USD 1,073 million in 2012 to USD 3,112 million by 2018 yearend.

The GCC states, (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) have been proactive in their efforts to develop better information and communications technology (ICT). Infrastructure development programmes have focused on transforming these countries into knowledge-based societies.

The predicted increase in the market share is attributed to the higher pace of growth in the GCC states. In terms of verticals, the government and business, financial services and insurance (BFSI) verticals are the key markets for managed service providers (MSPs). However, the highest growth is expected from the IT and oil and gas verticals.

As observed by Frost & Sullivan’s Information & Communication Technologies Analyst;

“The GCC states are undertaking national development strategies and chalking out plans that are largely focused on diversifying carbon-based economies and developing knowledge-based societies. Government backed ICT infrastructure development is well underway as a number of e-initiatives are launched.”

The highest share of the regional revenue for MSPs is generated by government bodies. Frost & Sullivan expects the government vertical to remain the leading client of MSPs in the GCC mainly due to the digitisation associated with e-policies and the growth in data centres. It has also been noted that private enterprises are actively seeking to outsource business data services to third parties. Data security presents major obstacles for market growth.

“The outsourcing culture in GCC countries is very new and enterprises, especially from sensitive verticals such as the BFSI or the government, are still concerned about the security of their data. Therefore, they are reluctant to contract to third parties.”

In their attempts to counter this issue, MSPs need to educate clients that they can adopt on-premise models in order to have greater visibility and control over their IT infrastructure. A first step to reassuring clients would be to build trust, while pitching and delivering quality service on non-core operations such as router or network management.

“To successfully overcome security concerns, MSPs should extensively focus on integrating more robust security enforcement tools such as data encryption. Once MSPs start offering cloud services, they should consider providing the private cloud solution, rather than the public cloud option, since the former offers better security and latency. The private cloud will definitely have the higher uptake due to security concerns prevalent in the GCC countries.”

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