At the 18th edition of the Telecom Review Leaders’ Summit, the panel titled, ‘Developments in the Cloud Industry and the Role of Hyperscalers,’ explored the role of cloud hyperscalers in a connected world, key developments in the cloud industry, major trends like AI and sustainability within data centers, and strategies to maximize cloud investment returns.
Moderated by Jonathan Zelmanovitch, Partner, PMP Strategy, the discussion featured insights from Rick Kapani, Founder and CEO, Apptium; Noman Waheed, Head of Technology, Middle East, Nokia; Mohamed Hamouda, Regional Director for Business Development and Solutions Sales, NEC GCC; Maria Stebneva, Head of Sales, Canada, Juniper Networks; Majid Al Naqbi, Head of Data Centre Business, ICT, du; and Pavel Vishnyakov, Senior Solution Architect, Huawei Cloud MECA.
Hyperscalers Driving Cloud Market Growth
The global cloud market, valued at USD 5.4 trillion, is proliferating, with hyperscalers at the forefront of this expansion. Apptium’s Kapani highlighted how hyperscalers are dominating the cloud, SaaS, and software services sectors, which has demonstrated an annual growth rate of 19-23%.
"Hyperscalers control the lion's share of this USD 4 trillion market," noted Kapani, underscoring their central role in driving the sector forward. This growth is primarily being driven by advancements in AI and the increasing migration of telecom services to the cloud. Kapani explained that he foresees a future where traditional telecom services are available through the cloud with a simple click, "disrupting conventional business models and offering new opportunities for innovation."
Similarly, Juniper Networks’s Stebneva pointed out the exponential growth in traffic generated by hyperscalers, noting that "several years ago, we were talking about megabytes, now we are talking about gigabytes." This volume emphasizes how rapidly the industry is scaling.
Hyperscaler and Telecom Carrier Symbiosis
A key theme discussed was the mutual dependency between hyperscalers and telecom carriers. Huawei’s Vishnyakov explained that cloud adoption has driven growth in telecom, particularly in the B2B space. "The cloud part is the fastest growing and can contribute the most," he stated, highlighting the critical role of cloud technologies. He further noted that while data centers are necessary, their value is fully realized when connected to global networks, often through partnerships with telecom operators.
"Carriers and hyperscalers are best friends," he emphasized, showcasing the strategic collaboration between the two. Similarly, NEC GCC’s Hamouda echoed this sentiment, stating, "Hyperscalers need the capabilities; the telcos need the capabilities," highlighting the mutual dependency that fosters closer cooperation and ultimately builds strong cloud infrastructures.
Overcoming Challenges in Hyperscaler-Service Provider Partnerships
While hyperscaler-service provider partnerships have flourished, challenges remain regarding pricing and investment. Stebneva acknowledged the complexities of these partnerships, especially in markets like the U.S., where service providers face price increases from hyperscalers. "It's just tremendous investment, which will not be justified if you don't realize your internal investment," she cautioned, stressing the need for long-term, rational partnerships.
Stebneva also pointed out the growing importance of sustainability in these collaborations, as hyperscalers like AWS, Azure, and GCP have pledged to achieve carbon neutrality by 2040. Additionally, she noted the increasing role of edge computing, stating that "localized computing at the edge is becoming increasingly critical to reduce latency and enhance user experiences," even as hyperscalers centralize infrastructure.
Financial Considerations and ROI in Data Centers and Cloud Services
Rapid data center and cloud market growth offer substantial financial opportunities, but success depends on timing and market dynamics. du’s Al Naqbi stressed the importance of acting quickly to capitalize on the growing demand for cloud services and data centers. “If you don’t start now, others will come, start, and then you will miss this opportunity,” he warned, emphasizing the fast-moving nature of the industry. He further explained that ROI in this space is heavily influenced by supply and demand dynamics, with returns accelerating when demand outpaces supply.
“As technologies evolve and demand continues to grow, the potential for strong returns continues to rise,” he noted, underscoring the financial benefits of timely investment. Al Naqbi said that the cloud and data center sectors are now seen as “real businesses” with strong returns, attracting increasing stakeholder interest.
The Role of Sovereign Cloud Services in the GCC
The emergence of sovereign cloud services, particularly in the GCC region, is significantly increasing. Nokia’s Waheed highlighted the growing importance of these localized cloud solutions, which are being driven by regulatory requirements and the need for secure data processing.
“The developments are happening daily,” Waheed remarked, reflecting on the fast pace of change in the industry. He explained that, in the UAE, Nokia has “built cloud service capabilities that align with the country's security regulations." Nokia’s alignment underpins the importance of compliance in the region.
As demand for secure, localized data analytics and cloud services grows, Waheed emphasized that these sovereign cloud solutions are becoming essential for both the public and private sectors.
Conclusion
The cloud industry is rapidly evolving, with hyperscalers playing a central role in driving innovation across cloud services, telecom, and data management. Collaboration between hyperscalers, telcos, and service providers has proven essential in overcoming pricing, security, and scalability challenges. As the industry evolves, trends like sustainability, edge computing, and sovereign cloud services have become critical areas to watch. It’s evident that hyperscalers continue to remain indispensable as they drive technological advancements and address market demands, shaping the future of the global digital ecosystem.
