This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 11/5/2018

Overview

With over 27 million consumers and a sizable number of global enterprises, Saudi Arabia is the largest Information and Communications Technology (ICT) market by far in the Middle East.  The Saudi Arabian telecommunications and information technology industries represent over 55 percent and 51 percent, respectively, of the total Middle East market.  Yet, while many of the world’s ICT markets are maturing, the Saudi Arabian market remains substantially under-developed by global standards and remains on a rapid growth trajectory.

Saudi Arabia is embarking on a significant ICT investment program that will make the Kingdom a regional technology powerhouse.  Saudi Arabia’s digital transformation continues to burgeon with reports showing that the Kingdom’s ICT spend grew six percent in 2017 to over USD 36 billion and is predicted to expand further this year to reach the value of USD 40 billion.  This growth is led by Government, Telecom, Finance and Oil/Gas sectors.  Aggressive IT projects to modernize the Saudi Arabian Government’s (SAG) IT infrastructure including an e-government initiative and the liberalization of the telecom industry are increasing competition, service levels, and usage.  Numerous Saudi Arabian IT industries show clear signs of rapid growth, driven by the committed presence of major multinationals, and by the expanding skills and confidence of local companies.

The size of the Saudi Arabian ICT market provides excellent operational scale, as well as the advantages of locating in a technology hub catering to over 350 million Arabic speakers in the region.  Because Saudi society is young and growing rapidly, its consumer market is weighted heavily towards technologically-literate early adopters.  Arabization (digital content, software) activities enjoy strong growth prospects due to this large emerging market and the increasing supply of qualified software engineers coming available due to public and private training initiatives.

Rising personal wealth and the growing number of experts with unprecedented commitment to achieving leadership in connectivity and information technology are major drivers of Saudi ICT growth.  Saudi Arabia has embarked on a twenty-year ICT plan that will support widespread technology and telecommunications adoption across its households and enterprises.  A combination of deregulation and substantial public investments will create attractive investment opportunities for the private sector.
 
(Total Market Size = (Total Local Production + Imports) - Exports)

 

 

2015

2016

2017 Estimates

Market size = Imports from the US

4

5

6

Local Production

N/A

N/A

N/A

Total Exports

N/A

N/A

N/A

Total Imports

20

23

33

Total Market Size

25

28

30

Exchange Rate: 1USD

3.753.753.75


Leading Sub-Sectors

Cyber Security

Increasing cyber-attacks have spurred the SAG to launch significant initiatives to combat cyber security crimes. These efforts are led by a specialized intra-government committee consisting of members from the Saudi Information Technology Company (SITCO), Communications and Information Technology Commission (CITC), Ministry of Interior (MOI), King Abdul Aziz City for Science and Technology (KACST).  In October 2017, the SAG established the Saudi Cyber Security Authority.  SAG spending on these initiatives is expected to reach USD487.4 million in 2018.
 

IT Services Sector

The Saudi IT services market is growing rapidly due to the large-scale, infrastructure-driven projects across the government, healthcare, education, and transportation verticals.  Spending will be focused on infrastructure development, e-government initiatives, digitization, and modernization across verticals.  The current transformation of telcos into integrated ICT providers will also drive market maturity and facilitate investments in managed and data center-delivered services.
 

Cloud Computing

While Saudi Arabia is still in the early stages of cloud adoption, an increasing number of IT decision makers are seeking a deeper understanding of how cloud will fit within their organization. However, according to a recent report by IDC, although cloud continues to generate a tremendous amount of attention, primarily due to the benefits it offers in terms of operational efficiency and cost savings, only a handful of providers in the Kingdom currently offer cloud services.

Spending on cloud services in the Kingdom is expected to exceed USD 138 billion in 2018, according to the latest figures from market advisory firm IDC.

While this increase is from a low base, IDC said that its projections pointed to a greater acceptance of cloud technologies within the Kingdom, despite an inherent desire among Saudi organizations to retain full control over their IT functions.   According to a United Nations survey, Saudi Arabia is ranked 52 of 193 in the e-government development index. 

 

Opportunities

Saudi Arabia is the region’s largest ICT market with strong growth in consumer and enterprise end markets, which are driven by the following:

  • Deregulation, privatization and WTO accession promoting private-sector opportunities—supported by significant investment incentives

  • Public-private funding partnerships such as KACST’s (King Abdul Aziz City for Science and Technology) R&D co-funding initiatives such as Technia cluster of companies like Technia Defense, Technia Energy and Technia Aviation

  • Public-private partnerships supporting venture capital funding such as recent collaboration between Saudi General Investment Authority (SAGIA) and Intel

  • Strong commitment to e-commerce and e-governance initiatives (including IP protection)

  • Significant unmet demands for web-based and mobile services; increased enterprise and government usage of web-based services provide large-scale opportunities for contractors and service providers

  • Massive public investment in connectivity for Economic Cities provides unique opportunities for green-field projects covering millions of users

  • Public investment in IT knowledge and Internet-based services literacy programs
     

Saudi Arabia’s unique access to energy makes it an attractive location for a range of activities across the ICT value chain. ICT-enabled service providers with vast IT offerings will be able to leverage this access to low-cost power and state-of-the-art communications infrastructure to efficiently service global customers.  Hence the recent activities with Amazon Web Services, Google, and Alibaba.

Meanwhile, software and other content providers enjoy a secure environment for commercialization, thanks to significant progress on intellectual property rights (IPR) laws by the Ministry of Commerce and the CITC.

 

Web Resources

GITEX Technology Week October 2018, Dubai
CES – Las Vegas -- January 5-7, 2019

For more information, contact the following Commercial Specialists at the U.S. Commercial Service in Saudi Arabia:
Tareq Ghazal, U.S. Consulate General Dhahran, Email: Tareq.Ghazal@trade.gov, Tel: +966-13-330-3200, Ext 3147
Ahmed Khayyat, U.S. Embassy Riyadh, Email: ahmed.khayyat@trade.gov, Tel: +966-11-488-3800, Ext 4441

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Saudi Arabia Information and Communication Technology Trade Development and Promotion