KSA Computing Market Outlook to 2028

KSA Computing Market Overview

• The KSA Computing Market is value of USD 1.3 billion, driven primarily by rapid advancements in cloud computing, artificial intelligence (AI), and government initiatives like Vision 2030. The governments focus on building smart cities and enhancing e-governance has fueled demand for advanced computing services and infrastructure. Additionally, the expanding digital economy has encouraged both public and private investments in data centers, cybersecurity solutions, and AI-based technologies.

• Saudi Arabia's computing market is heavily concentrated in major urban centers such as Riyadh, Jeddah, and the Eastern Province. Riyadh stands out as a dominant player due to its role as the countrys political and business capital, housing the majority of large-scale infrastructure projects and government initiatives.
• The Saudi governments Vision 2030 initiative includes a comprehensive digital transformation agenda, which has led to substantial investments in computing infrastructure. In 2023, the government allocated SAR 50 billion for developing digital infrastructure across various sectors.

KSA Computing Market Segmentation

By Component: The market is segmented by component into hardware, software, IT services, and telecommunication services. Hardware accounts for a major share of the computing market due to the countrys increasing demand for robust infrastructure to support digital transformation. Essential hardware includes servers, storage systems, and network equipment that enable the functioning of AI applications, cloud computing, and IoT solutions. In 2023, hardware captured 32% of the market, largely because of ongoing investments in data centers and IT infrastructure.

By End-User Industry: The market is further segmented by end-user industry into BFSI, government and public sector, healthcare, retail, and manufacturing. The banking, financial services, and insurance (BFSI) industry has shown the highest demand for advanced computing solutions, driven by the need for digital transformation, enhanced cybersecurity, and customer service innovations. In 2023, the BFSI sector accounted for 25% of the market share, fueled by increasing digital banking initiatives, online payment services, and AI-based fraud detection solutions.

KSA computing Market Competitive Landscape

The market is dominated by a combination of local players and global tech giants. Several key companies contribute to market growth by providing a wide range of services, including cloud computing, cybersecurity, AI, and enterprise software solutions.

KSA Computing Market Analysis

Market Growth Drivers

• Government Investment in Digital Transformation: The Saudi Arabian government has made substantial investments in its Vision 2030 initiative, which aims to transform the Kingdom into a leading digital economy. The National Transformation Program allocated around SAR 75 billion to digital infrastructure in 2023, driving demand for computing hardware, software, and cloud services. With the government pushing for advanced digital solutions in various sectors, including education, healthcare, and government services, the computing market is experiencing accelerated growth.
• Rising Number of Internet Users: Saudi Arabia saw a rise in internet users, with approximately 33.5 million individuals using the internet in 2023. This surge in internet penetration is fueling demand for computing devices such as personal computers, servers, and cloud computing solutions. As more people access digital services and online platforms, businesses and individuals are driving the demand for better hardware and software, particularly in sectors like e-commerce, online education, and digital entertainment.
• Expanding E-Government Services: In 2024, the Saudi government is expected to introduce additional digital services as part of its e-government strategy. With over 2,800 government services being offered online, there is a rising demand for secure computing solutions to manage the vast amounts of data generated and stored. For instance, the Ministry of Interiors Absher platform, which had over 25 million registered users in 2023, will continue expanding its scope, necessitating investment in robust computing systems, databases, and cybersecurity infrastructure.

Market Challenges

• Cybersecurity Concerns: With the increased use of digital platforms and computing solutions, Saudi Arabia has seen a rise in cyber threats. In 2023, there were over 2.6 million cyberattacks reported in the country, which has prompted businesses to invest heavily in cybersecurity solutions. This increasing focus on security is both a challenge and an opportunity for computing market players, as they must develop secure infrastructure to protect sensitive data while managing costs.
• High Dependence on Imported Technology: Despite efforts to localize the computing industry, Saudi Arabia continues to rely heavily on imported hardware and software solutions. This dependency has exposed the market to global supply chain disruptions, particularly in 2023, when semiconductor shortages delayed the procurement of computing devices and servers.

KSA Computing Market Future Outlook

Over the next five years, the KSA Computing industry is expected to experience growth driven by government-backed digital transformation initiatives, advancements in AI and cloud computing, and rising demand for cybersecurity solutions.

Future Market Opportunities

• Growth of AI-Driven Computing Applications: Artificial Intelligence (AI) will continue to be a key driver in the Saudi computing market through 2028. The governments focus on AI integration, as highlighted in the Vision 2030 roadmap, will result in AI applications becoming mainstream across industries such as healthcare, retail, and finance.
• Expansion of Cloud Services and Hybrid Cloud: Cloud computing will experience exponential growth over the next five years, driven by the increased adoption of hybrid cloud models by both public and private sector entities. By 2028, more than 75% of businesses in Saudi Arabia are expected to operate on hybrid cloud platforms, optimizing their data storage and processing capabilities.