Cloud services market in Saudi Arabia seen to reach $1.3 bln in 2023: PwC official

The cloud services market in Saudi Arabia is expected to reach approximately $1.3 billion (IDC) this year, Rajat Chowdhary, PwC's Middle East Partner in Technology Consulting, told Argaam on the sidelines of LEAP 2023 Conference in Riyadh.

He also expects the programming sector to retain the largest share of the cloud services market, followed by infrastructure as a service (IaaS) and platform as a service (PaaS).

The cloud services market will grow at a compound annual growth rate (CAGR) of 25% to nearly $2.4 billion in 2026, with the IaaS and PaaS sectors likely to record the highest growth as a result of recent investments announced by development companies in the region.

"Globally, the cloud market is extraordinary. It has sustained a double-digit growth for over a decade now," Chowdhary said, expecting revenue in the public cloud market to surpass $0.5 trillion this year and to double to $1 trillion by 2026.

"Interestingly, more than half the revenue will be generated in the US ($260 billion), where we have seen our colleagues in the PwC US practice experience tremendous growth these last few years," he noted.

The Saudi cloud market is still in the early stages of its journey compared to the global market. This will continue to boost the Saudi market's performance.

Furthermore, the Ministry of Communications and Information Technology (MCIT) launched a plan to build a network of large-scale data centers across the Kingdom to increase the growth of hyper-scale data centers and attract digital investments and cloud service providers to localize their services in the Kingdom.

The Communications, Space and Technology Commission (CITC), which is the body responsible for regulating the data classification and cloud computing regulatory framework, categorized the cloud service providers in the Kingdom to determine what services can be provided by each communication services provider to further strengthen the regulatory and policy environment and providing transparency, which will only help drive cloud adoption in the Kingdom.

Local companies dominate nearly 80% of the 25-CITC licensed firms, Chowdhary said, expecting that global companies will continue to strengthen their position in the Saudi market as they launch new cloud regions in the Kingdom.