The Answer Is a Mix

Cloud and Data Center

Microsoft is putting 15.2 billion US dollars into the UAE between 2023 and the end of 2029. Announced in November 2025, the investment includes a 200 megawatt expansion of data center capacity, delivered with G42 through Khazna, with capacity expected to start coming online before the end of 2026. It is not an isolated bet: Gartner forecasts that data center systems spending across the Middle East and North Africa will grow more than 37 percent in 2026, the fastest-growing segment in a regional IT market it expects to reach 169 billion US dollars.

Capacity on that scale gets built for a question a great many organizations are now re-deciding at once: where should their workloads run. And in our work with UAE enterprises across sectors, those decisions keep landing in the same place. Not all cloud. Not all on-premises. A mix, decided workload by workload.

For a decade the industry argued about defaults: cloud first on one side, caution on the other. That argument is over, and neither side won. The estates that work in 2026 are mixed, not because anyone’s strategy failed, but because different workloads answer to different forces. The real question was never cloud or on-premises. It is which workload, in which location, at what cost, and can you defend the choice.

The three forces that place a workload

Economics and physics touch every organization. Latency to the users and systems a workload depends on, the gravity of the data it sits beside, the cost of moving data out, the price of idle capacity when demand is uneven, and the premium on the specialist compute that AI now demands. These forces do not care what sector you are in, and AI has made the old sums unreliable for everyone, because the workloads that matter most now sit next to large data sets and expensive compute.

Law places some data outright. In the UAE, three categories have their location set by regulation rather than by architecture: financial customer and transaction data under the Central Bank’s consumer protection standards, health data under Federal Law No. 2 of 2019 unless the relevant health authority approves an exception, and government data classified as secret, sensitive, or confidential. If your organization holds any of these, part of your estate has already been placed for you. And in February 2026 the direction became unmistakable, when the Central Bank of the UAE launched what it describes as the world’s first sovereign financial cloud infrastructure, built with Core42, so that regulated institutions can use modern analytics without their data leaving the country. When a regulator does not just write rules for the cloud but builds one, placement has become a regulated matter.

Even if none of your data is regulated, this force reaches you at one remove, through a distinction that in our experience is the one most often missed. Data residency is where information physically sits. Data sovereignty is whose law governs it. A system hosted in the UAE that passes data to a model or a service processed elsewhere has moved the sovereignty even though the residency looks unchanged. Every organization using AI tools needs to know where processing happens, not only where storage sits.

Proof is demanded of everyone. Regulators ask regulated firms. But auditors ask everyone, cyber insurers ask at renewal, and large customers increasingly ask in procurement due diligence before they will sign. A placement you cannot evidence is a finding, an exclusion, or a stalled contract waiting to happen, whatever sector you are in.

Two estates, same forces

Picture a bank. Law places its customer and transaction data in-country, sovereign infrastructure now exists for its analytics, and proof is a way of life. Its mix leans heavily toward in-country and sovereign platforms, with room elsewhere only for what the rules leave free.

Now picture a retailer or a logistics operator holding no regulated data at all. Its estate is still not free of the forces. An ERP that struggles at peak because it runs far from the sites that use it. An analytics platform whose charges for moving data out climb every quarter. A marketing team quietly passing customer data to an AI tool hosted abroad. A multinational customer whose procurement questionnaire asks where that data lives. No law has been broken anywhere in that picture, and every item in it is a placement decision.

Two organizations, two different mixes, produced by the same three forces weighing differently on different workloads. That is why the answer is a mix, and why no organization can simply copy another’s.

The four questions that decide placement

In our work with UAE enterprises, placement decisions that hold up are made workload by workload, not estate-wide, and they answer four questions in order. A decision that skips any one of them tends to be revisited within a year.

First, does the law decide this? If the workload touches regulated financial, health, or classified government data, location is a compliance requirement and the remaining questions are about how, not whether. For most workloads in most organizations the answer is no, and the decision is genuinely yours. Asking is what tells you which kind of workload you are holding.

Second, will the workload actually work there? This is physics rather than policy. Latency to the users and systems it depends on, the gravity of the data it sits beside, and whether the specialist compute it needs is available in that location. A workload that is legally placed but technically starved has not been placed well.

Third, what does it genuinely cost there? Not the headline rate. The full picture: what it costs to move data out, what idle capacity costs when demand is uneven, and what the specialist compute premium looks like where you intend to run it.

Fourth, could you prove the decision later? A placement you cannot evidence is a finding waiting to happen, and regulators are no longer the only ones asking. Auditors ask, cyber insurers ask at renewal, and large customers increasingly ask in procurement due diligence before they will sign. If any of them asked next quarter where a given dataset lives, who can reach it, and why it sits there, the answer should already be documented rather than reconstructed.

Where Al Rostamani Communications fits

Working through those questions produces the mix, and delivering a mix is a different job from delivering a platform. It maps to three things we do.

Deciding. Our Consulting and Professional Services teams work with Cloud Solutions to assess an existing estate workload by workload and produce a placement design: what belongs on in-country infrastructure, what belongs in a UAE cloud region, what can sit anywhere, and what the move sequence should be.

Building and connecting. Our Data Centre and Cloud Infrastructure practice delivers the in-country and hybrid footprint, and our Enterprise Networking and Network Traffic Management practices connect the tiers so that a split estate performs as one environment rather than several. A mixed estate is only as good as the connections between its tiers, and that connective work is where these designs succeed or fail in practice.

Running and proving it. Our Managed Services keep the result operating around the clock, with the documentation and monitoring that turn a placement decision into something you can evidence on request.

As a trusted partner of leading global technology providers, and with more than 23 years and over 400 enterprise clients in the UAE, we have moved a great many workloads. The pattern that holds is that the organizations who get this right treat placement as a decision to be made deliberately and recorded, not a default to be inherited.

Start with the systems you would struggle to explain

You do not need an estate-wide review to begin. Take the three or four systems that matter most, and ask the four questions of each one.

The revealing test is the last one. If a regulator, an insurer, or your biggest customer asked tomorrow where your most sensitive data sits, who can reach it, and why it lives there, how much of that answer exists in writing today?

Al Rostamani Communications helps UAE enterprises decide where each workload belongs, build and connect the in-country and hybrid infrastructure to run it, and prove the decision afterwards. Talk to us at arcuae.com.