Microsoft completes construction for new Saudi data centre region

Microsoft expects three Azure Availability Zones to open in 2026

Dec 04, 2024

Illustrative data centre image (Image credit: Microsoft)

#Saudi #datacentres - Microsoft has reached a major milestone in Saudi Arabia with the completion of construction for three data centres and Azure Availability Zones in the Eastern Province. The US software giant expects the new Saudi data centre region to be operational in 2026. Microsoft initially announced plans for a new Microsoft Data Centre and Azure cloud region in Saudi Arabia during LEAP 2023, to offer enterprise-grade reliability and performance combined with customer privacy, data residency, and high-speed latency standards. The move aligns with Microsoft’s $60 billion global investment in AI and cloud infrastructure for 2024.

SO WHAT? - The new Azure cloud region in Saudi Arabia is critical for Microsoft both in terms of its regional and global goals. There is now a global race to build out data centre infrastructure in order to support to growing demand for AI compute and the vast, fast growing amounts of data that support it. Microsoft has announced new data centre projects all over the world this year, including projects in France, Indonesia, Kenya, Malaysia, Mexico and Thailand. The company’s strategy to make Azure cloud a leading hub for AI services, means that there is latent demand for locally resident cloud services from enterprise AI and Big Data users. So, the pressure is on for Microsoft to deliver local cloud regions. Today’s Microsoft announcement adds clarity and helps set market expectations.

Here are some key details from this announcement:

Microsoft has announced the completion of construction on all three Azure Availability Zones in Saudi Arabia’s Eastern Province, with availability expected to be made available to customers in 2026.
The updates follow a recent site visit by a delegation of government officials from the Saudi Ministry of Communications and Information Technology (MCIT) as well as executives from Microsoft headquarters.
Located in Saudi Arabia’s largest province and the centre of the national energy industry, the datacenter region promises low latency and high availability for private and public sector organisations.
Microsoft partnered with the Saudi Ministry of Communications and Information Technology (MCIT) to develop the data centres and cloud region, which was announced in February 2023 at LEAP in Riyadh. The Saudi Minister of Communication and Information Technology H.E. Abdullah Alswaha, quoted at the time, put the Microsoft data centre / cloud investment at $2.1 billion.
Microsoft’s cloud platform Azure is used by over 95% of Fortune 500 companies, and already hosts high-impact projects like SDAIA’s Arabic LLM, ‘ALLaM,’ and the Ministry of Education’s Madrasati platform.
Microsoft aims to train over 100,000 Saudi professionals in AI skills by 2025, via initiatives like the Microsoft AI Academy.
Earlier this year Microsoft and MCIT announced plans for a Centre of Excellence focusing on advancing AI and cloud computing skills.

ZOOM OUT - In 2021 Saudi Arabia’s Ministry of Communications and Information Technology announced new plans to ramp up national data centre investment to $18 billion, with a goal to surpass capacity of 1,300-megawatts by 2030. Since then numerous investment groups, infrastructure developers and global hyperscalers have announced plans for new data centre and cloud regions in the Kingdom committing billions of dollars in investment. Global providers that have made announcements include Alibaba, Amazon Web Services, Cisco, Datavolt, Google, and ServiceNow. Both Oracle and SAP had operational public clouds in Saudi Arabia pre-dating the new Ministry of CIT strategy. Due to the varying plans, partnerships and schedules of different data centre projects it has become increasingly difficult to track what local cloud services and what data centre capacity will be online and when.

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