Johnny Karam, Managing Director & Vice President for International Emerging Markets at Cohesity, highlights that UAE businesses are increasingly exposed to risks and missed opportunities due to unclassified data. He emphasizes that smarter data management and robust classification are critical to unlocking AI’s full potential and driving the success of the UAE’s digital economy ambitions.
The world generates approximately 400 million terabytes of new data every day through activities like Instagram comments, Slack messages and Zoom recordings. Every byte of data needs a home, and storing unnecessary data can be incredibly costly for businesses. In the UAE, this surge in data is mirrored by the country’s rapid transformation into a digital-first economy powered by initiatives like the UAE National Strategy for Artificial Intelligence 2031, which aims to embed AI, automation, and smart data usage into public services and infrastructure.
What’s worse, UAE businesses don’t even know what they’re storing. Employees download personal files from bills and passport scans to pictures of their children, many of which pose a risk. While their desktops might be cluttered, the problems run much deeper.
Without visibility into their data or its storage locations, businesses struggle to manage storage, comply with regulations, and fully leverage the power of AI. This challenge is especially critical in the UAE, where AI integration is rapidly advancing across public and private sectors as part of the nation’s broader digital transformation. In such an environment, disorganised data doesn’t just slow progress, it can fundamentally undermine high-impact initiatives.
The hidden cost of unclassified data
Most businesses overlook their data practices, often underestimating the risks. According to the CPX’s State of the UAE Cybersecurity Report 2025, the financial implications of data breaches in the Middle East, including the UAE, continued to rise in 2024, placing the region second globally in average breach costs, often exacerbated by poor data management practices.
Think about it: critical files scattered across desktops & servers, buried in email threads, or saved under vague names.’ Not only does this make data harder to access when needed, but it also increases security risk. When data is scattered and unorganised, finding what you need becomes a challenge, and that’s exactly when security gaps start to appear.
It’s not just about security, wasted storage costs, inefficiencies, duplicated efforts, redundant systems, and lost time. It’s about missed opportunities. When companies aren’t able to extract vital insights from their data, they miss out on market trends, customer needs and make poor decisions.
At the same time, compliance expectations are rising in the UAE, driven by the Federal Decree Law No. 45 of 2021 (the Personal Data Protection Law) and related national cybersecurity mandates, which reflect a growing regulatory push for responsible data use. Unclassified data makes it impossible to ensure compliance, leaving businesses open to hefty fines and reputational damage.
This reinforces a broader point: as organisations increasingly rely on third-party systems and integrated platforms, vulnerabilities in any part of the ecosystem can carry significant consequences. In highly connected environments like the UAE, securing these extended networks is essential to maintaining trust and continuity.
The solution? Businesses should get serious about their data management practices. Structured data management reduces costs, improves efficiency, and ensures compliance. The hidden cost of unclassified data is too high to ignore—it’s time to clean up the chaos. They shouldn’t t need to wait to be told by a regulator to do this.
Why classification matters
Data classification, at its core, its indexing data based on type, structure, relevance, and sensitivity, and then connecting the data to a relevant record policy.
Most companies will have some form of data that is indexed and classified, like customer records and transaction logs, as well as unclassified data, —the scattered emails, PDFs, and videos. As we’re still in the early stages for AI to give us faster and more accurate insights, we need strong foundations to draw from.
Take ChatGPT, for example. It generates responses based on broad training data, which is great for drafting emails, but not so great for precise, data-driven insights.
That’s where modern data storage and indexing solutions come in. Many third-party providers don’t just store data; they make it smart by using advanced methodologies and proprietary natural language processing applications. RAG (Retrieval-Augmented Generation) AI, unlike generic internet-trained models that draw from anything and everything, RAG retrieves and verifies information directly from properly indexed data, ensuring the source of its context.
The impact? Businesses get actionable intelligence from better-organised data, smoother workflows, cost savings, regulatory compliance, and happier colleagues. These benefits go beyond operational efficiency; they directly support the UAE’s strategic goal of having digital economy sectors contribute 20% to national GDP by 2031. Reaching this target requires a strong foundation of clean, structured, and trustworthy data across all sectors.
Steps to smarter data management
To stay ahead, businesses must modernise how they manage data and move to automated cloud systems, that enable indexing, and classification. It begins with clear, business-aligned goals and the right tools to enable action. From there, businesses can test, refine, and scale AI solutions.
Ultimately, the key is to set a clear governance structure and get data in order before regulatory requirements become crushing. As the UAE cements its place as a global AI and digital economy leader, having clean, structured data isn’t just a tech upgrade—it’s the backbone of agility, trust, and long-term success.