Google will open a “cloud region” where it can provide its cloud services in Saudi Arabia via a joint venture with state-owned oil producer Saudi Aramco, as Covid-19 prompts a landmark acceleration in digital adoption across the Gulf, CNBC reported.
“The collaboration taps into rapidly expanding cloud services demand in Saudi Arabia, which is forecast to reach a market opportunity up to $10 billion by 2030,” Aramco said in a statement on Monday.
Aramco said the agreement with Google will deliver “high performance, low-latency cloud services to enterprise customers in Saudi Arabia” as warming relations in the region open the political space for U.S. technology companies to expand into the kingdom.
Google began negotiations with Saudi Arabia on the project in 2018, with Google Cloud now moving ahead with plans to establish and operate a new cloud region in the kingdom.
The technology agreement also shows Silicon Valley elites are comfortable doing public business with the regime, despite some concerns over Saudi Arabia’s global role as an exporter of fossil fuels and its poor human rights record.
Google said its investment into Saudi Arabia will allow businesses to grow and scale their offerings in the kingdom. The deal also boosts its cloud computing business, which brings in more than $10 billion in annual revenue for its parent, Alphabet Inc.
Regional e-commerce firm Noon and social media platform Snap were named as customers.
“In order to deliver a positive user experience, it is important to put our infrastructure as close as possible to our customers,” Karl D’Adamo, senior director for infrastructure at Snap Inc., said in a statement.
“With the new Google Cloud region in the Kingdom of Saudi Arabia, we will be able to securely deliver services to our nearby customers at higher speeds and with greater flexibility,” said Hisham Zarka, CTO and managing director at Noon.
Google competes with Microsoft and Amazon in the growing cloud-computing market globally. Google currently operates in 24 regions with 73 availability zones, less than its primary competitors Microsoft Azure and market leader Amazon Web Services.
Amazon Web Services launched its first cloud region in the Middle East in Bahrain last year, servicing top tier local clients such as Emirati bank Emirates NBD and rideshare service Careem. Microsoft launched its offering in the United Arab Emirates around the same time, making Google a later entrant to the regional scene.
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