Saudi Arabia consolidates as one of the world capitals of cloud computingat least according to the investments of the technological giant Oracle in this country located in the Middle East region.
The American company has just announced an investment of 1,500 million dollars for the creation of the third cloud computing center in the country before the high demand.
This will be located in the capital, in what is known as Riyadh Cloud Region. Oracle opened its first center in July 2020, in Jeddah. And in 2021 he announced that he would open a second one in the next futuristic city of Neom, although this time without specifying deadlines.
“Saudi Arabia is undoubtedly leading the way when it comes to adopting the latest emerging cloud-driven technologies to accelerate its digital economy and diversify beyond its rich oil and natural resources,” said Nick Redshaw, Senior Vice President from Oracle for technology cloud in the Middle East and Africa to news outlet The National, adding: “Our investment is aimed at helping achieve these goals by directly increasing cloud capacity in the kingdom and helping meet the growing demand for Oracle Cloud”.
Saudi Arabia, whose GDP grew by 8.7% in 2022 according to official figures, expects the public cloud spending exceeds $3 billion by 2026growing at an interannual rate of 26.8% according to the International Data Corporation.
This Oracle investment is part of a agreement signed by the Kingdom’s Ministry of Communications and Information Technology, and Oracle during CEO Safra Catz’s visit to Riyadh last year. “Oracle’s decision to expand its cloud computing capacity in the kingdom will play a key role in unlocking the opportunities that rapid technological advances are creating,” said Khalid Al-Falih, Saudi Arabia’s Minister of Investment.
Oracle’s local clients in the country include Saudi Railways, Neom, the Saudi Arabia Tourism Development Fund and the Saudi Arabia Mining Company. For companies like these, moving to a cloud system hosted by a specialized company, such as Oracle, Amazon Web Services or SAP, is cheaper than creating your own infrastructure of servers, hardware and security networks. In the cloud, companies pay only for those selective services or resources that they use over a period of time.
Oracle’s good time
Last December, Oracle reported second-quarter revenues up 18% to $12.3 billion. The cloud services and license support revenue increased 14% annually to about $8.6 millionrepresenting more than 70% of total sales.
“With Saudi Arabia set to be the world’s fastest growing economy by 2023, the opportunity it presents is unprecedented,” said Jyoti Lalchandani, group vice president and regional managing director for the Middle East, Turkey, and Africa at IDC. “Technology spending in the kingdom is poised for strong growth. This growth will be driven primarily by the acceleration of digital transformation, with cloud computing, among other technologies, facilitating large-scale innovation and transformation across all industries and economic sectors.”