Middle East telecom operators expand data centers

Infotech Lead Middle East: Telecom operators in the Middle East are in the process of expanding data centers.

For instance, the UAE’s du has tied up with California’s Equinix and the new data center in Dubai will see a total investment of $80 million.

Equinix has about 90 data facilities globally and 4,000 customers including IBM and HSBC.

du aims at providing seamless connectivity and managed services to tenants, which are likely to include financial institutions, telecom carriers from other regions and internet content providers.

Eric Schwartz, president for Europe, Middle East and Africa, Equinix said that the more applications and content that are located in the Middle East versus being served somewhere in Europe or Asia, the more individuals and businesses will see meaningful performance increases.

Market research firm Gartner says the Middle East & African IT infrastructure market, comprising of servers, storage and networking equipment, is forecast to reach $3.9 billion in 2013, a 4 percent increase from 2012.

IT infrastructure growth in Middle East will be driven by data center consolidation coupled with new data center build outs. Servers are the largest segment of the IT infrastructure market with revenue reaching $1.54 billion in 2013, and it will grow to $1.69 billion in 2016.

Ihab Al Saheli, general manager of IT solutions provider CNS, said: “Data centers are no longer an option, rather a must for organizations with multiple operating locations and/or organizations providing technology based services. This allows for centralized data and information management, standardization of technology and applications; thus unifying their customers interaction experience.”

According to Gartner, the data center market in the Middle East is fuelled by increased construction of Tier 3 and Tier 4 data centers, especially in Saudi Arbia and UAE, primarily driven by multinational corporations as well as regional collocation and hosting service providers.

The external controller based storage in the Middle East and Africa is expected to grow from US$ 648 million in 2012 to 760 million in 2016.The storage hardware market is still underpenetrated overall, with many organizations not having the insight or education required to assess the correct storage infrastructure for their application and service requirements. De-duplication, thin provisioning and flash storage are slowly gaining traction in this market.

Dilip Rahulan, executive chairman of Pacific Controls, which has built data centers for Etisalat in the UAE, said: “Telcos will build or buy capabilities or risk their future. Operators must ensure cloud computing is an integral part of their strategies — either as providers, users or both.”

Pacific Controls has partnered with Etisalat to offer cloud based managed services to the regional market hosted out of a facilities campus in technopark Dubai, gulfbusiness.com reported.

Analysts say the volatile global economic outlook will be an added impetus for cloud adoption as consumers and businesses continue to keep a close watch on expenditures.

With rising demand for cloud-based services, global cloud services revenues are expected to reach $148.8 billion in 2014, according to Pacific Controls.

GCC telecoms providers are keeping a close eye on developments in the market, including du’s latest alliance.

Abdulla Hashim, senior vice president ICT at Etisalat, said in response to the announcement: “This augurs well for the data center hosting industry in UAE as well as regionally and is indicative of market trends gravitating towards IT infrastructure outsourcing.”

Etisalat is currently offering nine data centers across the UAE. Data centers remain at the core of its growth objectives and to this end we raised the bar in 2012 by launching a Tier 3 certified data center in Dubai, thereby doubling capacity in three years to become the single largest provider in the region.

The Qtel data center is the largest in Qatar, and one of the more sophisticated and advanced in the region. It provides Qatar businesses in aviation, finance and real estate with a range of services, including enterprise hosting, cloud services and backup disaster recovery sites.

A Qtel spokesperson said: “Qtel welcomes new capacity in the region and competition on data centers, as it sharpens our focus and enhances the customer experience by providing customers with more choice and greater value.

In 2011, Qtel completed a major upgrade and expansion which offers 300 percent increased capacity.

Andrew Hanna, chief commercial officer at STC Bahrain ‘VIVA’, added: “We are considering all options including data center for our customers. However, as VIVA Bahrain is a local operator, our plans are not yet extending into the GCC.”

Tariff Consultancy says revenue for Middle Eastern data center providers is forecast to increase by eight percent per annum from last year to 2017, an increase from $296 million to $410 million.

As of the end of 2012 Tariff Consultancy forecasts that the average facility size in the region is just over 1,900 square metres per facility The average price per rack in the region (as of 2012) is $819 per month, which is around 38 percent below the average European Data Center rate.

Furthermore the cost of power which is subsidized in many countries in the region (mainly the Gulf States) ranges as low as 2 cents per kWh – which is approximately one fifth of the average EU-27 country power cost.

Ambika K
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