McKinsey & Company has released a new report, The Middle East public cloud: A multi-billion dollar prize waiting to be captured. The report details the significant potential of public cloud integration in the Middle Eastern region and the steps companies in the Middle East could consider to quickly capture the value at stake.
McKinsey conducted research and analysis on more than 700 public-cloud use cases across 600 companies and the public sector to understand the immense impact public cloud adoption could have on the region.
Report highlights include the following:
- The cloud can enable advanced services that few organizations can afford to develop themselves, such as machine learning, and help scale digital infrastructure and computational power in the region for greater resilience and potential new business models. This could create $130 billion value for the top 600 publicly listed and private companies by revenue by 2030.
- In the public sector—which currently represents about 20 percent of the region’s GDP—use cases could drive value worth up to $50 billion by 2030.
- In the Middle East as elsewhere, by far the largest source of cloud’s value-creation does not lie in its ability to optimize IT spent, but in its ability to accelerate product development and scale those products, accounting for about 70 percent of the total predicted value generated.
- Companies currently face financial and other obstacles. In a global survey of 450 CIOs and IT decision makers, 75 percent of respondents said the cost of migration to the cloud exceeded their budget, and 38 percent said the migration timeline ran too long.
- Generative AI can add 75 to 110 percentage points of incremental ROI to cloud programs through three key benefits: unlocking new business use cases, reducing the time and cost of application remediation and migration, and increasing the productivity of application development and infrastructure teams that work on cloud programs.
Our research and experience found ways companies in the Middle East can address those challenges and capture the potential value. They include prioritizing high-value use cases, moving to an agile product operating model so teams can take advantage of the cloud’s benefits, and building a scalable cloud platform that can securely support a company’s ambitions.
“Embracing public cloud as a substantial opportunity is essential for companies seeking to enhance their business value and overall operational efficiency,” said Christian Stüer, partner at McKinsey and author of the report. “It’s crucial to note that cloud technologies should be treated as a business focus rather than solely an IT aspect for unlocking genuine value. Failure to transition to public-cloud adoption leaves companies lagging behind, depriving them of advanced capabilities that are indispensable in today’s business landscape and can only be harnessed with the assistance of cloud technology.”
The report highlights three crucial steps Middle Eastern companies could take to capture as much value as quickly as possible from the cloud:
- Build a cloud migration strategy that focuses on value creation vs. cost reduction; treating technologies as a business priority rather than just an IT aspect to fully realize their potential.
- Develop and upskill local talent to be sustainable for the long-term
- Manage cloud costs differently – Promote a P&L mindset across the technology teams.
