Cloud Adoption and Opportunities in Pakistani Market

“Cloud”is a buzz word in the Pakistani IT sector. Currently facing adoption issues, I will try to discuss key factors hindering the spread of cloud computing in Pakistan.

In recent years, cloud computing attracted a lot of attention because of its wide base of applications and all the facilities it provides such as sharing resources, coherence and agility.

The main advantage of cloud computing is that it has cut down storage costs and provides greater reliability along with scalability and flexibility.

Rise and Evaluation of IT

The IT industry of Pakistan started its journey in the mid-80’s with monochrome monitors and dot matrix printers.

The commercial usage of this technology was gaining popularity among Government and Private sectors. Besides formulating policies for increasing investments, the Government and Private Sector took various other positive steps.

ISPs were issued licenses in 1995, and within half a decade, the Internet reached multi million households across the country.

As per Pakistan Telecom Authority’s latest stats, the Pakistan’ Internet backbone is of 130+ Gbps via Submarine Optical Cables and other mediums. We have 50 million Broadband users (Wired) and 47 Million 3G/4G Internet Users (Wireless/Mobile).

According to Pakistan Software Export Board, the country’s growth rate of IT & ITeS (IT & Enable Services) exports has been the highest in South Asia during the last three years.

Pakistan’s IT & ITeS export grew by 71% from June 2013 to June 2016. Annual revenue of the IT industry exceeds $2.5 Billion USD a year at present and is expected to exceed $5 Billion before 2020.

While the IT industry has undergone a revolution, cloud computing hasn’t established its roots in Pakistan yet. Unfortunately Pakistan is not among the upper echelons in Asia (Asian Cloud Computing Association Cloud Readiness Index 2016) where cloud services are being used optimally.

Further, the country’s deteriorating law and order situation and lack of foreign investment in cloud computing has adversely affected the growth and development of the cloud computing industry.

Cloud computing industry in Pakistan is under development, but it is anticipated that soon the IT industry will lead the country’s economy.

Despite a poor start and the shortsighted vision of this sector, positive steps taken by the government have shown impressive results: like PITB, HEC and NTC (state owned).

On the other hand, initiatives from private companies were not far behind like Rapidcompute ,PTCL, and CubeXS, Weatherly and others players who have already developed their local cloud infrastructure along with  fiber-optic connectivity across the country.

Key Factors Affecting Cloud Adoption

Upper Management Support: is involvement and interest of decision makers regarding technology implementation and adoption.

It provides the vision and paradigm for adoption of new technologies. To create a supporting environment and for proper utilization of resources and innovations, the upper management’s support is very critical.

Business Size: Firm type and organizational culture are major factors affecting the adoption of cloud computing. It refers to the size of the business in terms of production and market share.

The greater the business, the lesser its ability to accept change and flexibility. In various phases of adoption, understanding organizational size and end user behavior is important. Progressive and growing companies can easily transform their IT into Cloud.

Technological Readiness: defined as pro-activeness at the time of adoption and how well prepared the organization is in the context of experienced and technical expertise. The IT Management must be visionary in order to convince their management towards cloud transformations for reliability, scalability and a robust IT Infrastructure to create value in business and become a revenue center rather than a cost center. In a modern world, IT not only supports part of an organization but also plays a key role for transformations, business processes and key decision makings.

In environmental factors’ context, competitive pressure and trading partner pressure also influences organizations to adopt cloud computing. Competitive pressure forms due to competitors within the same industry verticals.

FSI and Banks Scenario

The State Bank of Pakistan has issued a “Framework on IT Governance and Risk Management in Financial Institutions” for commercial banks, Islamic Banks, Microfinance Banks and DFIs in which it has directed banks to utilize cloud computing.

However, their systems and service providers should be located in Pakistan along with all physical servers and services that should also be operable from within Pakistan.

Non-critical, non-financial customers or bank data can be hosted on public cloud that should adhere to all policies that include strict cyber security practices. Banks shall establish and maintain a robust and properly implemented cyber security awareness program to mitigate risks associated with IT operations.

Carrier Reliability is also a major concern in moving to cloud. Cloud computing needs “99.999” up-time for smooth IT Operations.

Cloud consumers have serious concerns over reliability and uptime of carrier services and encounter downtime at different levels. Smart service providers and consumers use dual or redundant connectivity to avoid downtime.

Lack of local presence of Independent / 3rd Party Cloud Auditor and Cloud Broker is also a concern towards moving to cloud. Apart from global cloud providers Amazon, Azure & others there is no local bench-marking among Cloud Providers in Pakistan which can be recognized and accepted.

Opportunities

Cloud computing is being adopted by various Pakistani organizations and institutions to meet their computing needs. Organizations have saved considerable expenses on developing infrastructure, in addition to administering and maintaining software solutions. In Pakistan, major IT enterprises come from four (4) sectors:

  1. Public (State Owned)
  2. Telecom & FSI Sector
  3. Commercial Industries (all verticals Oil & Gas, Power, Manufacturing & Others)
  4. SMB Sector also contribute significant business as well.

There is a lot of scope, opportunities and room for foreign investment in Cloud Services like FSI Cloud (locally hosted), which not only fulfills cloud services but also complies with regulator policies. There would be more opportunities available for Pakistani Market to invest in Cloud Services in other sectors as well.

About the Author

Fasieh Siddiqui is currently serving as an ICT Professional at EZYCorp.

Prior to joining IBM, he worked as a Senior Manager in PTCL. Before that he worked as the Team Leader for Business Development at Inbox Business Technologies (Pvt.) Ltd.