Kazakhstan is on the threshold of the era of the cloud economy. In the coming years, the country expects the transition of major industries to digital solutions, which will have a positive impact on the efficiency of companies. Business conservatism and difficulties with storing personal data abroad remain constraining factors. However, the global trend towards cloud technologies leaves fewer and fewer chances to work the old-fashioned way.

Kazakhstan is now actively integrating into the world IT community: adopts best practices and development strategies. The active use of cloud technologies is just one of the indicators of the level of development of ICT services in the country. They help businesses become fast and affordable, flexible and scalable. 

What cloud technologies are, who needs them, why they are popular and how things are going with development in our country, we understand together with the head of SAP projects at the international IT company IBA Group By Zukhra Livitskaya. She has been engaged in digital business transformation for more than 13 years and has helped dozens of companies from Kazakhstan with the implementation of various IT systems and solutions. 

Kazakhstan is getting used to clouds: why they are needed and how they work

International suppliers of new technologies give priority to cloud solutions, because the demand for them is constantly growing. In 2023, experts estimated the cloud computing market at almost $590 billion. It is expected to grow to $676 billion in 2024, and to $2.292 billion by 2032. The numbers speak for themselves: the influence of clouds is becoming more and more noticeable. 

The cloud services market is also growing in Kazakhstan, but the figures are still more modest. By the end of 2022, according to iKS-Consulting Kazakhstan, it was estimated at almost $53 million (23.7 billion tenge). For comparison, in 2017 this figure was several times less — $5.3 million (2.4 billion tenge). But in three years, experts predict market growth of up to 72.5 billion tenge, if we count government services.

"We believe that in the next three years , the cloud services market in Kazakhstan may reach about $180-200 million (80-90 billion tenge). This is a significant growth, which indicates the massive transition of the economy to cloud technologies. The transition process will mainly affect large businesses, for which IT transformation is necessary. All this will allow the country and business to become more modern and competitive on a global scale," the IBA Group representative is convinced.

Cloud technologies are not a new term, they have been actively talked about since the 2010s. Flagships of cloud services provision — Amazon, Azure, and Google are still major players in this market.  

“The idea of cloud development is an evolutionary process. How did it all start? Let's imagine that we live in the early 2000s and we need to install a new IT solution for our business. To do this, we are looking for a free data center or building our own. A data center is a complex that needs to be equipped in accordance with all safety techniques: fire safety, security, air conditioning. You also need to buy servers and have a stable high-speed Internet connection. All this requires a lot of time and money,” says Zukhra Livitskaya.

In such cases, companies could have miscalculated the amount of, for example, storage, RAM or CPU. There might not be enough own capacities, or, conversely, there were too many of them and they were idle. It was impossible to fix the situation promptly. This is a complex, cumbersome and expensive model that was not available to everyone. And certainly having alternative options that should be carefully studied.

The next step in the development of clouds was the model Colocation — renting a server space in someone's data center.  It allowed the business to be freed from the maintenance of a data center with fire protection, air conditioning, Internet, etc. But there was still server maintenance, administration and updating.

“Let's go back to Amazon again. The company realized that during times of low demand, it could rent out its servers. And this model began to develop rapidly, as it opened up new opportunities for both the supplier and the customers. With this approach, there is no oversupply or lack of capacity: the business quickly receives exactly as many resources as it needs, and pays only for them. For example, if the CPU is used by 80% or vice versa, less than 20%, then the configuration should be optimized. In the cloud, you can use as much computing power as you need at the moment: connect and disconnect resources depending on the load and the number of projects,” the expert notes.

Today, the cloud is a network of large data centers distributed around the world, in which a huge number of servers are located, provided with everything necessary: the Internet, the level of protection, employees, security systems and others. The business only has to choose the right supplier, subscription and deploy the landscape. 

You can choose different service options: IaaS, PaaS, SaaS. The latter is software as a service. PaaS is a broader concept, since equipment, infrastructure, and platform are already leased, for example, Java, Python, Azure, etc. IaaS is an equipment lease. Basically, businesses are faced with the SaaS model, this is the most popular option. 

The widespread development of clouds is facilitated by the development of the Internet. By becoming fast and publicly available almost anywhere in the world, it has brought the cloud closer to the consumer at arm's length.

Global vendors of IT solutions, for example, SAP, are actively developing cloud platforms and services — now they invest much more in them than in on-premise solutions, that is, local, on the “ground". So far, “ground-based” products are supported and used along with cloud -based ones to get the business used to the new. However, the trend is that vendors will gradually transfer their customers to cloud rails. From the point of view of administration, the same SAP takes away some of the low-level tasks, and the system administrator can only apply on the portal to complete the work.

Kazakhstan is slowly catching up with Western countries

Cloud projects in Kazakhstan are still developing more slowly than in Western countries. There are two reasons for this: the problem of personal data storage and geopolitical processes in the region.

In Kazakhstan, according to the law on personal data, human data cannot be stored outside the physical borders of the country. And here the problem arises. For example, when implementing well-known global IT systems , you need to use servers located in Europe. For example, if a business wants to implement a cloud service from SAP, then the data will be stored, for example, in Germany. However, according to the law, this cannot be done: personal data must be stored in Kazakhstan. 

There are no data centers in Kazakhstan that work with the same servers as vendors. For example, the vendor only works with servers Azure, but there are none in the country.

“But there are positive stories too. Several companies in our country have nevertheless implemented similar cloud solutions, taking into account all the nuances. Encryption was used when transferring data — the information was sent without personal data of users with a double key. But it is not easy, expensive and labor—intensive,” explains the head of SAP projects.

If the solutions do not use data that contains full name, BIN and other personal information, then such systems are implemented with the permission of information security specialists. And here a lot depends on the specific specialist and his resolution.

Businesses also have concerns about data security. Technically, companies understand that there is security, encryption, but the fear of confidentiality of information is still present. Many top managers of companies fear that anyone, anytime, can access data stored in the cloud in another country, and the company will not even know about it.  

The second problem is geopolitical issues. Business understands that when implementing foreign solutions, services may stop working due to various geopolitical processes that the company cannot influence in any way. For example, due to sanctions restrictions, it may be suspended license, support and subsequent updates. Or the company will not be able to use its solution at all, for the implementation of which it has spent more than one year and hundreds of thousands of dollars. 

Thus, the lack of data centers with the right clouds, fear for data security and geopolitics — all this hinders the development of cloud solutions in Kazakhstan.

The arrival of global players in Kazakhstan dispels fears

“Kazakhstan is actively integrating into the world The IT community, therefore, cloud development is a necessary element of this process, because cloud solutions provide a good basis for innovation. In addition, many companies consider cloud solutions as an element of investment: the cloud helps to increase profits and business turnover, increase business efficiency, while reducing costs. In the long term, this is a profitable project, and not just the digitalization of processes,” the IBA Group representative is convinced.

The construction of data centers in Kazakhstan by international companies will increase the number of cloud projects. For example, Microsoft plans to launch its data center in the country. In addition, over the past couple of years in Many large IT companies have opened their offices in Kazakhstan, which also have dozens of successful cloud projects in their portfolio for clients from different countries. All this will give a huge boost to the development of clouds and help dispel the fear of them.   

“It is not easy to convince our business, but we are constantly working on this. We try to do this in negotiations, we talk about it at conferences, seminars, round tables. There is understanding, but the phobias are still stronger. It is important to show successful examples from neighboring countries, emphasize the economic benefits and ease of implementation and use,” Zukhra Livitskaya believes.

Cloud solutions provide reliability and security as good as on-premise, and often better. They use a global hyperscale infrastructure to ensure a high level of performance and data protection. To overcome fear and understand how it works, we advise companies to start implementing small cloud solutions that will become a starting point in the cloud world. After successful implementation, there is no need to explain the need for a transition — the business itself asks for it.