Oracle to invest $1.5 billion in Saudi Arabia to expand cloud capacity

Oracle on Monday said it is planning to invest $1.5 billion in Saudi Arabia to bolster its cloud computing capacity in the Middle East.

The planned investment, which is part of Oracle’s memorandum of understanding with Saudi Arabia Ministry of Communications and Information Technology, will see the public cloud services provider expand its existing cloud region in Jeddah, and open a new one in Riyadh.  

In addition to the Riyadh region, Oracle will work with the ministry to set up a commercial and operational model for another cloud region in Saudi Arabia that complies with Saudi government requirements and local data residency regulations.

The company also plans to set up a separate cloud region in the futuristic city of Neom.

Neom is being built as part of Saudi Vision 2030 program that has been planned to reduce Saudi Arabia’s dependence on oil and diversify its economy. 

Oracle had first announced its intent to open 14 new cloud regions including those in Saudi Arabia in October 2021. Other Middle East regions announced during that time included a new region in Jerusalem and a second region in Abu Dhabi.

With the addition of the Riyadh region, the company will have six cloud regions in the Middle East, Oracle said.

Cloud players bullish on the Middle East

Oracle rivals such as Amazon Web Services, Microsoft and Google Cloud have also been bullish on the Middle East, with each of them rapidly expanding their cloud footprint across the region.

In August last year, AWS had opened its new cloud region in the UAE. The UAE region, which consists of three availability zones, joined the company’s existing cloud region in Bahrain, which was made available in 2019. The Bahrain cloud region is composed of three availability zones and one local region.

AWS also has plans to add a new region in Israel.

Microsoft too made its Qatar cloud region operational in August last year after opening regions in Abu Dhabi and Dubai in 2019. Microsoft is also planning to launch a new cloud region in Israel soon.

Similarly, Google Cloud, has announced plans to launch two regions each with three zones in Dammam, Saudi Arabia, and Doha, Qatar. It already operates one region with three zones in Tel Aviv.