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Cloud computing in the Middle East: The next big tech market?

Hyperscale public cloud services have opened up in the Gulf over the last year, clearing a path for for cloud uptake at a faster pace in the Middle East. Meanwhile, the coronavirus pandemic has sparked an uptick of interest in certain cloud-based technologies and applications.

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New cloud service offerings from major vendors in the Gulf region are driving government-funded public cloud initiatives as well as the adoption of emerging technology by small and medium-size enterprises (SMEs) in the Middle East.

Data centres from major players including Microsoft, Amazon Web Services, Oracle and IBM have cropped up across the Middle East over the past year, adding to the existing cloud presence of Alibaba and SAP. More recently, adding to the mix of cloud offerings, Google Cloud Platform announced in March this year the signing of a strategic collaboration agreement with the Qatar Free Zones Authority (QFZA) to launch their first  region in the Middle East.

This bodes well for economic development in the region since cloud technology, with its cost-efficient processing capabilities and data storage possibilities, is essential to unlock the potential of new technology such as blockchain or artificial intelligence (AI).

Recent regional initiatives such as the government of Bahrain's "cloud-first policy", the ascent of innovative startups, and the willingness of fast-growing SMEs to adopt emerging technology are starting to change the cloud computing landscape in the Middle East.

The outbreak of COVID-19 has also contributed to the rise in spending on cloud computing in the region, according to a recent update from the International Data Corporation (IDC). Public cloud spending in the Middle East, Turkey, and Africa (META) region will increase to $2.8 billion this year and will top $6.5 billion in 2024. This new figure represents a compound annual growth rate (CAGR) or 24 percent, up from IDC's pre-COVID prediction of 22 percent CAGR.

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