Market Research Analysis for the Cloud Service Providers

Cloud service providers in the region of middle east and Africa are very few in number and since GBM

has decided to enter the services business, we need to correspondingly understand how the market is

from several providers’ point of view. This kind of research will be very beneficial to comprehend about

the various Cloud service provider companies(CSP’s) in the region, Challenges and benefits the

organizations have faced during their transformation to services, Cloud demand and the target customers, and the technology these service providers are using and offering.

In order to extract such information, a survey was prepared and sent to different service provider

companies, but unfortunately the target audience is small and we could not obtain a lot of responses,

but we did manage to get answers from the top service providers which should serve well. The surve y

questioned various IT professionals across the region about their organization’s services. Most of the responses was from the UAE region.

1) Companies by Region

73.30%

13.30%

13.30%

UAE Qatar other

2) Respondents by Company Size

3) Role of the Respondents

78.60%

21.40%

500-1000 1000+

6.70%

6.70%

13.30%

13.30%

13.30%

33.30%

13.30%

CMO/SVP/VP/Director/Manager Marketing (Sales & MarketingManagement)IT Manager (Technical Management)

Business Development Management (Sales & Marketing Management)

Solutions/Technology Architect (Technical Management)

Sales/Account Management (Sales & Marketing Management)

Engineering (Technical Management)

4) Term that describes their Organization

5) Cloud Service model offering

86.70%

66.70%

20.00%

13.30%

13.30%

Cloud Service provider(CSP)

Cloud Builder

MSP with cloud computingexpertise

Cloud Service Aggregator

Cloud Service Brokerage

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

86.70%

73.30%

53.30%

13.30%

Infrastructure as aService(IaaS)

Platform as a Service(PaaS)

Software as a Service(SaaS)

Communication as a Service(CaaS)

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

6) Every cloud service provider in this region has their own datacenter and host all their services

through their own datacenters, although there are a few companies who also use colocation

centers or within the customer’s data centers which could benefit the customer in their own

ways.

7) Duration of the organization in Cloud services business

80.00%

40.00%

6.70%

Own Data-Centers

Co-location Centers

Within Customer's datacenters

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

Sales

28.60%

28.60%

21.40%

21.40%

1-2 Yrs 2-3 Yrs 3-4 Yrs 4-5 Yrs 5+ Yrs

Challenges and benefits.

Every organization had different type of challenges and different types of benefits by providing services,

and the level of every aspect faced is different for every organization. The below graph shows the level

of different type of concerns every organization has faced by the rating as “not important, medium

important, very important and show stopper”. (ex. 66.7% of the CSP’s concern about privacy was very important whereas for 8.3% it was medium important.

8) Concerns in the approach to cloud computing. (percentage displays the Cloud service providers)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Not Important Medium Important Very Important Show Stopper

9) Biggest Objection raised when proposing Cloud. (percentage displays the cloud service

providers)

10) Benefits provided by Cloud computing in the aspects of selling. 92.9% of the CSP’s believe flexibility and scalability is the biggest benefit

53.50%

33.30%

46.70%

60.00%

33.30%

6.70%

Lack of Security

Too expensive

Location of Data

Government Surveillance

Lack of control

Vendor lock-in

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00%

92.90%

35.70%

35.70%

78.60%

50.00%

57.10%

Flexibility and Scalability

Computing capacity andPerformance

Redundancy

Disaster recovery capacility

Reduced costs

High automation

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

Market When all the CSP’s were still in the planning stage, Private cloud and Hybrid cloud had the maximum

demand before adoption and also almost an equal percentage. For 47% of the CSP’s, private cloud had

the highest demand and for 40%, it was Hybrid cloud and only a 13% went for Public cloud. Openstack

and VMWare currently has the maximum demand amongst software tools. Majority of the CSP’s are already either using them or will start using it in around 6 months.

11) Max demand before adoption

12) Software tools planned in the approximately given timeframe. (78.6% of the CSP’s are going to start using Openstack in about 6 months.

47%

13%

40%

Private Cloud Public Cloud Hybrid Cloud

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

6 months 12 months 18 months 2+ years

13) The go to market strategy for most of the companies is both through channel partners and direct, although there are only 1-2 companies who are using only 1 type of strategy.

14) Size of the target companies

UAE especially has the highest demand for cloud because the percentage of the customers spread in

terms of region for every cloud service provider is high, since security is a big concern in cloud

computing, companies who opt to move to cloud are not choosing international cloud service providers

since they don’t want their company’s information to go outside the country. UAE’s market is bigger

than any of the other GCC companies and the existence of very less service providers makes UAE have

the highest demand for cloud.

15) Percentages of customers spread in terms of region.

UAE has the highest number of Cloud service providers(CSP’s) and since the UAE’s market is bigger. 50%

of the CSP’s in MEA has 80-100% of their customers in UAE, 21.40% of the service providers has 60-80%

customers in Qatar which makes Qatar the second highest Cloud adopting region. Majority of the

service providers has only 0-20% of their customers in Kuwait, Bahrain, Saudi, Oman and North Africa.

For customers spread in terms of industry, Government and SMB sector has the highest % of the

customers spread. 35.7% of the CSP’s has 40-60% of their customers spread in Government sector and

43% of CSP’s has 40-60% of their customers in SMB. There is also 7% of the CSP’s which has 80-100% of

their business in Government and SMB sector. Retail sector has the next maximum demand for cloud,

42.9% of the CSP’s has 20-40% of their business and 14.3% of the CSP’s has 40-60% of their business in

this sector. Almost all the CSP’s have equal number of customer spread in manufacturing and Education/research sector making Media publishing the last.

13%

40%20%

27%

0-99 100-499 500-1000 1000+

16) Percentages of customers spread in terms of industry.

7.10%

71%

93%

92.90%

85.70%

93%

78.60%

14.30%

7.10%

7.10%

7.10%

14.30%

7%

7%

7.10%

28.60%

21.40%

7%

50.00%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

UAE

Qatar

Kuwait

Bahrain

Saudi

Oman

North Africa

0-20 20-40 40-60 60-80 80-100

28.60%

43%

64% 64.30%

14.30%

86%

7.10%

42.90%

14% 14.30%

28.60%

7%

35.70%

14.30%21% 21%

43%

21.40%

7%

7.10%7.10% 7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Government Retail Manufacturing Education/Research SMB Media publishing

0-20 20-40 40-60 60-80 80-100

17) Global Companies faced as a potential competitor

18) Average Customer billing per month. (figures in dollars)

21.40%

36%

14%

50.00%

7.10%

50.00% 21.40%

7%

14.30%

14.30%

28.60%

42.90%

79%

36%

71%

7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Rackspace IBM Microsoft Google AWS

Negligible Small Medium Collosal

15%

57%

14%

7%

7%

<3000 3000-5000 5000-8000 8000-12000 12000+

For majority of the Cloud service providers, the average customer billing per month is $3000-5000 which

is 57% of the CSP’s. Although there are a few companies who’s billing is more than $12000 and 15% of

the CSP’s billing is less than $3000.

19) Costing models the companies offer.

Technology.

The Technology questions included the software tools being already used, the different types of services provided, Virtualization platforms, IaaS, PaaS services/providers the surveyed CSP’s are leveraging.

20) Software tools being used.

60%

60%

40%

40%

6.70%

Fixed cost per instance plus bandwidth charge

Additional/storage charge

Monthly flat rate

Elastic Pricing or pay-as-you-use model

other

0% 10% 20% 30% 40% 50% 60% 70%

50%43%

7%

Openstack V Cloud/VCAC OnApp

21) Services provided

40%

73.30%

53.30%

20%

53.30%

13%

40.00%

13.30%

67%

60.00%

46.70%

13%

6.70%

26.70%

33.30%

26.70%

60.00%

73.30%

46.70%

26.70%

6.70%

Anti-fraud

Backup/disaster recovery

Big Data

BI (Business Intelligence)

CRM (Dynamics CRM, Salesforce.com, etc.)

Collaboration (Hosted SharePoint, etc.)

DaaS (Desktop as a Service)

DevOps

Email (Hosted Exchange, etc.)

Email Security (Anti-spam, filtering, etc.)

Endpoint Security

ERP (Enterprise Resource Planning)

HR/talent management

Mobile Device Management (MDM)/Mobile ApplicationsManagement (MAM)

NOC (Network Operations Center) and/or Service Desk

PSA (professional services automation)

Storage

Security

Virtual desktop infrastructure (VDI)

VoIP/unified communications

None (we don't offer SaaS)

0% 10% 20% 30% 40% 50% 60% 70% 80%

Security and Backup/Disaster by default is the biggest concern when it comes to cloud computing, so

not surprisingly those services also have the highest offering percentage. 73.3% of the CSP’s offers

Security and Backup/Disaster recovery services. 67% of the providers offer Email services and 60% offer Email Security and Storage. CRM and Big Data services comes next following with the rest.

73.3% of the service providers offer Red Hat enterprise virtualization making it the highest offered

virtualization platform and VMWare and Microsoft Hyper-V is offered by 53.3% which is the second

highest platform offered.

All the companies which are in the services business do not offer IaaS and PaaS or both. But among the

companies who leverage these platforms, Microsoft Windows Azure is leveraged the maximum as IaaS

which is 53.3% of the service providers and 33% of Fujitsu and 27% of Amazon web Services are

leveraged. As mentioned earlier, Openstack has the highest demand as software tools and as PaaS,

Openstack is being leveraged by 53.3% of the CSP’s though most of the service providers do not offer PaaS.

22) Virtualization platforms companies leverage.

27%

40%

53%

7%

13.30%

73.30%

53.30%

6.70%

Citrix System Zen

KVM (Kernel-based virtual machine)

Microsoft Hyper-v

Docker

Parallels

Red Hat Enterprise Virtualization (RHEV)

VMware

None

0% 10% 20% 30% 40% 50% 60% 70% 80%

23) IaaS services/providers companies leverage

24) PaaS services/providers companies leverage

27%

7%

33%

27%

53.30%

6.70%

6.70%

13.30%

20%

Amazon Web Services (EC2)

CSC

Fujitsu

IBM (SoftLayer)

Microsoft Windows Azure

parallels

Rackspace

Google App

None

0% 10% 20% 30% 40% 50% 60%

13%

13%

7%

6.70%

6.70%

20.00%

53.30%

26.70%

33.30%

Amazon Web Services (EC2)

CA Technologies

Cloud Foundry

Grid Gain

IBM Blue mix

Microsoft Windows Azzure

OpenStack

Red Hat OpenShift Enterprise

None

0% 10% 20% 30% 40% 50% 60%