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“Cloud adoption momentum in the GCC will gain further impetus in 2024”

December 18, 2023
in Business
“Cloud adoption momentum in the GCC will gain further impetus in 2024”
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As we approach the year 2024, Jyoti Lalchandani discusses with CIO Middle East 2024’s top tech trends and future CIO challenges.

This year, GenAI and Large Language Models, such as ChatGPT, are positioned as vectors of change. Developing generative AI implementation strategies will be imperative for technology leaders, prioritizing key areas such as business model building, internal operational improvements, risk mitigation, and overall organizational efficiency. As we approach the year 2024, Jyoti Lalchandani, Group Vice President and Regional Managing Director META at IDC discusses with CIO Middle East 2024’s top tech trends and future CIO challenges.

Q. How has the past year changed the landscape for technology leaders?

In 2023, leading organizations in the region shifted gears towards DX 2.0, and made rapid progress towards becoming “digital businesses”. This was underpinned by widespread digital-first adoption across functions and LoBs. Widespread automation,  adoption of innovative digital business models, industry digital ecosystem partnerships, and integration with the digital economy through organic and inorganic initiatives accelerated.  

GenAI created tremendous interest, and is giving a boost to enterprise AI strategies, and promises to enable many business outcomes. A lot of organizations started exploring a variety of GenAI-enabled business use cases, and especially large organizations (with more than 500+ employees) have been more enthusiastic about adopting this new technology, mainly due to the competitive pressure, availability of financial resources, and skills to support. 

Q. What do you forecast to be 2024’s top tech trends or emerging topics in the Middle East and what’s driving these trends?

GenAI: It is still early days, but significant interest in exploring use cases and piloting GenAI, across functions and processes. Use cases in areas such as customer service, financial reporting, content marketing, code development and others are being taken up by early adopters. The cost of developing and running GenAI-enabled business use cases will be among the key inhibitors of this technology in the short run. The training of the GenAI models is quite compute intensive and as a result, many initiatives will be postponed.

Sovereign Clouds: Digital sovereignty is a major consideration, given the uncertain geo-political environment, especially in the regulated sectors like govt, financial services, healthcare, oil & gas and others. This is driving the emergence of various sovereign cloud services and solutions, often through partnerships between global and local cloud providers. 

Sustainability emerged as a key C-suite priority, on the back of greater governmental focus. The demand for sustainable technologies and tech-enablement of ESG strategies has gained speed. This includes initiatives such as the decarbonization of data centres, the use of sustainable IT systems, the sustainability credentials of suppliers and cloud providers, and the adoption of apps and tools for sustainability reporting. 

Security and trust re-defined: New risks related to AI usage and AI-created threats, the growing OT digitalization and the vulnerabilities this creates, and risks related to cloud and application security, will keep security at the top of CIO priorities. 

Q. Everyone is talking about GenAI. Which industries are most impacted by generative A in the GCC? 

AI is emerging as a key part of digital business initiatives for GCC organizations. Many of them are still in the exploration phase and they are trying to understand how they can benefit from this technology and make the most out of it. According to IDC’s recent CIO Survey, AI will be the emerging technology area that will see the highest spending increase across the surveyed enterprises. GenAI is also a key discussion topic in the boardrooms of GCC organizations and there is a high level of enthusiasm to explore how organizations can benefit from this technology, especially across large enterprises in the financial services, government, retail, manufacturing, transportation and logistics, healthcare, and resource industries. 

Chatbot is the most common use case and several organizations in the GCC are already augmenting their existing conversational agents to deliver more personalized experiences to customers through LLMs. 

Also, Digital Assistants for Horizontal Functions: HR, field operations, and marketing are some of the internal functions that will heavily leverage ChatGPT-based digital assistants for content creation, content summarization, and better knowledge management. According to IDC’s CIO Survey conducted in December 2022, AI-enabled digital HR assistants will be among the top investment areas for organizations in the region over the next two years.

Q. What did tech companies and CIOs learn from COP28 in terms of sustainability?

COP28 and the resulting agreements and goals will lead to a greater focus on sustainability in regional organizations. Many leading organisations have established sustainability officers and teams, and the push for sustainability goals development, more extensive ESG reporting and compliance will accelerate. Focus on green data centres, sustainable supply chains and procurement, paperless business processes, usage of cloud services etc. will gain further momentum. Given the goals agreed upon at COP28, the oil and gas industry in particular will intensify its focus on improving operational sustainability.

Q. We saw big tech vendors opening new cloud regions across the Middle East. How can CIOs benefit from these new regions in 2024?

Cloud adoption momentum in the GCC will gain further impetus in 2024 with the extensive commercial availability of hyperscale in-country cloud regions. This will help to alleviate sovereignty concerns, especially in regulated sectors like govt, FSI and others. 

These investments will be backed by further investments by hyper scalers and their partners in training and ecosystem development. However current weak partner competencies and capacity to scale could be a constraint to deliver holistic benefits of the cloud for CIOs, impeding the pace of adoption.

Q. What do you think will be the main technology challenges for Middle Eastern CIOs in 2024?

There is a lack of data maturity (integrity, quality, lineage etc.) to be able to leverage advanced analytics and AI

Also, there’s a skills shortage: continuing skill shortage, especially in advanced / emerging tech like AI – both at the end user and the tech provider ends. 

On the other hand, managing growing cyber risks and managing regulatory complexity – as digital regulations continue to increase but also evolve and change, compliance will become increasingly challenging.  

There is a lack of AI regulations – patchy and non-consistent AI regulations and country-specific approaches to AI regulations, could hamper wider AI adoption. The imminent EU AI Act could accelerate the push for similar regional regulations.

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