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Oracle to build cloud datacentre in Abu Dhabi

Move seen as acknowledgement that local presence is required for increased cloud growth

Oracle is to open a datacentre in UAE capital Abu Dhabi so that it can deliver locally hosted cloud services to its UAE customers.

The company’s co-CEO, Mark Hurd, said the rationale for building the new facility was so that Oracle could deliver high-performance cloud services to customers in the Middle East.

However, the move is seen by many as an acknowledgement that many regional organisations are uncomfortable about using cloud services that are hosted on other continents.

That issue has become something of a problem for Oracle, which is betting big on both the Middle East – it has more than doubled its regional workforce in the past three years – and cloud services as significant sources of growth.

For now, Middle Eastern organisations that use Oracle’s cloud services have to accept their data being hosted at the suppplier’s European datacentres. Unfortunately for Oracle, various laws across the Gulf Co-operation Council (GCC) area mandate that government organisations cannot host their data overseas. Laws prohibiting out-of-country data hosting also apply to financial organisations and government contractors.

The Abu Dhabi-based datacentre will solve that problem, and Oracle plans to hire 250 cloud sales professionals for the Middle East to make sure its regional customers know about it. It also plans to open new offices in Abu Dhabi, Dubai, Amman and Riyadh.

Oracle has made progress in bringing its cloud services to the Middle East. Just over year ago at a press roundtable session in Dubai, Hurd said growth for Oracle’s software-as-a-service (SaaS) products had grown by 80% in the EMEA region, and that SaaS growth in the Middle East had been “materially higher”. 

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But at the same session, Hurd admitted that such growth could only go so far if Oracle continued to force Middle Eastern customers to use European datacentres.

“Can we get to levels of hyper-growth?” he said. “To the degree that the more of this sort of growth we have described continues to happen, the more likely we are to invest in datacentres [in the Middle East].”

Hurd said at the time that a Middle Eastern datacentre was “under consideration”, and Oracle’s commitment came last week when he unveiled plans for the Abu Dhabi facility. The move appeared to be an acknowledgement that data governance issues were preventing growth in cloud services in the region.

Oracle said in a statement: “The state-of-the-art datacentre in Abu Dhabi will allow Oracle to better manage service-level objectives and data governance for customers throughout the Middle East.” It added that the new datacentre would be built using its own Engineered Systems.

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