Riyadh Emerges as the Cloud Capital of the Middle East as Saudi Arabia’s Market Reaches USD 55.4 Billion by 2032

Saudi Arabia’s cloud computing market is on a remarkable growth trajectory, projected to reach USD 55.4 billion by 2032, advancing at a CAGR of 15.6% from 2026 to 2032. The market, valued at USD 20.1 billion in 2025, is being propelled by the Saudi Vision 2030 digital transformation agenda, the Cloud First Policy, and major investments in smart city megaprojects such as NEOM.

Download free Report Sample Now

With 97% of government services digitized under the National Transformation Program, the Kingdom is creating unprecedented demand for scalable cloud infrastructure across both public and private sectors. Between 2018 and 2024, the government invested USD 24.8 billion to enhance internet connectivity, enabling 99% population access to high-speed internet—a key catalyst for widespread cloud adoption among enterprises of all sizes.

The Cloud Computing Special Economic Zone (SEZ) in Riyadh is expected to account for 30% of total ICT spending by 2030, cementing Saudi Arabia’s position as a regional cloud hub. Reinforcing this commitment, the government has pledged an annual USD 2.5 billion budget allocation for public cloud services by 2026, underlining its ambition to modernize digital infrastructure across all sectors.

Enterprise Digital Transformation Accelerates Cloud Adoption

Businesses across Saudi Arabia are embracing cloud technologies to enhance agility, scalability, and operational efficiency. Cloud migration is enabling organizations to integrate AI, machine learning (ML), and big data analytics without heavy upfront infrastructure costs.

In the first half of 2024, 127 international companies established operations in the Kingdom — a 477% year-over-year increase — with many choosing Saudi Arabia as their regional headquarters. This influx of global enterprises is driving demand for enterprise-grade cloud services that meet local compliance and performance standards.

Vision 2030 and Smart City Megaprojects Power Market Expansion

As Saudi Arabia diversifies its economy beyond oil, cloud computing lies at the heart of its Vision 2030 agenda, enabling e-governance, smart cities, and digital healthcare ecosystems.

Under the Cloud First Policy, government entities are required to prioritize cloud-based solutions. This initiative has already yielded USD 1.33 billion (SAR 5 billion) in savings through the DEEM government cloud program, according to the Saudi Data and Artificial Intelligence Authority (SDAIA).

The establishment of the Riyadh SEZ is further strengthening the local ecosystem, providing access to world-class infrastructure, cutting-edge technology, and a skilled digital workforce. Global cloud giants such as AWS, Microsoft Azure, Google Cloud, Oracle, and Alibaba Cloud have launched or announced local data centers, ensuring data sovereignty and regulatory compliance within the Kingdom.

Smart city initiatives including NEOM and the Red Sea Project are driving massive demand for real-time data processing, IoT integration, and advanced analytics — all powered by robust cloud infrastructure. These initiatives are redefining urban planning, intelligent transport, and citizen engagement through data-driven innovation.

Market Segmentation Highlights

• Service Type:
• Infrastructure as a Service (IaaS) – Largest segment (30% share, 2025)
• Software as a Service (SaaS) – Fastest-growing segment (CAGR 15%+)
• Platform as a Service (PaaS)
• Deployment Model:
• Public Cloud – Largest (≈70% share)
• Hybrid Cloud – Fastest-growing (CAGR 15.9%)
• Enterprise Size:
• Large Enterprises – 75% share, led by BFSI and telecom sectors
• SMEs – Fastest growth (CAGR 16.0%), driven by pay-as-you-go flexibility
• End Users:
• Government & Public Sector – Largest category, backed by Cloud First Policy
• IT & Telecom – Fastest-growing (CAGR 15.8%)

Regional Insights: Riyadh Leads, Eastern Province Rising

• Riyadh holds the largest market share (45%), supported by government ministries, corporate headquarters, and major data center investments. The Oracle Cloud region and the Cloud Computing SEZ in Riyadh are driving innovation and attracting international partnerships.
• Eastern Province is the fastest-growing region (CAGR 15.7%), anchored by the energy and industrial sectors. Major infrastructure investments by Microsoft Azure, Google Cloud, and Saudi Aramco’s digital initiatives are accelerating adoption in manufacturing, logistics, and petrochemicals.

Competitive Landscape

The Saudi cloud market is moderately fragmented, with a mix of global hyperscalers and strong regional players. AWS, Microsoft, and Google Cloud lead the market with extensive service portfolios and strategic partnerships. Oracle and Alibaba Cloud continue to expand regional data centers, while STC Cloud and other local providers are strengthening the ecosystem with localized solutions and Arabic-language support.

Strategic collaborations with universities and training institutions are addressing cloud talent development, ensuring a sustainable pipeline of skilled professionals to support the nation’s digital economy.

Recent Strategic Developments

• May 2025: AWS and HUMAIN announce a USD 5 billion AI Zone investment to empower Saudi entrepreneurs.
• May 2025: LTIMindtree and Aramco Digital launch NextEra, an AI- and cloud-focused IT services firm.
• Feb 2025: Accenture partners with Google Cloud to expand generative AI solutions in Saudi Arabia.
• Feb 2025: SAP SE brings its Business Technology Platform to Google Cloud Saudi Arabia, enhancing compliance options.
• Dec 2024: Microsoft completes construction of three Azure availability zones in the Eastern Province.
• Aug 2024: Oracle launches its second Saudi cloud region; Google unveils new AI and data sovereignty capabilities in Dammam.