Overview

Information Technology, specifically in the IT consolidation and enterprise-wide solution market has tremendous growth potential in the Kingdom of Saudi Arabia. This positive outlook is a direct function of the tremendous financial boom that Saudi Arabia is experiencing.  Currently, Saudi Arabia is using this surplus cash to steadily move its government and businesses towards a network-integrated future.

Whilst this IT boom occurred in the United States in the late 90s and early 2000s, lack of Internet penetration and connectivity in daily life has slowed the pace of reform in the Kingdom.  As stated by leading Saudi IT professional, ‘companies are assisting both the public and private sector to construct top-to-bottom IT infrastructures within their organizations.

IT service vendors are widening their services portfolio to meet future end-user demand. This demand is shifting from traditional services like deploy and support to customization and outsourcing. Spending on IT Services will increase for several reasons:

• High oil prices will have a direct and positive impact on the economy
• The entry of new players in the telecoms, banking and government sectors will boost demand for services
• Customers are warming up to outsourcing services models
• End users and services providers alike are investing in IT training due to the skills shortage in the country.

It is difficult for service vendors to differentiate themselves in the provision of commercially available packages applications such as ERP, CRM and SCM. As customers shift their focus from infrastructure setup to solutions that bring business efficiency, service providers that understand the challenges of customer’s business and can assist in integrating business and IT will succeed.

Opportunities

The Saudi Council of Ministers has approved a national plan for the development of its telecom and information technology sector with the objective of transforming the Kingdom into a knowledge-based society and a digital economy. 

The plan calls for the establishment of a powerful telecom and IT industries to make them one of the major sources of income. The national plan for telecom and IT has long-term and short-term objectives. The Kingdom has already begun implementing some plans and programs for the development of the sector.

The Kingdom’s first Knowledge Economic City (KEC) is coming up in Madinah (Medina). It will have a technological and economic information center, a campus for medical research and biosciences and a center for studies in Islamic civilization.

The project is expected to attract investments worth more than SR25 billion and create nearly 25,000 new jobs. KEC will have a range of complementary zones -- a technology and KBI zone; an advanced IT studies institute; an integrated medical services zone; a retail zone; and a business district.

For more information please contact:

Ahmed Khayyat at ahmed.khayyat@N0SPAM.mail.doc.gov in Riyadh

Ishtiaq Hussain at ishtiaq.hussain@N0SPAM.mail.doc.gov i Dhahran

Yousef Daqqaq at yousef.daqqaq@N0SPAM.mail.doc.gov in Jeddah