The rise and rise of cloud computing in Saudi Arabia

The country records 40% jump in cloud computing growth

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  • Image source: Pankaj Kirdatt/MITSMR Middle East

    Despite the macro concerns and tightening of IT budgets, the overall growth in cloud spending is robust. As organizations increasingly rely on cloud-based services and data storage, the technology has been swiftly transforming how we consume and store digital information and has been a competitive driver of operational efficiency, mainly to find a balance between security and agility.

    In Saudi Arabia, streaming services, AI, Internet of Things (IoT) devices, and the proliferation of digital content have seen massive surges in development and use — and demand for these digital resources has skyrocketed. 

    Last year, Google opened its first cloud region in Saudi Arabia to deliver high-performance, low-latency Google Cloud Platform services, catering to diverse clients from public sector organizations and large businesses to SMEs and startups across the country and beyond.

    According to research commissioned by Google Cloud and conducted by Access Partnership, the new cloud region will contribute a cumulative $109 billion to the Saudi economy between 2024 and 2030 and add 148,600 jobs by 2030.

    Even Oracle also announced an investment of $1.5 billion to boost cloud capacity in the country.

    And now, the latest quarterly bulletin from Saudi Arabia’s Ministry of Commerce recorded that the issuance of cloud computing permits increased 40% year-on-year to reach 1,759 between October to December 2023.

    This is up from the 1,252 permits issued in the same period in 2022 and underscores the country’s ambition to make the region a tech hub by 2030.   

    As per the ministry report, Riyadh took the lead in registrations with 1,062, followed by Makkah at 346 and the Eastern Province at 216. Meanwhile, Madinah allocated 46 permits, and Asir issued 24. The country’s Cloud First Policy encourages government authorities to migrate from traditional IT infrastructure to cloud platforms. 

    With data increasing exponentially, IDC forecasts that the IT services market in Saudi Arabia will grow at a compound annual growth rate of 9% over the 2022–2027 period, reaching $6.4 billion in 2027. The cloud computing market in Saudi Arabia has been steadily growing, with annual spending on public cloud services projected to reach $2.5 billion by 2026, a CAGR of 25%.

    Looking at the bigger picture, it’s clear that this market is enormous, still largely untapped, because Saudi Arabia is relatively late to the cloud race, and cloud adoption leaves much room for growth.

    Keen to know how emerging technologies will impact your industry? MIT SMR Middle East will be hosting the second edition of NextTech Summit.


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