King Salman and German Chancellor Witness MoU between Saudi Government and SAP to Launch SAP Cloud Hub in Saudi Arabia

Witnessed by His Majesty King Salman Bin Abdulaziz Al Saud, the Custodian of the Two Holy Mosques, and German Chancellor, Angela Merkel, during her trade mission to the Kingdom, SAP announced a plan to launch the SAP Cloud Hub, in collaboration with the Saudi Ministry of Communication and Information Technology represented by the National Digitization Office, to support the acceleration of Saudi Vision 2030 and meet the Kingdom’s digital transformation goals.

The investment of SAR 285 million will happen over a period of four years, and the SAP Cloud Hub will comprise of four key pillars: the establishment of a public cloud data center in the Kingdom; an open platform for local developers; a co-innovation center to support Saudi startups and customers from both large enterprises and small- and medium-sized enterprises, and further localization of SAP solutions to support Saudi’s economic diversification goals and government investment.

Saudi Vision 2030 and National Transformation Program 2020 call on government agencies to deliver and use more online and mobile technology solutions, especially in the areas of enhancing the citizen experience, talent development, and procurement.

“Saudi’s public and private sector organizations need to adopt latest technology innovations to enable new digital business models and enhance the Kingdom’s economic competitiveness. In a digital economy era, more public-private partnerships and co-innovation are crucial to fuel a diversified economy and spark the next wave of Saudi talent and entrepreneurship,” said Deema Al-Yahya, Acting Head of the National Digitization Office.

In this context, the National Transformation Program outlines SAR 285 billion (over USD 71 billion) in government spending by 2020, driving public sector cloud adoption. Cloud solutions, running on a pay-as-you-go OPEX model, will be essential for driving Internet of Things and Smart Cities innovation across smart utilities, traffic, and security and defense.

As part of the announcement, the Ministry of Economy and Planning and Ministry of Communication and Information Technology represented by the National Digitization Office will work with SAP to explore integrating the SAP Cloud Hub into the planned government cloud, in order to further enhance government efficiency, employee productivity, and citizen services.

Public Cloud Data Center in the Kingdom to Transform Industry Verticals

Underlining the strong market opportunity, research firm Gartner projects that the Middle East and North Africa’s public cloud services market will grow by 22 percent to SAR 4.5 billion in 2017. Worldwide, 69 percent of CIOs are making significant cloud investments, Oxford Economics maintains. 

SAP is the first international software provider to launch a public cloud hub in Saudi Arabia by end of 2017.  Organizations running solutions on the SAP local data center can securely analyze data in-country for real-time decision-making. Analysts agree the data center will make a major impact in supporting the transformation of Saudi industry verticals such as banking and finance, construction, manufacturing, public sector and retail.

“With the SAP Cloud Hub, the Kingdom will accelerate government-led digital transformation and diversified economic growth. SAP is leveraging global best practices in supporting the Saudi government and organizations of all sizes and industries to use secure, localized cloud solutions to simplify operations, cut costs, and drive agile business models, and unprecedented collaboration,” commented Ahmed Al-Faifi, Managing Director, SAP Saudi Arabia, Bahrain, Yemen.