Can Saudi Arabia attract $18 billion to fulfil its data centre hub ambitions?

The Saudi Arabian Ministry of Communications and Information Technology (MCIT) has launched a plan to build a network of large-scale data centres across the kingdom. The aim is to attract $18 billion worth of investment by 2030 as part of a drive to transform Saudi Arabia into the main data centre hub for the region.

A report in the Arab News suggests the kingdom is working closely with the private sector, including local and international investors, to achieve this goal.

Bassam Al-Bassam, deputy minister for telecom and digital infrastructure at the MCIT, has been quoted as suggesting that what are called ‘local champions’ will play a role in the coming phase of Saudi Vision 2030 to increase the growth of hyper-scale co-location capacity data centres needed to attract other digital investors.

These investors include cloud service providers, gaming publishers, video streaming service operators and content delivery network operators , which, it is hoped, will localize their services inside the Kingdom.

Saudi Vision 2030 is a strategic framework to reduce dependence on oil and diversify the economy.

Gulf Data Hub, Al Moammar Information Systems (MIS), and Saudi FAS Holding Co are among the first key investment partners, but any players willing to invest in Saudi Arabia and localize content and services, including major names like Amazon and Google, are being invited to join discussions. 

There is already a fair amount of noteworthy data centre activity in Saudi Arabia. For example, plans have been announced by MIS to develop six data centres across the Kingdom, the first of which should be operational by the fourth quarter of 2022. In addition operator STC announced in December the launch of three mega data centres in Riyadh, Jeddah and Madinah, with plans for four more.

Among the many drivers for data centre development in the kingdom have been the surge in demand for video streaming services and, inevitably, increased pressure on companies to digitise their processes and embrace cloud-based services as a consequence of the ongoing coronavirus pandemic.

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