UAE Cloud Computing Market To Grow At 28.75% During The Next Five Years

The UAE cloud computing market size is estimated at $12.84 billion in 2025, and is expected to reach $45.41 billion by 2030, at a CAGR of 28.75% during 2025-2030, research shows.

According to a report by Morodor Intelligence, as businesses and government entities increasingly seek scalability, flexibility, and cost efficiency, the demand for cloud services is surging. In response, organizations are adapting their policies and procurement strategies and reshaping human resource practices and cultural norms to leverage technological advancements fully. Collaborating with a trusted partner becomes paramount in crafting a comprehensive IT ecosystem, addressing challenges, and ensuring swift adoption of innovations.

In the UAE, small and medium enterprises (SMEs) are increasingly leveraging cloud services to enhance their business analytics and artificial intelligence (AI) endeavors. With a pronounced focus on data-driven decisions and the widespread embrace of AI, these SMEs are rapidly weaving these technologies into their operations. This strategic alignment equips them with cutting-edge tools and amplifies their operational scalability, fortifying their competitive stance in the digital landscape. According to a MasterCard survey, 74% of UAE's SMEs expressed confidence in their business growth for 2023.

Furthermore, the UAE government's dedication to digital transformation and its smart city vision presents a fertile ground for cloud service providers. Such initiatives pave the way for innovative solution development and deployment. Supportive government policies further amplify this demand.

Numerous market players are forging partnerships to enhance their digital transformation offerings. A case in point: In September 2023, Microsoft Corp. deepened its collaboration with Abu Dhabi's G42. This partnership is set to propel AI technology advancements and bolster cloud infrastructure services in the United Arab Emirates. The initiative aims to provide the UAE's public sector and select industries with access to Microsoft's Azure cloud and AI capabilities, ensuring alignment with local privacy and regulatory standards. In addition, Microsoft has augmented its Azure services in the United Arab Emirates, utilizing Khazna Data Centers, a collaborative venture between G42 and Emirates Telecom.

With the surge in sensitive data volumes, there's an escalating demand for stringent data protection and cybersecurity measures. This growing challenge underscores the difficulties companies face in safeguarding data and thwarting potential exploitation. Compounding this issue, the nation grapples with a skill gap in pivotal emerging technologies like AI, cybersecurity, and blockchain. This talent deficit poses a significant hurdle to the UAE's ambitions for digital transformation.

The pandemic catalyzed a swift adoption of digital tools across businesses and governments, accelerating the shift to e-commerce and online services. Concurrently, investments in smart infrastructure are on the rise, aiming to elevate urban living standards through smart city technologies and IoT solutions, further propelling market growth.

Cloud computing is not just about adopting new technologies but fundamentally restructuring processes, tools, and experiences in a virtual environment. By enhancing security, user experience, and data integrity, cloud solutions are becoming integral to business operations, fueling the growth of the cloud computing market.

In today's digital landscape, companies are pursuing agility through technology integration, with a notable emphasis on migrating to cloud environments. Leveraging the cloud provides embedded connections and intelligence, fostering interoperability in operations and laying a robust foundation for cloud-connected digital services.

Cloud computing is transitioning towards significant growth, mainly due to its on-demand delivery of IT resources via the Internet using a pay-as-you-go pricing model. Rather than investing in and managing physical data centers and servers, businesses can tap into technology services ranging from computing power to storage and databases based on a need. This shift enables SMEs to allocate resources precisely where needed, curbing unnecessary expenses on IT resources.

The number of internet users is increasing significantly in the country, which propels the data traffic, and there is an expansion of data centers by major cloud providers in the UAE, which aims to open new opportunities for local businesses to leverage high-performance cloud services with low latency. For instance, in June 2024, The UAE's Ministry of Investment and Egypt's Ministry of Communications and Information Technology inked a Memorandum of Understanding (MoU) to jointly invest in data center projects, aiming for a combined IT capacity of approximately 1 GW.

The agreement outlined a commitment for Egypt and the United Arab Emirates to share insights on projects, explore joint ventures, and delve into policy, investment research, certification development, and innovation in the data centers.

Deepak Kumar, Managing Director of ATOP Computer, says:“This growth is being fueled by an exponential rise in data-intensive activities-spanning IoT integration, digital transactions, and advanced analytics powered by AI. At Atop, we're observing a strong shift toward cloud adoption, particularly among SMEs and dynamic industries like healthcare, banking, telecom and construction, where adaptability and scalability are paramount. Today, cloud computing has evolved from a strategic advantage to a foundational necessity for operational agility, cost optimization, and innovation. We remain committed to providing customized, secure, and scalable cloud solutions that empower our clients' digital transformation goals, while closely aligning with national strategies such as UAE Vision 2021 and the Dubai Smart City initiative.”

Moossa M. Alavi, Founder & CEO of Techbot ERP:“The demand for cloud computing in the UAE has skyrocketed in recent years, particularly after 2020. At Techbot ERP, we've observed a 180% year-on-year increase in businesses transitioning from traditional systems to cloud-based ERP platforms. This surge is especially evident in key sectors such as logistics, insurance, supercar rentals, manufacturing, and real estate development-all prioritizing agility, real-time insights, and scalability. We've already enabled 50+ companies and over 600 users to shift to the cloud, and we project that over 75% of SMEs in the UAE will adopt cloud-based automation tools by 2027. Additionally, we're witnessing a strong shift toward advanced cloud ERP adoption for enhanced cybersecurity, regulatory compliance, and sustainable operations-top priorities in the UAE's digital transformation agenda. Businesses are leveraging cloud platforms to meet data residency and sovereignty requirements, ensuring secure and compliant data handling. Cloud ERP also contributes to the UAE's sustainability goals, by optimizing resource usage and reducing energy consumption compared to traditional data centers. Cloud computing is no longer just a technology upgrade-it is now the foundation of digital competitiveness in the UAE.”

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