Cloud Computing: Opportunities for Significant Growth (Riyadh Valley Company)

Summary

• In 2022, there was liquidity of about $770 billion for acquiring cloud companies, in addition to $440 billion in cash on balance sheets.p.3
• The valuation of listed cloud companies fell to $1.2 trillion from $2.8 trillion over the preceding 12 months.p.6
• A survey indicated that 27% of companies saw increased spending on cloud-based services because of the pandemic.p.6
• Saudi Arabia public cloud revenue is expected to grow at a compound annual rate of about 16% during 2023-2027, reaching a market size of $2.58 billion by 2027.p.8
• More than 30% of enterprise IT decision makers said public cloud was their top priority in 2019.p.10

Key insights

1. Rising inflation and interest rates were headwinds for the sector, cutting valuations of listed cloud companies.p.6
2. Cloud companies attract venture capital investors thanks to high margins, a relatively small customer base and attractive exits including IPOs and strategic acquisitions.p.6
3. Saudi Arabia spent $27.59 billion on IT services in 2020.p.8
4. Microsoft opened data centers in Dubai and Abu Dhabi in June 2019.p.7
5. Oracle launched a data center in Saudi Arabia in July 2020.p.7
6. CloudLayz, a Riyadh Valley portfolio company, was founded in 2011 and is headquartered in Belgium.p.9