“Data is the new oil” is a term first coined in 2006 by British mathematician Clive Humby. The phrase has aged well, so much so that it is now part of corporate and technology jargon along with other widely used variations, for example “data is the new gold”.
The ever-increasing reliance on data has helped conceive a whole new ecosystem based on the fundamentals of storing and analyzing data. A key part of this ecosystem is cloud computing, and as Pakistan moves towards digitizing its economy, the role of cloud technology will continue to expand.
However, according to experts, the current infrastructure for data management in the country is in most cases fragmented and outdated because the internal IT departments do not have the necessary competencies to keep up with technological advances. This leads to a lack of flexibility in data management.
Another indication of the need to develop the cloud ecosystem as quickly as possible is the fact that Pakistan did not make it into the Association of Cloud Computing Asia’s Cloud Readiness Index. Countries like India, Indonesia and Vietnam are all represented in the ranking.
However, attempts to work on it are still ongoing. Recently, Daraz Pakistan and Alibaba Cloud signed a memorandum of understanding on September 17, 22 to provide cloud services in Pakistan.
Alibaba, which acquired Daraz in 2018, is one of the largest cloud service providers in the world and ranks among the top five cloud service providers (CSP).
The signing of Daraz’s Memorandum of Understanding with Alibaba was presided over by Rukhsana Afzaal, High Commissioner for Pakistan, in the presence of Daraz Founder and CEO Bjarke Mikkelsen and Alibaba Cloud Intelligence General Manager for South Asia and Singapore, Dr. Derek Wang testifies.
A little bit about Daraz before we continue. Established in 2015, the company is one of the most famous e-commerce brands in Pakistan. It has over 40 million active monthly users and over 100,000 active sellers. Additionally, Daraz University, Daraz’s online learning center, offers personalized and localized courses covering all areas of the e-commerce ecosystem. “We are excited to partner with Daraz to bring digitization opportunities to Pakistan, and by offering our proven cloud computing services, we are confident of helping Daraz build Pakistan’s digital dynamism for the benefit of the broader ecosystem,” said Wang much-needed hope about the partnership. .
Such partnerships allow local companies like Daraz, Telenor, etc. to market the services of established CSPs and earn a margin of between 10 and 20 percent. In addition, by entering cloud services in this way, these companies save on the costs of investing in their own infrastructure.
What is a cloud?
It’s pretty obvious by now that we’re not talking about those fluffy white things in the sky that sometimes turn gray and rain down rain on us. Aside from our cloud being perhaps so intangible, what we refer to could not be more different. This is a wireless “cloud” system for data storage. The National Institute of Standards and Technology, US Department of Commerce says, “Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and… Services). that can be deployed quickly and enabled with minimal administration or interaction with the service provider.”
This basically means that cloud computing is built on the infrastructure that enables the delivery of multiple services and applications directly over the internet. These services include network, database, software and data storage. In business terms, think of it as rationing your supplies at a third-party warehouse. In this case, the third party will also sort and pack them. To put it even more simply, the cloud provides an infrastructure that can replace local storage (in most cases, computer hard drives).
Why can’t we proceed with local storage?
Local storage—anything stored on-premises, on a flash drive, or local file server—has served us well over the years, but the cloud is a game changer. It’s more efficient, offers huge cost savings, has much better data management and protection, and processing capacity is higher than what most local storage systems can offer. Additionally, it facilitates user mobility as the data is accessible from anywhere in the world.
Use cases for the cloud in the Pakistani market
According to industry experts, the current infrastructure for managing data in the country is, in most cases, fragmented and outdated. Internal IT departments do not have the skills to keep up with technological advances. This then leads to a lack of flexibility in data management, a major reason why many websites crash when traffic is high.
Cybernet’s RapidCompute, Multinet, PTCL and Jazz’s Garaj are the only significant local providers, while Telenor has partnerships to offer Alibaba’s cloud services. The range of offers can be different in both partnerships. International providers such as Amazon Web Services and Huawei Cloud have also ventured into the Pakistani market.
“Around 70% of the IT budget of large companies is spent just on infrastructure maintenance, while around 30% is left on innovation. Once they move to the cloud, the tables turn and you have a higher amount left to invest in scaling businesses, and on top of that there are value-added services for businesses that CSPs can provide to further support businesses.” said Ovais Khan, Head of Delivery, MENAP at Systems Limited Benefit.
While sharing a cloud use case in the financial services sector, Khan added, “On the lending side, we are looking to automate the entire process of customer credit assessment and KYC, which is a major delay factor in timely loan disbursements. An enabled cloud system in this situation serves as a central point not only to collect the data, but also to perform analysis and other procedures.”
Basically, a centralized data server breaks down the silos that otherwise exist between departments of large organizations that maintain their internal data storage. Next, an effective third-party cloud system is equipped with advanced analytics tools like machine learning and powerful servers that can increase the accuracy and speed of data processing.
Currently, the situation is such that the usage of cloud services in the country’s public sector is comparatively low and a large part of the data centers are designed for the needs of a single company. This lack of centralized cloud infrastructure remains a major impediment to the benefits of cloud computing.
The integration of all government databases into cloud platforms will enable the government to better analyze the data, which will ultimately lead to an improvement in the quality of e-government services. A key point is that a cloud infrastructure will help ease the burden on the treasury of operating separate data centers for federal agencies and departments. It will also increase the level of data security, which is crucial for public and private organizations that face regular cyberattacks.
Ali Naseer, Jazz’s chief business officer, discussed in an article for a private publication that on-premises cloud infrastructure provides a standardized security framework that is much more secure than what other less “technical” companies can develop in-house. In addition, network interruptions due to technical faults can also be minimized if a central and certified service is used. (Most local data centers are Tier 3 certified)
The SMB crowd is also a market for cloud technology as the business case for them is very strong. In particular, export-oriented service companies, such as those in the IT sector, are increasingly adopting the technology as cost efficiency is key in a market where they compete on price to the end user.
Why operate locally when you have overseas services?
From a consumer perspective, if we were to compare local vs. foreign CSPs, the first point to consider would be cost. In reality, there is no comparison as the cost of cloud packages varies from customer to customer.
The situation is different when we have to do a baseline comparison, because foreign CSPs like AWS are cheaper when it comes to basic storage services. But if we add other features to the offer, such as backup recovery and customer support, then the package offered by local operators like Jazz’s Garaj would cost a lot less.
“An on-premises cloud infrastructure like Garaj powered by Jazz provides a better experience through localization. Besides storing Pakistani data in Pakistan, it includes features like 24/7 support in Urdu and English, flexibility to pay in Pak rupees, and customized offers. On-premises customers greatly appreciate such flexibilities that offshore cloud service providers typically do not offer. Currently, our state-of-the-art cloud platform serves around 50 companies from the banking, financial services, start-up and public sectors,” said Naseer.
However, according to Khan of Systems Limited, products from foreign service providers are much more resilient in terms of data storage, disaster recovery/continuity of services and security of those data/assets/systems living in the cloud. This would allow users to leverage web 3.0 technologies like blockchain for decentralized processing and storage.
The strategic importance of local infrastructure
Perhaps one of the strongest and most compelling arguments for building cloud infrastructure in the country comes from a data security perspective. In the recent past, cyber attacks on public and private organizations have resulted in the loss of sensitive data. In addition, the government has concerns about the storage of Pakistani companies’ data in other areas. According to SECP’s draft Cloud Adoption Guidelines for Incorporated Companies / Business Entities issued in August 2021, “When selecting cloud service providers, all business entities must ensure that the selected service provider does not offer services through its data centers located in a hostile country (i.e. India, Israel, etc.).”
Naseer added to these concerns; The fact that a large consumer base is currently using the services of foreign CSPs such as Amazon and Microsoft not only results in an outflow of generated revenue, but is also a missed opportunity for the government in terms of taxation.
An efficient cloud computing ecosystem therefore seems to be the only way forward. Not only does it serve as a foundation for the adoption of next-generation technologies such as the Internet of Things (IoT), but it would also help public and private sector users to leverage economies of scale and conserve financial resources.
