The MEA cloud infrastructure services market size was valued at USD 2.57 billion in 2017 and it is anticipated to expand at a CAGR of 28.7 % during the forecast years. The growth can be attributed to rising investments by the regional governments and private firms in upcoming technologies. Moreover, increasing awareness among Small and Medium-sized Enterprises (SMEs) for cloud technology is fueling demand for this market.
Cloud infrastructure services enable rapid business deployment and help manage business and expenses in cost-effective ways. The cloud revolution has attracted many large organizations, as well as SMEs, to move from conventional on-premise deployment to cloud deployment in order to amplify cost-saving and protect digital assets.
Tier 1 companies have identified the Middle East as one of the most lucrative target regions, owing to high economic strength and demand for digitization. For instance, in March 2018, Microsoft Corporation announced its plans to open data centers in Abu Dhabi and Dubai, with expected cloud computing site availability by 2019. The company is aiming to provide a local data centers to withstand the overwhelming demand for cloud technology in the region. Similarly, Amazon Web Services (AWS) has announced the opening of its data center in Bahrain by Early 2019.
There is a strong correlation between MEA countries’ GDP and technological adoption. The MEA region is anticipated to have more than 160 million potential technology users, which is expected to contribute approximately 3.8% of the regional GDP or around USD 95 billion in revenue. Middle Eastern countries, such as the UAE and the Kingdom of Saudi Arabia (KSA), are trying to reduce their dependency on the oil industry for economic development. With their visionary plans, such as the UAE’s Vision 2021 and KSA’s Vision 2030, in progress, they have shifted the focus toward developing their respective nations as a knowledge-based economies.
Countries in the Middle East region are investing heavily in digital technologies in order to digitalize their economy. For instance, the UAE government has started technology investment projects, such as ‘Smart Dubai’ and ‘Smart Abu Dhabi’, for enhancing public-private partnerships in the technology sector. These initiatives combined with various e-government programs are expected to digitally transform the country and offer better services to users in the private and public sectors. Similarly, the government of KSA is investing substantial funds to digitalize healthcare and other sectors under its ‘National Transformation Program.’
The MEA cloud infrastructure services market can be segmented on the basis of service type into Platform as a Service (PaaS), Infrastructure as a Service (IaaS), Content Delivery Network/Application Delivery Network (CDN/ADN), Managed Hosting, Colocation, and Disaster Recovery as a Service (DRaaS). The PaaS segment led the market in 2017; however, the DRaaS segment is anticipated to expand at the highest CAGR of 31.9% from 2018 to 2025.
PaaS offers greater productivity by offering reduced application development time and need for IT expertise, easy deployment, and high scalability and agility. The growing PaaS market is expected to boost the demand for IaaS as both of these are interrelated. The demand for DRaaS is anticipated to grow steadily over the forecast period owing to increasing awareness of IT asset security among SMEs and large organizations.
On the basis of organization, the market can be segmented into Small and Medium Enterprises (SMEs) and large organizations. The SME segment accounted for 24.8% market share in 2017. The cloud computing sector is attracting SMEs by offering scalable infrastructure and services. It offers on-demand self-service, broad network access, resource pooling, rapid elasticity in terms of cost and time, transparency in the form of usage reports and timely updating consumption rate, and cost updates to customers. It not only helps deploy business quickly but also reduces operational costs considerably.
Data security and recovery is an essential concerns of large organizations. These organizations require reliable and secure services, thus they prefer to deploy data on a private cloud. Furthermore, the companies are utilizing big data analytics for providing the best services to their customers. The cloud services assist in optimizing the business processes for both SMEs, as well as large organizations.
The market can be segmented on the basis of deployment into the public, private, and hybrid clouds. The public segment accounted for USD 1.65 billion in 2017, as it was widely used by SMEs and other businesses owing to its lower cost compared to the traditional data center and private clouds. It also offers better user flexibility by providing payments per usage.
The private cloud is a choice of deployment among large organizations, as it offers similar functionality to that of a public cloud and also delivers additional security for IT assets and financial data. The demand for hybrid cloud is expected to expand at a CAGR of 30.9% over the forecast period. The hybrid cloud offers dual usability of the public, as well as private cloud, and it is the most economical solution for most organizations considering the benefits it provides.
The KSA emerged as the largest regional market in 2017. The country is characterized by the presence of all major companies and it is one of the fastest-developing nations in the MEA region. Its ‘National Transformation Program’ is aimed at digitizing the government processes to enhance service offerings to the public, as well as private sectors.
The United Arab Emirates accounted for 27% market share in 2017. The country has the most technologically advanced cities, such as Dubai and Abu Dhabi, and is also driven by the significant Foreign Direct Investments (FDI) in the technology sector. Qatar is aiming to digitalize its government processes by 2020 and is also focusing on the development of the ICT industry and digital infrastructure.
The market is highly competitive. Key players including AWS; Microsoft Corporation; Google, Inc.; and IBM led the market while accounting for over 65% of the total revenue in 2017. The local companies also offer stiff competition to the prominent global players.
However, large enterprises prefer to avail services from top global companies for better reliability and data security. Leading companies operating in this market are focused on introducing innovative services to help customers in growing business and reducing operational costs.
Base year for estimation
Actual estimates/Historical data
2015 - 2016
2018 - 2025
Revenue in USD Billion and CAGR from 2018 to 2025
Middle East & Africa
Kingdom of Saudi Arabia, United Arab Emirates, Qatar
Revenue forecast, company share, competitive landscape, growth factors and trends
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This report forecasts revenue growth at country level and provides an analysis on the latest industry trends in each of the sub-segments from 2015 to 2025. For the purpose of this study, Grand View Research has segmented the MEA cloud infrastructure services market report on the basis of service, deployment, organization, and country:
Service Outlook (Revenue, USD Billion, 2015 - 2025)
Deployment Outlook (Revenue, USD Billion, 2015 - 2025)
Organization Outlook (Revenue, USD Billion, 2015 - 2025)
Country Outlook (Revenue, USD Billion, 2015 - 2025)
Kingdom of Saudi Arabia
United Arab Emirates
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