93% of IT businesses in the UAE to forge ahead with expansions to new markets

93% of IT businesses in the UAE to forge ahead with expansions to new markets 

By: Abu Dhabi SME Hub
News

Growth underpinned by significant investment in digital; nearly half of businesses expanding into new markets virtually via the cloud.

Businesses worldwide are planning major investments in digital technologies to support ambitious expansion plans following lessons learned from the pandemic. New findings from an annual survey of technology decision-makers, by Equinix, Inc. suggest a movement toward a less connected world could not be further from the plans of digital leaders across industries and geographies. Despite concerns of a potential looming recession and talk at the World Economic Forum in Davos about the end of globalisation, businesses appear to remain bullish about their plans for further global expansion. 

Of the United Arab Emirates (UAE) IT decision-makers surveyed in the Equinix 2022 Global Tech Trends Survey, 93% of respondents indicated their organisation is planning to expand in the next 12 months, into either a new region entirely (66%), a new country (47%), or a new city (43%). 

Cloud’s potential has long been recognised but now its capabilities are becoming grounded in reality.  48% of those IT decision-makers across the UAE planning an expansion are most likely to deploy virtually in the short-term and then building permanent physical infrastructure in the new market, while 44% said they will support an expansion using existing teams. 

A number of potentially limiting factors were identified by businesses when it came to global growth, with supply chain challenges highlighted as a particular area of concern. 59% of the IT decision-makers surveyed globally said their business was plagued by global supply chain issues and shortages, while 58% specified the global microchip shortage as a threat to their business. 

These continued supply chain issues appear to be driving a need for more virtualisation, with growth aspirations underpinned by significant planned investment in digital infrastructure. Two-fifth (40%) of respondents from the UAE said they plan to facilitate global expansion plans by deploying virtually via the cloud, with (37%) doing so using a bare metal solution.

The pandemic also continues to have a significant impact on businesses’ digital strategies. More than half of UAE IT leaders (53%) say they are accelerating their company’s digital evolution because of the COVID-19 crisis. Indeed, over half (57%) confirm their IT budgets have increased as a direct outcome of its legacy—an insight into the now broadly acknowledged necessity for robust digital infrastructure to pivot to evolving business needs in an instant. Furthermore, the majority of respondents (55%) believe the technology changes and investments implemented during the pandemic are here to stay.

According to Kamel Al-Tawil, Managing Director, Equinix Middle East and North Africa: “It is evident that a post-pandemic economy is currently taking shape, with organisations overcoming the lingering COVID-19 challenges and accelerating their business recovery. Organisations are adopting a digital-first strategy and are looking to technology to be as dynamic a force to transform business processes. The Global Tech Trends Survey reveals that IT decision-makers in the UAE are regarding the speeding up of innovation, digitization of business, and moving IT infrastructure to the digital edge as the highest priority in their organization’s technology strategy. Digital leaders today are capitalizing on these enticing opportunities in the aim to enable and shape their business’s aspirations for growth”.

There remain, however, significant concerns around cybersecurity. Ensuring expansions are supported by resilient digital models is business-critical, particularly at a time of increasing volatility and emerging global threats. As part of their digital-first strategies, 85% of global respondents confirmed a key priority is improving cybersecurity. 84% said complying with local market data regulations is critical, while 83% highlighted the need to future-proof their businesses. According to IT specialists, the most feared threats were cyberattacks, security breaches and data leaks (all 70%).

In addition, the survey revealed that in the United Arab Emirates:

  • Technology at the forefront of the business: 86% of the IT decision-makers in the UAE, regard accelerating the pace of innovation, digitising their business, and moving IT infrastructure to the digital edge as the highest priority in their organisation’s technology strategy.
  • Cloud migration continues: 59% of  IT leaders said they plan to move more business functions to the cloud. Of those respondents, 64% plan to move there databases to the cloud, and equally so intend to move security functions to the cloud.
  • Private cloud dominates: Private cloud models were the preferred approach for 42% of respondents, and 31% of UAE digital leaders deploy hybrid clouds. A continued need for interconnection, with 39% of respondents believing it improves distributed security, and 39% reporting they use it to enable edge computing deployment.
  • Investing in innovation: Many IT leaders are looking to future-proof their businesses and take full advantage of evolving technologies, such as 5G, the internet of things (IoT), and Web3. 85% of respondents said they are moving to an everything as a service (XaaS) model, citing the simplification of IT infrastructure (61%), flexibility (53%) and improved user experience (48%) as the key reasons for doing so.
  • Focusing on sustainability: While innovating, digital leaders are keeping a close eye on the sustainability of their IT infrastructure. 85% say they are measuring and actively trying to limit the environmental impact of their IT equipment. Indeed, 82% report sustainability is now one of their organization’s most important drivers with commitments made to science-based targets.

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