Oracle looks to investing US$1.5bn to build its cloud footprint in Saudi Arabia

As Oracle plans to build up its cloud footprint in Saudi Arabia and open its third public cloud region in Riyadh, Oracle Corp is looking to invest US$1.5 billion in the kingdom in the coming years.

Increased demand for cloud computing has pushed technology companies such as Oracle, Microsoft Corp, Amazon.com Inc and Alphabet Inc’s Google to come up with data centers across the world to speed up data transfer. Saudi officials have requested international companies to invest in the kingdom and move their regional headquarters to Riyadh to benefit from government contracts.

“We are finalizing the plans for opening the Riyadh region. We are still working with our suppliers before we can announce the actual date,” Oracle senior vice president Nick Redshaw said.

“The investment would be made over several years,” Redshaw said, while adding that Oracle would also expand the capacity of its cloud region in Jeddah, which the company opened in 2020.

Although Oracle lags behind its bigger rivals in the cloud computing race, it was among the first large tech companies to open a data center in Saudi Arabia. The company made the announcement as global tech companies gathered for a major tech conference in the Saudi capital.

The kingdom has devoted hundreds of billions of US dollars toward an economic transformation, known as Vision 2030, led by Saudi Crown Prince Mohammed bin Salman.

While Oracle has been working with the government, Saudi Arabia has been trying to encourage foreign firms to set up headquarters in the country or risk losing out on government contracts. Interestingly these deals would be available only until the end of this year.

“We are working closely with the Saudi government to finalize plans for that regional headquarters requirement, and we will announce them as we finalize that with them,” Redshaw said.

Oracle has also won contracts from the crown prince’s US$500 billion flagship NEOM project, a futuristic megacity and economic zone that is being built on the Red Sea coast. NEOM is one of Oracle’s largest consumers of cloud capability in Saudi Arabia, Redshaw said.