By Tim Bawtree, founder and CEO
Last month’s LEAP conference held at was designed to introduce the world to the Kingdom of Saudi Arabia’s significant progress with its digitalisation agenda. Over the course of 3 days not only did over 100,000 delegates visit the 700-plus exhibitors at the conference but major announcements and commitments were made by global tech players including SAP, Ericsson and Huawei. The power of the event to attract such interest is testament to the progress and pace of adoption of cutting- edge technology in the Kingdom.
FIVE-YEAR PLANS DRIVING GROWTH
Of course, this is a direct product of the forward-thinking 5-year plans initiated by the government of KSA. An ambitious set of goals to move government, business and society towards a modern digital economy has provided the driving force for development. The 3 rd five-year plan is now in place with a focus on smart government and has already won awards and the Kingdom now offers over 6,000 e-government services and records 3 billion digital transactions a year. Currently ranked 43 by the UN E-Government Development Index (EGDI), the ambition is to move to 38 this year and be among the top 10 by 2030. By 2025 the digital sector will contribute over 19% of the whole Gross Domestic Product (GDP) of KSA. This compares to less than ten per cent digital contributions to the economies of Europe and the US in 2020. The differences in digital take up can already be seen. In Europe and the US 89% of the population use the internet whilst Saudi Arabia it is a staggering 96%. The relative youth of the population in the region is another factor with the average age of Saudi nationals at 31 years 39 in Europe and the USA.
Spending on digital is already accelerating. Turki Al-Manea, executive director of investment at Saudi Arabia’s Digital Government Authority estimates that spending on digital transformation has already reached nearly $3.2 billion a year. This investment is targeted at cloud computing, emerging technologies such as AI as well as open-source software for government. Crucially, in the same interview Al-Manea stressed that the government was keen to use partnership an allocation models to liberate government assets and infrastructure to the private sector.
DEMAND FOR DIGITAL INFRASTRUCTURE
All of this progress is creating huge demand for data centres as the critical infrastructure of the digital economy. As suggested above, partnership models will be critical to ensure that the modern, high-tech, and highly sustainable facilities needed can be built fast enough. Data centre design, build and operation is a complex business requiring specialist expertise. Even finding suitable sites, close to where services are needed, but secure, and with resilient connections to both power and the fibre-optic cables that link them to the global internet, requires detailed planning and experience.
To deliver the clouds that form the foundation of government, private sector and consumer use of digital services, the Kingdom is also increasingly successful in attracting the ‘hyperscale’ global cloud service providers. The likes of Amazon Web Services, Google and Microsoft are all on the hunt for suitable sites and solutions to provide regional clouds and require data centres to host them. Although these mega-players will build and operate their own facilities, the sheer pace of growth means that they also need partners to help establish services to meet demand fast.
PARTNERSHIP FOR DELIVERY
It is against this backdrop of ambitious growth and demand, that Quantum Switch provides a unique solution. Through our joint venture with Saudi Arabia’s leading infrastructure and investment firm Tamasuk, we can deliver expertise and funding to rapidly secure the right sites, design and build data centres, and create flexible operating models that deliver the best value and highest return on investment for government funds. As announced last month, Quantum Switch Tamasuk (QST) has already been awarded contracts to design, deliver and operate six 50MW data centres across the Kingdom in the next five years. Work is already underway with hyperscale tenants already agreed for the first facility due to open later this year.
The award of these keystone contracts by the Ministry for Communications and IT (MCIT) of KSA emphasises the faith the government has in the skills, capabilities and experience of QST to contribute to this crucial backbone of its digital transformation. Building on this we will help both public and private sector organisations make the best use of cloud and digital technologies to rapidly accelerate growth and development. As such, we expect our model and approach to lead to many more opportunities to support digitalisation in KSA and across the region.