Saudi Arabia Cloud Computing Market

Saudi Arabia Cloud Computing market is projected to grow at a whopping CAGR of more than 25% during the forecast period (2023-2030).

Introduction of the Saudi Arabia Cloud Computing Market Report

Saudi Arabia Cloud Computing market is witnessed to grow at faster rate over the forecast period. There are several government initiatives, which include the Saudi Vision 2030, Cloud First Policy, among others which is supporting the cloud adoption.

Major Saudi Arabia Cloud Computing Market Drivers

Growing digitalization has shifted the focus of government towards implementing the cloud services. Saudi Vision 2030 has encouraged foreign investment particularly in the technology sector. Moreover, the implementation of cloud first policy has accelerated the digital transformation by pushing the adoption of leading edge technologies, which includes Artificial Intelligence, 4th Industrial Revolution Technologies, among others.

Saudi Arabia government promoted the use of cloud computing by launching the Saudi cloud strategy in 2019. Under this strategy, government planned to expedite the adoption rate of cloud computing among public and private sectors. Through this expansion, Saudi government plans to enhance cybersecurity and to create more job opportunities. The Saudi cloud strategy aligned with the Saudi vision 2030 and the national transformation program 2020, aimed to transform the Saudi’s economy and society.

In 2023, the Crown Prince of Saudi Arabia launched the cloud computing special economic zone to aligned with the Saudi vision 2030 goals. The government planned to improve the ICT and innovative infrastructure to make Saudi Arabia as a regional tech hub. These policy-making efforts has given rise to the exciting trends such as establishing new cloud regions by various cloud service providers like Google cloud, SAP, Oracle and Alibaba cloud across Saudi Arabia, introduction of incentives to encourage cloud service providers to invest and to establish Saudi Arabia as an operational hub, Ministry of Communications and Information Technology (MCIT) launched data center strategic plan to build a network of data centres at a large scale and aimed to attract USD 18 Billion of investment by 2030 across Saudi Arabia.

Growing implementation of cloud computing across different industries is surging the demand for cloud computing in the country. The Saudi Arabian Monetary Authority is working with local banks and other stakeholders to implement an integrated payment strategy, which aims to increase electronic transactions to around 30% of total transactions by 2021. Cloud service provider companies are rapidly increasing their offerings in the Kingdom of Saudi Arabia. For instance, in 2020, Saudi Aramco Development Co., a subsidiary of Aramco, has collaborated with Google Cloud to offer cloud services to customers in Saudi Arabia. This is expected to encourage various industries to implement cloud services.

In February 2023, Saudi Arabia announced investment worth of whopping USD 9 billion in future technologies at Leap23. Microsoft, Oracle, Huawei and Zoom plan to make the major investments in Saudi Arabia to support and accelerate future technologies, digital entrepreneurship, tech start-ups and to promote Saudi Arabia as the largest digital market in MENA. Microsoft announced investment of USD 2.1 billion in global super-scaler cloud in the Kingdom, followed by Oracle to invest USD 1.5 billion to expand its business in MENA region by launching new cloud areas in KSA, Huawei also plans to invest USD 400 million in cloud infrastructure for its services in KSA and Zoom launching a cloud area in KSA in collaboration with Saudi Aramco. All these investments and developments are expected to propel Saudi Cloud Computing market in the forecast years.

Restraint in the Saudi Arabia Cloud Computing Market

There are various security issues involved with cloud computing, which can place data in danger and make it vulnerable to attacks. The danger of cyber criminals entry increases with the increase in the number of people and devices having access to the cloud.

Service Model – Segment Analysis

Based on service model, Software as a service (SaaS) dominated the market and is expected to retain its market position during the forecast period. The overall growth of the SaaS will continue to remain consistent during the forecast period as more companies continue to adopt SaaS solutions for different business functions such as customer relationship management (CRP), ERP, Marketing Automation, Financial Accounting, Project Management, Business Intelligence among others. Some of the key players operating in the enterprise SaaS market include Microsoft, Salesforce, Adobe, SAP, IBM among others. The demand for subscription-based pricing model further encouraged such companies to rapidly migrate their software solution to a SaaS model.

Deployment Model – Segment Analysis

Based on the deployment model, the hybrid cloud segment is expected to witness a faster growth during the forecast period. One of the major factors helping the growth hybrid cloud market is that it provides businesses with wider flexibility by shifting workloads between cloud solutions as needs and costs fluctuate. Hybrid cloud is a service offering that combines a private cloud with one or more public cloud services with proprietary software enabling communication between each distinct service. Hybrid cloud services provides businesses with better control over their data. For instance, an organization can store their sensitive data on private cloud and simultaneously leverage the wider computational resources of a managed public cloud.

Key Developments:

• • In 2023, Oracle planned to expand its cloud infrastructure capabilities by opening new cloud services in the Riyadh, Saudi Arabia. The company planned to invest USD 1.5 Billion for new public cloud region and to increase the capacity of existing Oracle cloud in Jeddah region. Through this expansion, Oracle planned to strengthen its position  by operating 6  cloud regions across Middle East.
  • In 2023, Zoho Corporation, an Indian software company, planned to boost investment of USD 30 Million to support small and medium enterprises to advance technology across Saudi Arabia. Through this investment, company planned to open its technology firm in the Riyadh Region.
  • In 2022, Huawei set to finalize a location for its new data center in Saudi Arabia, the addition of new data center in Saudi Arabia will be its second in the region following Abu Dhabi.
  • In 2020, Oracle announced the general availability of its Cloud Region in Saudi Arabia. This aims to provide partners and customers with access to all Oracle Cloud Services, which include Oracle Autonomous Database and Oracle Autonomous Linux, along with Oracle Cloud Applications to unlock innovation and drive the business growth.
  • In 2020, Alibaba Cloud announced its collaboration with the state-owned Saudi Telecom Company (STC) to provide high-performance public cloud services in the Kingdom. This collaboration is a significant milestone for STC to contribute to the Saudi Arabia’s Vision 2030 by introducing a trusted cloud service partner.

Segments covered in the Report:

The Saudi Arabia Cloud Computing market is segmented into service model, deployment model, organization size and industry vertical. Based on the service model, the market has been segmented into Infrastructure as a Service, Platform as a Service, Software as a Service. Based on the deployment model, the market has been segmented into Public Cloud, Private Cloud and Hybrid Cloud. Based on the organization size, the market has been segmented into Small and Medium Enterprises and Large Enterprises. Based on industry vertical, the market has been segmented into Manufacturing, Healthcare and Life Sciences, IT & Telecom, Retail and Consumer Goods, Energy and Utilities, Media and Entertainment, BFSI, Government and Public Sector.

Market Segmentation

Saudi Arabia Cloud Computing Market by Service Model

• • Infrastructure as a Service
  • Platform as a Service
  • Software as a Service

Saudi Arabia Cloud Computing Market by Deployment Model

• • Public Cloud
  • Private Cloud
  • Hybrid Cloud

Saudi Arabia Cloud Computing Market by Organisation Size

• • Small and Medium Enterprises
  • Large Enterprises

Saudi Arabia Cloud Computing Market by Industry Vertical

• • Manufacturing
  • Healthcare and Life Sciences
  • IT & Telecom
  • Retail and Consumer Goods
  • Energy and Utilities
  • Media and Entertainment
  • BFSI
  • Government and Public Sector
  • Others