Middle Eastern organisations increasingly prefer to obtain computer services via the internet, a process known as "cloud computing", rather than maintaining in-house IT services.
According to the international research company Ovum, companies across the region have confirmed that the adoption of cloud computing services has become a matter of when rather than if. The term cloud computing was inspired by the cloud symbol that is often used to represent the internet in diagrams. By using the internet to gain access to pay-as-you-go computing services, companies hope to cut costs while streamlining their IT needs.
"A year ago, company information officers were telling us that around 5 per cent of the IT budget was being spent in the cloud," says Kevin White, an Ovum research director based in Dubai. "Over the next couple of years they are expecting to be spending anywhere between 10 per cent and 50 per cent in the cloud."
The IT industry believes that cloud computing offers businesses the opportunity to grow without large capital expenditure on IT. Tomorrow, Apple will be the latest company to unveil a version of cloud-computing.
"In terms of pulling out of recession, the main thing about cloud computing is that it drastically reduces the need for capital expenditure," says David Bradshaw, an analyst at the research company IDC.
"In a recession it is often difficult for even successful companies to raise sufficient capital for their needs, even though they have the money for services. Cloud computing allows them to pay for services when they need them," he says.
There is a growing belief that cloud computing has the potential to help pull economies out of recession. According to the Centre for Economics and Business Research (CEBR), in France, Germany, Italy, Spain and the UK, cloud computing has the potential to generate cumulative economic benefits equivalent to a cash injection of about €763 billion (Dh4.1 trillion) between last year and 2015.
But for the Middle East to experience the perceived benefits of cloud computing, several hurdles must first be overcome. These include security and data confidentiality as well as local cost issues.
"Connectivity is key to cloud, and the cost of connectivity is comparatively high in the region," says Mr White. "In some cases it can be four or five times that seen in other regions." The reliability of local internet connections is another problem. Cloud computing services have been known to crash sometimes as a result of a poor internet connection.
"Significant outages will happen - especially across the Gulf where there has been a history of connection problems," says Mr White. He adds that new submarine cable will offer some relief but that there is no evidence service disruptions will stop. There are also fears concerning the security of data sent via the internet.
Chief information officers in the UAE "do have deep concerns over where their business data is stored in the public cloud, and data loaded into most commercial services will be usually stored outside of the country, the region and the continent", says Mr White.
For some companies, these fears are a real barrier to the adoption of cloud computing. One of the main uses of cloud computing in the future is expected to be customer relations management. Ovum believes many companies will be reluctant to see highly sensitive information concerning customers sent via the internet to be managed by third parties. However, ways are being developed to store data locally. But these technologies are still largely unproved.
There is also growing evidence that the cost savings potentially offered by cloud computing may not be as great as the IT industry initially predicts. This is particularly the case as far as general cloud services such as e-mail, which are open to the public, are concerned.
"The other standout point was that chief information officers do not believe that public cloud services are always as flexible to use as is made out and may not necessarily save them money," says Mr White.
Early-adopter chief information officers have also warned about the reality of a pay-as-you-use public cloud scheme where some service providers want to lock organisations into multi-year service contracts. This is stimulating interest in more private cloud services tailored to a small group of people or organisations.
But despite cloud computing's initial teething problems, the adoption of cloud-based services seems to be about to take off across the region.
"Chief information officers are starting to consider [the] cloud," says Mr White. "They are all asking the same three questions of cloud: How can it help me? Where can it add value? When can I best exploit it?"