The state of the cloud in the Middle East [2024]

Cloud resources are unevenly distributed globally – so how are things in the Middle East? Get all the details.

The cloud is transforming businesses across the world. But like all resources, it's not evenly distributed. Some parts of the world have seen a huge uptake. Others lag behind, dogged by issues with infrastructure and investment.

The picture in the Middle East is mixed, as you'd expect from a region that covers 2.8 million square miles and 18 countries with a total population of 371 million.

Fine-grained analysis will show that cloud adoption in Egypt, for instance, is higher than in Bahrain. Nevertheless, the overall trend is one of accelerated growth. Businesses across the Middle East are embracing the cloud and major global players are investing in the region more and more.

But before we take a closer look at the state of the cloud in the Middle East, let's define our terms. In this context, what do we mean by "the cloud"?

What kinds of clouds are being adopted?

To the layperson, "the cloud" might mean the place where you back up your photos. But it's a much bigger term that covers the virtualisation of software, infrastructure, platforms and more.

At the time of writing, single-cloud environments are on the wane. Most businesses are investing in either hybrid or multi-cloud environments. This is partly because a patchwork can be more cost-effective than a seamless tapestry. Secondly, it can have benefits for cyber security: if one provider goes down, another can leap into action without any interruption to your workflow.

On top of this, there's a global uptick in artificial intelligence (AI) and machine learning (ML). Cloud-based AI and ML are now a key part of business intelligence and automated data analysis across the world – and the Middle East is no exception.

This is partly down to increased investment from global players like Microsoft, Amazon, IBM and Alibaba Cloud, all of which have opened data centres in the region.

Why is adoption slower than elsewhere?

In recent years, the Middle East has been shown to be a region with huge potential for cloud computing investment. McKinsey, for instance, analysed its potential for public cloud adoption and concluded that it could generate a whopping $183 billion by 2030.

However, adoption has been slower than in other parts of the world. There are, McKinsey claims, three main reasons for this.

The first has to do with infrastructure. Despite its ethereal-sounding name, the cloud depends on tonnes of racks, servers and cables in large data centres – and those in turn depend on high-quality internet.

The picture is mixed in the Middle East – but some of its constituent countries have poor connectivity and not enough (or not-big-enough) data centres. Without improvements in this area, growth is likely to lag behind other regions.

Secondly, there are issues surrounding compliance. Many businesses are unclear about where data can be stored and how to practice good data governance.

Finally, many countries in the Middle East have relatively small populations and relatively contained economies. Both of these characteristics have limited the scale of external investment.

However, the region has its success stories. Perhaps the most impressive is the Kingdom of Saudi Arabia.

The case of Saudi Arabia

In Saudi Arabia, cloud computing saw a huge spike in 2023 – a 40% year-on-year increase in the year's last quarter. The government's Ministry of Commerce reported that it issued 1,759 cloud computing permits in this period.

2023 also saw Google opening its first cloud region in Saudi Arabia. Oracle, too, has announced that it will invest $1.5 billion to kick-start the kingdom's cloud capacity.   

This is all part of Crown Prince Mohammed bin Salman's "Saudi Vision 2030" programme. Its aim is to wean the Saudi economy off its dependency on oil revenue, partly through investment in technology.  

Investment from international cloud service providers

International cloud service providers are investing in the Middle East more and more. As this increases, we're likely to see an increase in both businesses and public sector organisations migrating to the cloud.

In 2019, AWS entered the scene by opening up a cloud centre in Bahrain. In the same year, Microsoft weighed its anchor in the United Arab Emirates. Within three years, AWS had extended into the UAE and Microsoft had opened data centres in Qatar. And, as we've seen, Google and Oracle are both making headway in Saudi Arabia.

All of these investments in infrastructure are likely to translate into greater, and faster, adoption of cloud technologies. But it will be interesting to see precisely how the market changes over the coming years.

The case of Iran

Cloud computing in Iran is affected in part by US trade sanctions. This has led the country's government to look for investment opportunities elsewhere. Chinese company Huawei and Russia's Yandex have both shown an interest in investing in Iran's cloud technology.

The government is hopeful, with one report claiming that "the country's digital economy is projected to grow at an annual rate of 35% and reach a value of $100 billion by 2025".

What's next for cloud computing in the Middle East?

The future is always shrouded in mist, and we're no Nostradamus. But given the recent increase in cloud adoption and the interventions of major global players, it seems likely that the Middle East will continue to expand its cloud provisions.

One analyst reports that "68% of Middle East companies [are] planning to migrate a majority of their operations to the cloud by 2025". This could well usher in a period of accelerated growth.

Whatever happens, we'll make sure to keep you in the loop every step of the way.

Are you looking for help to move to the cloud? Look no further. At Ascend Cloud Solutions, we've managed more than 400 migrations and counting. Whatever the nature of your migration project, get in touch today for a free, no-obligation consultation.