Telecom can reap big returns from investments in cloud

15 February 2024 Consultancy-me.com 2 min. read
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A number of significant obstacles have kept Middle East and North Africa telecom providers from more widely adopting cloud computing technologies. But now, with these tools becoming more accessible, companies should embark on the transition – in the process tapping into the several (financial) benefits the cloud can offer.

A study from strategy consulting firm Strategy& asserts that now is the time for telecom companies to move to the cloud. The benefits outweigh the obstacles to entry and the time to invest is now, state the authors.

The overall value of the cloud technologies market in the MENA region could nearly triple by 2027, to reach $9.8 billion. This growth is expected to surpass the global average. Telecom operators are projected to constitute a significant share, making up 8% to 10% of the total market value.

Telecom can reap big returns from investments in cloud

Companies that adopt cloud technologies will be able to take advantage of things like 5G, edge computing (which is a way to process data faster because it happens outside of the cloud on next-generation machines), the internet of things, and more complex things like ‘software-defined wide area network’ services.

According to the report, every $1 that companies invest annually in the cloud can be expected to create $5.4 in return. The lion’s share of that new value would come from reductions in capital and operating expenditures.

Cloud computing overall as an industry is expected to continue growing by about 20% through to 2027. In the past 15 years, it has grown to be worth nearly $500 billion.

Telecom can reap big returns from investments in cloud

Despite that growth in the sector, most telecom operators in the MENA region (57% of them) have so far only transitioned about a quarter of their IT workload to the cloud. That is one of the lowest adoptions at a global scale, and is lower than other regions. For example, a majority of telecom companies in Europe have moved over a quarter of their IT workload to the cloud.

“Telecom operators in the Middle East have faced barriers to the adoption of the cloud in the past,” write the authors of the report. “A holistic, multi-domain cloud transformation strategy can lead to increased core business revenue, unlock new revenue, and produce significant savings on the total cost of ownership. As pressures on growth and profitability continue, it is time for Middle East telecom operators to commit to the cloud.”