Even a veteran corporate man like Abdulrahman Al Thehaiban admits the recent rise of cloud computing came as a bit of a shock—and as Oracle’s top executive in the Middle East, he’s pretty much seen it all. He’s been with the pioneering vendor of database software for more than 20 years, witnessing everything from the dotcom bubble, to the evolution of the company’s regional workforce and dramatic leadership changes.
But today those all seem trivial compared to the arrival of cloud computing. “I was surprised to see a very major shift in a very, very short span of time,” says Al Thehaiban.
Since 2011, the Redwood City, California-based tech company has been aggressively developing an enterprise cloud business—a major transition for a company long-known for selling traditional business software and databases. For decades those products powered some of the world’s premier corporations, but sales have declined for years.
That’s because the cloud has changed the IT landscape. Rather than buying software and hosting it on their own computers, companies around the world are increasingly choosing to access vital computing resources—including storage, servers and software—housed at remote data centers run by cloud service providers. The cloud has also broken the dominance of multi-year enterprise software contracts, helping reduce costs through more flexible pay-as-you-go billing models.
Against that backdrop, Oracle is seeking to reinvent itself as a cloud-first company. So far, it’s mostly been a race to make up for lost time. It’s no secret that the company was late to cloud computing. Its co-founder and chairman, the billionaire Larry Ellison, was famously skeptical of cloud technology when it started attracting increased buzz nearly a decade ago, dismissing it as a fad that wasn’t properly understood.
Competitors weren’t so skeptical. Tech companies like Amazon and Google embraced the potential presented by the cloud. They, as well as cloud pioneers like Salesforce, developed cloud businesses as Oracle stood idle.
Finally, with more and more customers migrating to the cloud, Oracle reversed its thinking roughly six years ago, and set its sights on taking back ground from competitors in the cloud market. It’s a move that’s playing out around the world—including in the Middle East.
That’s Al Thehaiban’s territory, where he splits time between Riyadh and Dubai. “We have been expanding extensively,” says the Senior Vice President of Technology, Middle East and Africa.
Before the end of the year, the company plans to unveil a new state of the art cloud data center in Abu Dhabi. The facility is designed to serve the growing number of regional customers adopting cloud technology, says Al Thehaiban. It will be the latest in a series of regional moves by Oracle to bolster its local position.
In early 2017 it opened a new office in Dubai, called the Oracle Digital Hub. The office is designed to house 400 cloud sales representatives, with the goal of helping mid-sized organizations in the region transition to the cloud. Earlier this year, Oracle announced it plans to hire 1,000 cloud professionals across Europe, the Middle East and Africa, many of whom will end up in Dubai.
For customers in the region, Oracle today offers cloud solutions in a variety of different segments: infrastructure as a service (IaaS), which provides access to virtual storage and servers; platform as a service (PaaS), which allows users to develop and manage their own applications through the cloud; and software as a service (SaaS), which allows access to software applications hosted on the cloud.
In addition to public cloud, where storage space at a data center is shared by multiple customers, Oracle also offers private cloud, where hardware and storage are reserved for a single customer.
The goal is to provide end-to-end cloud services as part of a larger struggle underway in the region, where Oracle is in the midst of a cloud arms race. In September 2017, Amazon’s cloud subsidiary Amazon Web Services (AWS) announced plans to open its own data centers in the Middle East by early 2019, starting in Bahrain. “As countries in the Middle East look to transform their economies for generations to come, technology will play a major role, and the cloud will be in the middle of that transformation,” said Andy Jassy, CEO of AWS, in a press release. Globally, AWS boasted a 44.2% market share in IaaS public cloud services as of 2016, according to IT research firm Gartner.
German competitor SAP also announced plans this year to open a data center in the U.A.E. Not to be left out, Microsoft has announced plans to launch a data center next year in South Africa, which will serve regional customers using its cloud platform. China’s Alibaba is in the mix too, having established a cloud data center in Dubai last year.
Competition is just one obstacle. “Cloud adoption has a few challenges around connectivity, lack of clarity around data governance, apprehensions around security and the lack of clarity around service level agreements from cloud services providers,” says Megha Kumar, the International Data Corporation’s (IDC) director of software research for the Middle East, Africa and Turkey. In addition to apprehensions from regional customers about moving their data to the cloud, Oracle has to contend with local cybersecurity laws preventing companies from housing data for Gulf clients overseas.
However, on a global level, initial returns on Oracle’s shift to the cloud seem promising. Although its declining legacy software licensing business still brings in the bulk of revenues, it’s the cloud that’s driving growth. For its 2017 fiscal year, cloud revenues were up 60% to $4.6 billion, while total revenues were up 2% to $37.7 billion.
In the region, Al Thehaiban declines to break down local revenues specifically, where the overall outlook may not be as rosy. Total cloud and on-premise software revenues (which were reported together) for Europe, Middle East and Africa amounted to $8.4 billion in 2017, virtually flat from the year prior, while hardware revenues fell.
Still, Oracle is finding customers for its cloud products and services. Today, some of Oracle’s cloud customers include companies like the Saudi Arabian Trading and Construction Company (SATCO), Sharjah Electricity and Water Authority (SEWA), Dubai World Trade Centre, Al Foah Company, National Agricultural Development Company (NADEC), Dubai Duty Free and Access Power.
Looking ahead, the national transformation initiatives underway in the region, like Saudi Arabia’s Vision 2030, project to drive demand for cloud adoption. “These initiatives that will make cloud essential for agility, cost optimization and IT performance pressures will also drive the demand for cloud,” says Kumar. Al Thehaiban agrees. He says as countries look to a future post-oil dependency they’ll be keen to adopt technology solutions that help reduce costs.
Overall, Al Thehaiban is optimistic about the promise of cloud computing in the region, where Oracle has been operating for 27 years. “The cloud is a new era in the IT industry,” he says.
He should know. Born and raised in Riyadh, Al Thehaiban started out as a programmer. He founded a small software development company in Saudi called Unix Consulting Group in the early 90s while he was in his early 20s. He ran it remotely while studying in the U.K. But after running the company for several years, he felt something was missing. “I believe at that time I wasn’t ready personally, in terms of skills, in terms of business management.” When Oracle established operations in Saudi, Al Thehaiban sold his software company and joined them as a sales representative in 1996.
Those were undoubtedly heady times for a burgeoning tech company like Oracle, with the dotcom bubble having yet to burst. Al Thehaiban remembers the company’s atmosphere was inviting for a young employee looking to advance. “It opened the door for a lot of creativity, a lot of innovation that helped me personally develop skills,” says Al Thehaiban. He took advantage, and earned promotions. In 2003 he rose to become managing director for Saudi Arabia. During that time, he also pursued an MBA in international business at the University of Edinburgh, which he earned in 2004.
In a leadership role, Al Thehaiban initiated the process of Saudization of Oracle’s local workforce. As it was difficult to find local employees with the right skill-sets, he implemented training initiatives and sponsored internships for Saudi nationals. “Now a big percentage of employees are homegrown,” he says. At that time there were no women in Oracle’s Saudi workforce, so he oversaw the hiring of the company’s first female employees in the country in the early 2000s. They’re accomplishments he singles out as major changes in the company’s local presence.
In those days Oracle was a leading vendor of enterprise software in the Middle East and North Africa, maintaining at times a market share of more than 40% in countries such as the U.A.E., Bahrain, Qatar and Kuwait. It found particular success securing clients in the financial, manufacturing and public sectors, with customers such as Emirates NBD, Bin Hafeez Group and Qatar University.
By 2007, Oracle was maintaining the position of the largest vendor of enterprise software in the U.A.E., with a 44% market share that accounted for revenues of $49.96 million, according to IDC.
Against that backdrop Al Thehaiban continued to advance within Oracle. But change was afoot. Founded in 2006, Amazon Web Services had already begun operations in the U.S.—an early sign of the coming changes.
Al Thehaiban recalls that he was initially concerned cloud technology would pose security challenges. “From a customer perspective, I thought, ‘Ok this is going to be challenging in the region because of security,’” he says. In a region that’s witnessed several high-profile cyber-attacks, the thought of relinquishing direct control of sensitive data and transferring it to cloud data centers naturally provokes unease in customers. But, given Oracle’s legacy as a data storage company, security has always been a focus area, which he hopes will help assuage fears. “One of the strengths of Oracle is security,” says Al Thehaiban.
Two months after Oracle rolled out its enterprise cloud platform, it secured its first regional cloud customer in Dubai, followed soon after by another customer in Saudi. That was a good indication of the potential for the technology, remembers Al Thehaiban. Still, it was a quick turnaround for Oracle, after having neglected the cloud for years.
The company worked hard to woo customers in the region. Oracle’s then President Mark Hurd even visited in 2013 to talk cloud with Sheikh Ahmed bin Saeed Al Maktoum, CEO of Emirates Airlines. The airline has ended up adopting some of Oracle’s new products, such as an enterprise cloud-service used for managing talent acquisition.
Amidst this reinvention, in 2015 Oracle promoted Al Thehaiban to Senior Vice President. That was only a year after Larry Ellison stepped down as CEO of the company after nearly four decades. He was replaced by Safra Catz and Mark Hurd, who serve as co-CEOs.
Still looking to make up for lost time, they’ve continued pouring money into the cloud, highlighted by the $9.3 billion deal to acquire NetSuite last year. Founded in 1998, the U.S.-based NetSuite was an early mover in early cloud computing, specializing in financial and resource planning software.
Ultimately, despite all the talk of cloud technology, on-premise computing isn’t going anywhere just yet. “I don’t think we’ve yet reached the level globally, or even locally, where there will be no on-premises,” says Al Thehaiban. Over the next decade he expects companies will continue migrating to the cloud in greater numbers. Al Thehaiban estimates Oracle has between 40-50% of its business applications available in the cloud. He expects that number to grow to 80% in the next five years.
Until then, Al Thehaiban has a busy schedule ahead—with a data center on the way and more cloud clients to chase.