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Economy / Investment

Big data success in the Middle East: How Microsoft is helping young start-ups

The world’s tech movers and shakers are an increasingly global bunch.

The big success stories of the tech world used to start in someone’s garage, with a bit of homemade hardware, a big dream and a lot of hard work. Today, though, for the steady stream of new would-be tech unicorns – that is, businesses valued at over $1bn – there are supportive, thriving entrepreneurial ecosystems springing up all over the world. The world’s tech movers and shakers are an increasingly global bunch, and there are helping hands available wherever they turn.

More than ever, the new technology driving these start-ups is focused on data. With today’s digital economy increasingly powered by data, it is no surprise that so many commentators have begun referring to data as “the new oil”. There are huge amounts of data available in the global economy. Recent GlobalData research cites the examples of 3.5 billion Google searches and 1.3 billion internet-of-things connections per day, and 254 exabytes (one exabyte is a billion gigabytes) of mobile broadband data traffic per year. When all this data is scattered across formats and is difficult to analyse, it’s of little value to businesses or consumers. The term “big data” refers to large, diverse data sets that can be analysed to reveal patterns and trends in behaviour. The benefits of harnessing big data are huge and varied, from creating customer profiles to predictive modelling.

The key features of big data that make it so powerful are its volume (huge amounts), velocity (high speed and streaming of data), variety (different formats) and veracity (accuracy and reliability). These things make it hugely useful to businesses and consumers. For example, an online retailer can use rapidly analysed data to make a recommendation to a customer while they are browsing a website.

The amount of digital data in the world began to increase exponentially after 2010, and it is expected to keep growing 26% a year up to 2022. Alongside this, the cost of computing, including big data production, continues to fall, partly because both computing power and digital storage can be rented on the cloud. In combination, these conditions create a virtuous cycle for the growth of big data in the modern economy.

And the Middle East is playing its part, with successful products, and brands across big data, health tech, property tech, education tech and AI are being produced at a speedy rate. The UAE in particular has become a hotbed of start-up and tech growth. According to start-up data analysis company Magnitt, more than 60% of investment funding for start-ups in the MENA region was given to projects based in the UAE in 2019. And 2018 saw two Middle East-based start-ups scooped up in big deals by Western companies; ride-hailing app Careem was acquired by Uber for $3.1bn in 2019, while online retailer Souq.com was purchased by Amazon in 2018 for $560m.

Several major tech corporations, including Microsoft, Google, Facebook and Twitter, have made their MENA HQs in the UAE. Now, with the tech ecosystem Hub71 offering networking opportunities, access to capital and global markets, as well as mentoring and business development prospects between well-established companies and young entrepreneurs, Abu Dhabi has risen in the past 18 months as a winning location for budding innovative tech start-ups and scale-ups.

Sayed Hashish, general manager for Microsoft UAE, which has been operating in the country for over 25 years and is a strategic partner of Hub71, explains that there is a strong start-up culture and plenty of advice available for young entrepreneurs looking for their next move into the Middle East. Microsoft is a leading light in the big data industry across seven technology segments, including data security, storage, processing, aggregation and integration.

“The UAE has become a hub in many areas, including technology,” he says. “Accordingly, it made a lot of sense for us to base more people here. As a matter of fact, a lot of our employees prefer to be based out of the UAE while serving the rest of the MENA region. It’s both an employee preference and a company preference, in terms of the ease of doing business in the country, the availability of good services, decent infrastructure and a good location. All those factors together made it a viable decision for us to continue to invest and grow in the UAE.”

Partnering with state-owned Mubadala Investment Co, Microsoft helped in design-thinking the already vibrant tech ecosystem in Abu Dhabi, Hub71.

The timing, says Hashish, was perfect: “Hub71 was launched to serve and build the start-up ecosystem at the same time that we were starting to build our data centres, allowing us to better serve our customers. We started talking about what Microsoft could do and what other partners could do to support this effort. It was exciting, because focusing on start-ups is part of our core mission, to empower every business and organisation on the planet to achieve more.”

And Microsoft has certainly fulfilled that mission: in addition to helping build the huge data centres operating in the region, the company, which is the only one in the US to still be worth more than $1trn after the coronavirus pandemic, has made plenty of time to mentor newer companies.

Atif Mahmood, founder of British edtech start-up Teacherly, says that opening the company’s second office in Abu Dhabi (the first is in London) has given his start-up the boost it needed.

“Microsoft is a partner at Hub71 and has been one of our huge supporters. We have a great partnership with them now, all because of Abu Dhabi’s Hub71,” Mahmood says.

Now, he says, the tech giant has formed a business partnership with his once-small start-up, something he admits he previously could only dream of.

As many start-ups worldwide are struggling to find the next big step for their success, Abu Dhabi may hold the answer in terms of strategic partnerships with Big Tech corporations within a comprehensive, dynamic tech ecosystem that many have found so advantageous.