Saudi Arabia Sees 40% Surge in Cloud Computing Growth

The Kingdom of Saudi Arabia is experiencing a remarkable surge in cloud computing registrations, with a substantial 40% year-on-year increase, underscoring the escalating demand for digital services within the country. According to the quarterly bulletin released by Saudi Arabia’s Ministry of Commerce, the issuance of cloud computing permits witnessed a significant rise, reaching a total of 1,759 for the period spanning October to December 2023. This notable surge represents a substantial increase from the 1,252 permits issued during the same period in the preceding year.

Analyzing the data further, the majority of cloud computing registrations were concentrated in Riyadh, accounting for 1,062 permits, followed by Makkah with 346 permits. The geographical distribution highlights the growing significance of cloud computing across key regions within the Kingdom.

One of the significant catalysts contributing to this surge is the entry of global technology giant Google into the Saudi Arabian market. Last year, Google inaugurated its inaugural cloud region in the country, becoming part of its extensive global network comprising 39 regions. This strategic move aligns with Google’s commitment to expanding its cloud services footprint globally and catering to the evolving needs of businesses and organizations.

Google’s research underscores the profound impact of the cloud economy in Saudi Arabia, projecting its value to reach $109 billion. Additionally, the research estimates the potential creation of 148,600 jobs by the year 2030, emphasizing the transformative role of cloud computing in driving economic growth and employment opportunities.

Another major player in the cloud computing industry, Oracle, has also made substantial commitments to the Saudi Arabian market. Oracle announced a significant $1.5 billion investment in the country, aiming to bolster cloud capacity and contribute to the digital transformation initiatives sweeping across various sectors.

Zooming out to the broader landscape of the Information Technology (IT) sector in Saudi Arabia, the Worldwide Semiannual Services Tracker by IDC offers insights into the anticipated growth trajectory. The tracker predicts a robust compound annual growth rate (CAGR) of 9% in the Saudi Arabian IT services market over the period spanning 2022 to 2027. This growth trajectory is expected to culminate in a market value of $6.4 billion in 2027, reflecting the increasing reliance on IT services and the broader digital ecosystem.

Suraj Godse, Senior Research Analyst at IDC, anticipates the entry of more significant players into the Saudi Arabian market, emphasizing the establishment of additional data centers. This includes not only cloud providers but also substantial interest from large Independent Software Vendors (ISVs), highlighting the diversified growth opportunities within the IT landscape.

Godse points to the strategic positioning of Saudi Arabia as a central focus for investments in the Middle East, particularly emphasized with the announcement of the country hosting Riyadh Expo 2030. Over the past year, several major players, including Huawei, Oracle, and Alibaba, have made significant announcements regarding the establishment of cloud regions in Saudi Arabia. These strategic moves underscore the sustained momentum and strategic importance of Saudi Arabia in the rapidly evolving landscape of cloud computing and digital transformation.

The surge in cloud computing registrations in Saudi Arabia reflects the dynamic evolution of the country’s digital landscape. The strategic entry of global technology leaders and significant investments from key players position Saudi Arabia at the forefront of the global cloud computing market. The transformative impact of cloud technology extends beyond economic metrics, with profound implications for job creation, technological innovation, and the overall competitiveness of the Saudi Arabian economy in the digital era.