Adding managed services to cloud a digital opportunity for KSA

13 March 2024 5 min. read

Extending cloud-based working with a managed services model can help Saudi companies accelerate and enhance the modernisation of their digital operations, write Rajat Chowdhary (partner) and Vikram Sharma (associate director) from PwC’s technology consulting business.

In this era of technological advancement, cloud computing has emerged as a game-changer, enabling businesses to innovate, scale, and stay competitive. This trend is expected to continue, given the region’s commitment to nationwide digital transformation and economic diversification.

In Saudi Arabia, the overall public cloud services market is according to IDC expected to reach $3.9 billion in 2027, up from $1.36 billion in 2022 at an expected compound annual growth rate of 23% over the 2022-2027 period.

Adding managed services to cloud a digital opportunity for KSA

Encouraged by the positive economic outlook and promising demand for technology, many global cloud services providers (CSPs), such as Oracle, Google and Microsoft, as well as data centre operators have established availability zones in the country, further expanding cloud adoption among Saudi organisations.

Further reading: New Google Cloud region in KSA could add $109 billion to economy.

While organisations are embarking on or planning a journey towards cloud adoption in Saudi Arabia, these raise new challenges. Numerous organisations that have transitioned to the cloud find themselves managing multiple environments characterised by diverse configurations.

Additionally, they might be actively in the midst of transitioning legacy applications to the cloud or creating new applications specifically designed for cloud environments. Each of these situations introduces considerable complexity into the realm of cloud operations.

Elevating IT with cloud managed services

The inception of CSPs was done on premise to provide stable and efficient solutions for the infrastructure layer. Amazon’s Jeff Bezos has described certain IT functions as “undifferentiated heavy lifting”. Undifferentiated heavy lifting in practice signifies the essential yet non-value-added IT functions vital for maintaining a functional IT environment within an organisation. While crucial for stability, these tasks don’t contribute to setting the organisation apart competitively.

Many CSPs don’t offer help with undifferentiated heavy-lifting tasks at the cloud operations layer, such as infrastructure monitoring, incident/problem/change management, backups and patching. The CSPs expect the customers to manage these services, which lead to valuable expert resources that could be deployed elsewhere with greater returns and value.

This is where Cloud Managed Service Providers (CMSPs) come in. A CMSP is a trusted third-party company that handles the management of a client’s IT infrastructure and systems remotely.

Rising cloud adoption: A catalyst for CMSP growth

The latest ‘Business Survey Middle East’ report from PwC and Strategy& showed that 68 per cent of Middle East organisations plan to migrate a majority of their operations to the cloud within the next two years. To fund these initiatives approximately four out of five companies intend to increase their cloud budget over the coming year. This change will lead to increased demand for CMSPs in the region.

How do cloud managed service providers bring value?

From an operations layer perspective, CMSPs present the same value proposition that attracts any organisation to the cloud. By offloading IT operations and concentrating on tasks that really set you apart from the competition and help you create genuine value, CMSPs can help you become more agile, react swiftly, and grow to meet the changing conditions and threats.

CMSPs may help organisations with end-to-end cloud solution design, development, and management so they can use the newest platforms, infrastructure, artificial intelligence (AI) and analytics tools whenever they need them. Organisations can also scale up or down systems as needed. Additionally, for protecting your most important data, CMSPs offer real-world experience with cloud security.

CMSPs help organisations design and execute cloud strategy, deployment and migration. They also keep the business objectives at the centre of the entire process. Regardless of whether an organisation has a multi-, public, private, or hybrid cloud, these services can include system administration, backup and disaster recovery, security services, performance monitoring and more.

Recent research indicates that a significant majority of companies successfully meeting their cloud objectives rely heavily on cloud managed services. Cloud managed services can be a strategic capability to help you modernise faster, access hard-to-hire talent and achieve your organisation’s cloud outcomes at the speed required by today’s businesses.

Organisations leveraging CMSPs only pay for what they need and when they need it. The organisations are not stuck with hardware, software and services they do not require. They also get the elasticity to scale up or down to meet threats or react to changing markets.

Way forward

The evolution of cloud managed services in Saudi Arabia signifies a strategic maturation. Businesses are no longer viewing cloud services in isolation. Instead, they are integrating technologies seamlessly into their overarching business plans.

Leveraging cloud managed services is a logical extension for organisations as they begin their cloud adoption journey. By having CMSPs taking care of IT operations management, organisations can effectively use resources to engage in activities that truly differentiate them and help them scale, increasing the already-transformative value of the cloud.