target audience: TECH SUPPLIER Publication date: Aug 2024 - Document type: Market Forecast - Doc Document number: # META50183723
United Arab Emirates Public Cloud Market Forecast, 2024-2028
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Abstract
The value of the public cloud services (PCS) market in the United Arab Emirates (UAE) totaled $2.2 billion in 2023. The market is forecast to record a compound annual growth rate (CAGR) of 21.7% over the next five years, reaching a value of $5.9 billion in 2028.
The software-as-a-service (SaaS) segment contributes the majority of cloud revenue, accounting for 58% of the UAE's PCS revenue in 2023. The SaaS segment will grow at a CAGR of 17.9% over the forecast period (2024–2028) and will remain the largest contributor to the country's PCS market.
Platform as a service (PaaS) will be the fastest-growing segment, with a CAGR of 29.0% over the forecast period. This growth will be driven primarily by the increasing use of cloud-based AI platforms, integration and orchestration middleware, data management software platforms, analytics, and business intelligence (BI) software platforms. AI platforms and integration and orchestration middleware are expected to grow the most rapidly among all PaaS deployment models.
Infrastructure as a service (IaaS), the second largest segment, is expected to grow at a CAGR of 24.7% over the forecast period. Key drivers of this growth include IT infrastructure modernization initiatives by end-user organizations, supported by in-country cloud region investments by global and local cloud providers. Investment in generative AI (GenAI) is another key driver. IDC's GenAI Survey, conducted in October 2023, showed that 50% of GenAI investments by end-user organizations in the UAE will be focused on building the required infrastructure.
This IDC Market Forecast analyzes the public cloud services market in the UAE and forecasts the market size for the 2024–2028 period.
"Accelerated AI adoption is boosting cloud demand, creating abundant opportunities in all three segments. In terms of IaaS, infrastructure supporting AI workloads is in demand, while AI, analytics, and data platforms drive growth in the PaaS segment. AI-embedded enterprise applications drive SaaS growth. Technology suppliers should leverage their cloud foundation, reshape their operational strategies, and align their messaging to capitalize on this trend and reap the greatest possible benefit." — Senior Research Analyst Nitesh Rathi, Software and Cloud, IDC MEA