State of Cloud Computing Security in the UAE IT Spending Habits and Future Outlook of Cloud Customers in the UAE

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1 State of Cloud Computing Security in the UAE IT Spending Habits and Future Outlook of Cloud Customers in the UAE September 2013

2 Contents Section Slide Numbers Executive Summary 8 Research Aim and Objectives 13 Research Scope and Definition 15 Market Overview 17 Regulatory Framework 25 External Challenges: Drivers and Restraints 28 Cloud Security Market 38 Cloud Security End Users 46 Cloud Security Vendor Landscape 49 Respondent Profiles 52 Perception of Cloud Computing 56 Budgeting 64 3

3 Contents (continued) Section Slide Numbers Cloud Adoption Trends 72 Security 76 Threats in the Cloud Environment 82 Cloud Vendor Selection 89 Cloud Vendor Brand Awareness 92 Conclusions 97 Competitor Profiles of Selected Industry Participants 101 The Last Word 110 Appendix 113 4

4 List of Exhibits Section Slide Numbers Cloud Security Market: Market Engineering Measurements, UAE, Cloud Security Market: Key Market Drivers and Restraints, UAE, Cloud Security Market: Market Engineering Measurements, UAE, Cloud Security as a Percent of Network Security Market: UAE, 2012 and Cloud Security Market: Revenue Forecast: UAE, Cloud Security Market: Competitive Structure, UAE, Cloud Security Market: Percent Revenue by End User, UAE, Cloud Security Market: Vendor Landscape, UAE, Respondents by Number of Employees: UAE, Respondents by Vertical: UAE, Highest Impact on Decisions Related to Cloud Computing: UAE, Perception of Cloud Computing: UAE, Cloud Computing Adoption by Type of Cloud: UAE, Longevity of Cloud Usage: UAE, Usage by Cloud Delivery Model: UAE,

5 List of Exhibits (continued) Section Slide Numbers Workloads that were Already Moved to Cloud: UAE, Change in IT Budget Over Last Year Due to Spending on Cloud: UAE, Percent of IT Budget Spent on Cloud Computing: UAE, Estimated Change in Budget Allocated for Cloud Computing Next Year: UAE, Cloud Computing Effect on IT Budget Over the Next 12 Months: UAE, Cloud Computing Effect on IT Budget for Security Over the Last 12 Months: UAE, Cloud Computing Effect on IT Budget for Security Over the Next 12 Months: UAE, Expectation of First Return on Investment from Cloud Computing: UAE, Workloads Likely to Move to Cloud in the Next 12 Months: UAE, Workloads Unlikely to Move to Cloud in the Next 3 Years: UAE, Workloads Not Moved to Cloud Due to Security Risk Exposure in the Cloud: UAE, Most Secure Type of Cloud: UAE, Responsibility of Cloud Security in Cloud Environment: UAE, Management of Cloud Security Risk: UAE,

6 List of Exhibits (continued) Section Slide Numbers Main Concerns Prior to Subscribing to Cloud Computing Environment: UAE, The Key Threats of Using Cloud Computing: UAE, Factors Affecting Selection of Cloud Service Provider: UAE, Top-of-the-Mind Public Cloud Vendors: UAE, Top-of-the-Mind Private Cloud Vendors: UAE,

7 Key Takeaways The cloud security market is expected to experience sluggish growth during the early stage of cloud computing which is within the next two years. However, in the next few years, once cloud computing gains traction in the United Arab Emirates (UAE), the cloud security market is expected to experience higher uptake than the cloud market and grow from $ million in 2012 at a compound annual growth rate (CAGR) of percent from 2012 to The Telecommunications Regulation Authority (TRA) is yet to issue regulations and official standards on cloud computing. The public cloud model to host the data abroad does not appeal to sensitive industries. There are two main regulatory implications one is data movement outside the UAE border restrictions and the other, the unfavorable Uniting (and) Strengthening America (by) Providing Appropriate Tools Required (to) Intercept (and) Obstruct Terrorism Act (USA PATRIOT) act, which allows US intelligence to check the data stored on company servers registered in the US. The general perception in the UAE is that private clouds are more secure than public or hybrid clouds, but local businesses that subscribe to public clouds strongly believe that public clouds are more secure. , Web, and security solutions were commonly the most popular workloads deployed in the cloud environment, while sensitive workloads such as enterprise resource planning (ERP) and human resource management (HRM) were kept out of the cloud. However, customer relationship management (CRM) solutions were widely deployed among the survey respondents that had already adopted the cloud. Companies that decided to adopt the cloud model have experienced an increase in their IT budget. Therefore, companies that wish to move to the cloud should expect an increase in cost. However, nearly a quarter of the companies believe that return on investment (ROI) will be achieved in the first months, while percent believe it will be achieved in 1 months. Source: Frost & Sullivan 9

8 Key Takeaways (continued) However, around percent of the businesses in Abu Dhabi and Dubai have already adopted some form of cloud. Almost a quarter of those claim that they have been using cloud services for more than two years; software as a service (SaaS) is the most prevalent model in the UAE. Respondents claimed that, in 2013, nearly percent of the companies would have budgets allocated for cloud computing, which would increase their IT budgets from percent to percent. However, percent of the respondents claimed that their spend on IT security would remain the same. , storage, and and Web security are the workloads likely to have the highest deployment in the cloud environment, even though storage is perceived as the most vulnerable. Sensitive workloads such as EPR, office productivity suites, and HRM were identified as the least likely to be shifted to the cloud environment. Companies that had already adopted cloud model were more positive about cloud solutions. Hence, the cloud market in the UAE has reached some level of maturity; in the next two years, cloud vendors are expected to witness an increase in orders to deploy more sensitive workloads into the cloud environment. Nearly percent of the respondents claimed that cloud security would be internal IT staff responsibility, while nearly a third stated that they would choose a third-party cloud vendor for protection; only percent would entrust this duty to their current IT security software providers. Source: Frost & Sullivan 10

9 Executive Summary Market Engineering Measurements Market Overview Cloud Security Market: UAE, 2012 Market Stage Market Revenue Market Size at the End of Forecast Period Market Size at the End of Forecast Period Nascent $ M $ M % (2012) (2019) (2019) Compound Annual Growth Rate Customer Price Sensitivity Degree of Technical Change Number of Competitors % > (CAGR: ) (scale: 1 [Low] to 10 [High]) (scale: 1 [Low] to 10 [High]) (active market competitors in base year) Decreasing Stable Increasing For a tabular version click here. Note: All figures are rounded. The base year is Source: Frost & Sullivan 11

10 Executive Summary CEO s Perspective 1 The UAE cloud security market is in its infancy, with a growth rate of percent in The market is expected to earn a revenue of $ million in The uptake of cloud computing in the UAE is expected to be the main driver for growth in the cloud security market. The cloud security market is expected to prosper once large enterprises start tapping into the cloud market. A number of cloud security contracts are expected to be signed as a continuity to previous partnerships between cloud vendors, local businesses, and cloud security vendors. Source: Frost & Sullivan 12

11 Aim and Objectives Objective 1 To analyze UAE market readiness for cloud computing uptake and identify the challenges in the country Objective 2 To assess end-user perception of cloud computing and identify the main concerns associated with cloud in the UAE The aim of this research is to provide a an overview of the state of the cloud security market in the UAE. Objective 3 To assess the cloud security market in the UAE and identify the threats hindering the uptake of cloud Objective 4 To identify the key drivers and restraints in the cloud security market in the UAE Objective 5 To understand IT budgeting associated with cloud expenses and predict their change for the forecast period Source: Frost & Sullivan 14