Saudi Arabia records 40% jump in cloud computing growth

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Cloud computing registrations have soared 40 per cent year-on-year in the Kingdom of Saudi Arabia, as demand for digital services in the country hots up.

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

This is up from the 1,252 permits issued in the same period in 2022.

Breaking down the numbers further, the ministry also said the bulk of registrations occurred in Riyadh (1,062) and Makkah (346).

Saudi Arabia’s major players

Late last year, technology giant Google opened its first cloud region in Saudi Arabia, making the kingdom part of its 39 regions around the world.

READ MORE: Google switches on cloud region in Saudi Arabia

Research commissioned by Google has indicated that the impact of the cloud economy will be $109bn in Saudi Arabia and that the sector has the potential to add 148,600 jobs by 2030.

Another major cloud player, Oracle, also recently announced an investment of $1.5bn in Saudi Arabia to boost cloud capacity in the country.

Taking a broader look at the IT space in Saudi Arabia, the latest Worldwide Semiannual Services Tracker from global market intelligence firm IDC forecasts that the Saudi Arabian IT services market will grow at a compound annual growth rate (CAGR) of 9 per cent over the 2022–2027 period, reaching $6.4bn in 2027.

Suraj Godse, Senior Research Analyst for IT Services, Trackers and Data Products at IDC, previously told Gulf Business late last year that more big players will enter KSA and establish more data centres there.

READ MORE: Here’s why Saudi’s IT services growth is fastest in MEA – IDC

“This includes not only cloud providers but also significant interest from large Independent Software Vendors (ISVs) looking to set up data centres and store their data within the country. The recent announcement of Saudi Arabia hosting Riyadh Expo 2030 has further positioned the country as a central focus for investments in the Middle East region,” Godse added.

“Notably, in the past year, several major players have already made significant announcements in this regard. Huawei disclosed plans for a cloud region in Riyadh, Oracle launched its cloud region in NEOM, and Alibaba established its cloud presence in Saudi Arabia. Additionally, large ISVs like Salesforce have expressed intentions to launch cloud regions, indicating a sustained momentum in this direction,” Godse said.