McKinsey & Company posits that Middle Eastern companies investing in the public cloud could generate billions of dollars in revenue. An analysis conducted by McKinsey, examining cloud use cases applied to the public sector and over 600 companies, suggests that up to $183 billion could be generated by 2030.
According to a news article by McKinsey & Company, this $183 billion figure is equivalent to 6 percent of the region's GDP as of 2024. The adoption of digital cloud technology has been slower in Middle Eastern countries due to many economies being small and relatively concentrated. Governments in the region have been working towards changing this scenario by discussing the benefits of cloud technology with local companies. External investors such as Amazon Web Services and Microsoft have begun investing in the region. By 2030, it is anticipated that five major international cloud service providers will be operating in Saudi Arabia, offering data center capacity of up to 1,300 megawatts.
The analysis further concludes that the most significant source of value creation from implementing cloud technology in the Middle East lies in its potential to accelerate product development and scaling. This capability accounts for nearly 73 percent of the predicted value generated through companies by 2030 and about 71 percent of the value expected to be generated through the public sector. Cloud services can also help reduce technology development costs while increasing market resiliency. They provide access to cutting-edge technological and digitalization solutions for companies, which can enhance productivity.
The burgeoning AI industry also holds promise for investment potential in the Middle East. Generative AI can significantly increase return on investment for cloud programs by unlocking new business use cases, enhancing application development productivity, and reducing time and cost associated with application migration. The analysis predicts that reducing application migration time could result in up to a 40 percent reduction in costs.
