Microsoft's cloud portfolio to add $39bn and about 100,000 jobs to UAE economy, study says

Company is in talks with the government for more potential partnerships in highly regulated sectors

A guest uses the new Microsoft HoloLens 2 at the company's stand at Gitex Technology Week in Dubai on Tuesday. Leslie Pableo / The National

Microsoft, the world's biggest software company, expects its cloud services portfolio to add more than $39 billion and about 100,000 jobs to the UAE economy in the next four years, a study has shown.

About 17 per cent of that revenue will come from the US technology company's cloud data centre regions in Abu Dhabi and Dubai, according to the report conducted by the International Data Corporation, which was released on Tuesday.

Microsoft's cloud business caters to the growing number of cloud-born companies or organisations in the UAE that have most or all of their assets on the cloud, said Naim Yazbeck, Microsoft's general manager for the UAE.

The company is also “continuing” discussions with local authorities on potential partnerships to use its cloud services in highly regulated sectors, he told The National at Gitex Technology Week in Dubai.

Microsoft and its partners will spend about $3.4bn to support local businesses in UAE data centre regions, it said.

“The pandemic created an exponential need for digitisation; everyone required things to be digital, touchless, etc, and technology had been playing a big role. Of course, the cloud enabled all of those,” said Mr Yazbeck.

“The cloud has been a critical factor in allowing many sectors — from education to payments and financial services to retail — to continue to operate.”

The Microsoft study follows the opening of the company's first cloud data centre region in Qatar, which is expected to add more than $18bn to the Gulf state's economy and generate more than 36,000 jobs.

The adoption of cloud technology in the UAE and the GCC is growing because of the rise of technology focused young consumers and an evolving digital landscape in the region.

The global cloud computing market was valued at $368.97bn in 2021 and is projected to grow at a compound annual rate of about 16 per cent from 2022 to 2030, with emerging technology such as artificial intelligence and machine learning among its primary drivers, according to Grand View Research.

Meanwhile, global spending on public cloud services is expected to rise by more than 20 per cent annually to $495bn this year — about $84bn more than what was spent in 2020 — and hit $600bn in 2023, according to research firm Gartner.

Aside from Microsoft, other global technology companies such as Amazon and Oracle have also set up data centres in the UAE to support the country's technological push.

Microsoft, its partners and customers are expected to add more than 97,000 jobs to the UAE economy, either through direct employment or through the indirect generation of jobs in other organisations, the study said.

This will include an estimated 29,000 IT jobs, “highlighting the ongoing need for collaboration between public and private entities on skilling programmes to ensure that qualified professionals are on hand to assume these roles”, it said.

Microsoft's cloud customers and partners in the UAE include the Abu Dhabi Digital Authority, the Ministry of Education, First Abu Dhabi Bank, Mashreq Bank, DP World, Dubai International Airport and Majid Al Futtaim Retail.

More than two thirds of the jobs created by Microsoft's cloud business in the UAE will directly deal with the technology itself, while the rest will be at the end-user level, which highlights the need to boost the skills of users, Mr Yazbeck said.

“The challenge is the availability of skills. We are focusing, with the government, on skilling the workforce. You need more skills at a high pace,” he said.

“In specific highly regulated industries, we are looking if there is a way to partner with them so they can leverage the advantages of the cloud.”