Oracle's cloud region in Neom to be online 'soon' amid Saudi Arabia's digital push

Company's expansion in Middle East highlights role of cloud in spurring economic growth in era of digitalisation, says CIO

The adoption of cloud technology is growing in the Middle East amid the rise of technology-focused consumers. Chris Whiteoak / The National
Powered by automated translation

Oracle's cloud region in Saudi Arabia's futuristic megacity Neom will go live "soon", the chief information officer of the US technology major has said.

The infrastructure is expected to further boost the status of the Middle East as a technology hub and support its economic growth.

The Neom cloud region, originally announced in October 2021, is part of the Texas-based company's intensified push into the region which emphasises the role of the cloud in spurring economic growth in the era of digitalisation, Jae Evans told The National in an interview.

"The cloud enables organisations in all industries to grow and innovate. With it, there's the constant flow of latest technologies making its expansion into countries and territories that weren't available before," she said.

The technology makes it "easier for businesses and lowers the barrier of entry for global investment. These are the kinds of trends that we see and the reason why there's an increase in demand for it".

Ms Evans described Oracle's aggressive cloud expansion in the Middle East as the "fastest" by any major provider, but declined to specify the amount of investment earmarked for the region.

She spoke about the recent $1.5 billion commitment Oracle made to the kingdom during the Leap technology conference in Riyadh in February.

The announcement is part of a broader partnership signed by the kingdom’s Ministry of Communications and Information Technology and Oracle during the visit of chief executive Safra Catz to the Saudi capital last year.

Saudi Arabia, the Arab world's largest economy, welcomed Oracle's first Middle East cloud region in 2020 when it opened in Jeddah. Another cloud region, located in Riyadh, was also announced at Leap.

"A lot of investment is being made, as you can see with the amount of regions that we're building, and we are having a lot of different discussions. That gives you a sense of the trend of growth that we're doing," she said.

The adoption of cloud technology is growing in the Middle East amid the rise of technology-focused young consumers and an evolving digital landscape, underpinned by government efforts to develop the future economy.

This has given global cloud providers incentive to tap into the potential being offered by the region, most notably Saudi Arabia and the UAE, the Arab world's two largest economies.

In September last year, Oracle opened a technology collaboration centre in Abu Dhabi aimed at helping public and private sector organisations leverage the use of emerging technology to boost their bottom lines.

This month, it announced a partnership with Mubadala Health, a unit of Abu Dhabi's sovereign wealth fund, to optimise its electronic health records system.

The deal adds to a list of prominent Oracle customers in the region, including Abu Dhabi Customs, Dubai-based logistics major DP World, conglomerate AW Rostamani and Emirates Post.

The cloud allows organisations to "integrate their core business processes to drive operational efficiency, support, remote workforce and scale services", Ms Evans said.

Apart from Oracle, global majors including Microsoft, Amazon, IBM and Alibaba Cloud have all opened cloud and data centres in the Middle East.

Oracle does not provide market share figures. Data from industry publication Technology Magazine shows that, as of 2023, the company has a global market share of 2 per cent, making it rank in the seventh place.

Amazon Web Services has the biggest market share with 34 per cent, followed by Microsoft Azure with 21 per cent and Google Cloud with 11 per cent, it said.

Cloud technology is also a key driver of Oracle's business: in its fiscal third quarter ended February, overall cloud revenue grew 45 per cent annually to $4.1 billion, with its infrastructure-as-a-service segment alone surging 55 per cent to $1.2 billion, the company reported last month.

Meanwhile, global end-user spending on public cloud services is projected to grow nearly 22 per cent to $597.3 billion in 2023, from $491 billion last year, a study this month from Gartner showed.

Quote
The cloud enables organisations in all industries to grow and innovate. With it, there's the constant flow of latest technologies making its expansion into countries and territories that weren't available before
Jae Evans, chief information officer of Oracle

“Organisations today view cloud as a highly strategic platform for digital transformation," said Sid Nag, a vice president analyst at Gartner.

Oracle will have eight active cloud regions in the Middle East and Africa once those in Neom and Riyadh, and another in Israel, go online ― joining the two in the UAE, as well as one each in Jeddah, Jerusalem and South Africa.

The Dubai and Abu Dhabi regions started operations in September 2020 and November 2021, respectively.

The Middle East accounts for about a fifth of the company's 41 public cloud regions across 22 countries.

"There isn't an industry that I see that doesn't benefit from the cloud, whether it's in the public or private sector, running very important mission critical workloads for their operations," Ms Evans said.

Updated: May 02, 2023, 3:00 PM