UAE Cloud Computing Market By Deployment Model (Public Cloud, Private Cloud, Hybrid Cloud), By Service Model (Infrastructure-as-a-Service, Platform-as-a-Service, Software-as-a-Service, Function-as-a-Service), By End User (BFSI, Government, IT & Telecommunications, Retail & E-commerce, Healthcare, Others), By Organization Size (Large Enterprises, SMEs), By Region, Competition, Forecast and Opportunities, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 6.73 BIllion
CAGR (2026-2031)	34.23%
Fastest Growing Segment	SMEs
Largest Market	Dubai
Market Size (2031)	USD 39.37 BIllion

Market Overview

The UAE Cloud Computing Market will grow from USD 6.73 BIllion in 2025 to USD 39.37 BIllion by 2031 at a 34.23% CAGR. Cloud computing in the UAE involves the on-demand delivery of computing services, such as servers, storage, and intelligence, over the internet to foster innovation and flexible resource management. The market is primarily driven by government-led digital transformation mandates, such as the "We the UAE 2031" vision, and the critical need for scalable infrastructure to support surging artificial intelligence adoption. These drivers are further bolstered by the establishment of local data centers by global hyperscalers, which addresses data sovereignty requirements and reduces latency. According to the Dubai Chamber of Digital Economy, in 2024, the organization supported the establishment and expansion of 485 digital startups, marking a 380% year-over-year growth, which underscores the rapidly expanding ecosystem relying on cloud foundations.

One significant challenge that could impede market expansion is the acute shortage of specialized technical talent proficient in cloud architecture and cybersecurity. As organizations increasingly migrate to complex hybrid environments, the gap between the high demand for advanced skills and the available local workforce may slow the pace of secure implementation and optimization.

Key Market Drivers

Rapid Integration of AI and Smart City Technologies is fundamentally reshaping the UAE Cloud Computing Market, as entities aggressively deploy generative models that require immense computational power. This driver is accelerating the transition from legacy systems to high-performance cloud environments capable of handling machine learning workloads and real-time data processing. The magnitude of this shift is evident in major capital injections aimed at bolstering local AI capabilities. According to Microsoft, April 2024, in the 'Microsoft and G42 Announce Expanded Partnership', the company committed a strategic investment of $1.5 billion in G42 to run AI applications on Microsoft Azure. Such investments not only validate the market's potential but also ensure the availability of sovereign cloud infrastructure necessary for sensitive government applications.

Simultaneously, the Expansion of Local Hyperscale Data Center Infrastructure serves as the backbone enabling this digital leap, addressing strict data sovereignty laws. To meet the escalating demand for low-latency services, regional providers are rapidly constructing massive, AI-ready facilities that support high-density computing. According to Khazna Data Centers, October 2024, in the 'Khazna Announces the UAE's First AI-Optimized Data Center', the company launched the construction of a 100MW facility in Ajman designed to support the nation's AI ambitions. This infrastructure boom is further catalyzed by alliances between telecommunications giants and global cloud leaders to democratize access. According to e&, October 2024, in the 'Q3 2024 Consolidated Financial Results', the group confirmed a $1 billion agreement with Amazon Web Services to accelerate cloud-driven innovation across the region.

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Key Market Challenges

The acute shortage of specialized technical talent stands as a formidable barrier to the growth of the UAE Cloud Computing Market. As enterprises rush to adopt complex hybrid and multi-cloud architectures to satisfy digital transformation mandates, the demand for qualified cloud architects, security specialists, and DevOps engineers has severely outpaced the local supply. This scarcity forces organizations to delay critical migration projects and stifles innovation, as the existing workforce often struggles to manage the operational intricacies of modern cloud infrastructure. Furthermore, the deficit in advanced skills increases the vulnerability of sensitive government and corporate data, creating a hesitation to fully commit to the cloud-native strategies necessary for artificial intelligence integration.

According to ISC2, in 2024, 90% of organizations surveyed indicated significant skills shortages within their security and technical teams, a trend that is acutely felt across the Middle East region. This widespread capability gap directly hampers the market by creating an operational bottleneck; businesses have the budget and infrastructure access but lack the human capital to execute secure and scalable deployments. Consequently, the inability to fill these critical roles prevents UAE enterprises from maximizing their return on cloud investment and slows the overall momentum of the national digital economy.

Key Market Trends

The Strategic Shift Toward Hybrid and Multi-Cloud Architectures is becoming a defining characteristic of the UAE market as enterprises seek to balance scalability with strict regulatory compliance. This approach allows organizations to retain sensitive workloads in private environments while leveraging public cloud resources for innovation, effectively mitigating vendor lock-in and ensuring data residency. The preference for such flexible models is driven by an increasing need for governance over digital assets amidst complex sovereignty mandates. According to Red Hat, October 2025, in the 'Red Hat Survey: UAE Organisations Prepare for Widespread AI Adoption and Upskilling', 86% of UAE respondents are prioritizing operational control and autonomy in their cloud sovereignty strategy over the next 18 months, indicating a strong move away from purely public cloud reliance.

Simultaneously, the Rise of Vertical-Specific Cloud Solutions for BFSI and Healthcare is gaining momentum, addressing the unique security and operational requirements of these regulated sectors. Financial institutions are aggressively adopting tailored cloud environments to support specialized capabilities such as blockchain-based trade finance and asset tokenization, which demand bespoke compliance frameworks unavailable in generic infrastructure. This sector-specific evolution is fundamentally reshaping the region's digital economy by enabling secure, high-value transactions. According to Standard Chartered, November 2025, in the 'Future of Trade: Digitisation' report, the UAE leads globally in digital asset adoption with 68% of corporations utilizing these instruments, a development heavily reliant on the deployment of dedicated, industry-compliant cloud platforms.

Segmental Insights

Small and Medium-sized Enterprises (SMEs) constitute the fastest-growing segment within the UAE Cloud Computing Market. This rapid expansion is primarily driven by the strategic shift from capital-intensive physical infrastructure to flexible, cost-effective cloud solutions that facilitate immediate scalability. Furthermore, support from the UAE Ministry of Economy through initiatives focused on digital transformation has significantly incentivized adoption among smaller firms. By leveraging these platforms, SMEs can access critical digital tools and analytics, ensuring operational agility and sustained competitiveness in the regional economy without the financial burden of traditional IT maintenance.

Regional Insights

Dubai leads the UAE cloud computing market, driven by its status as a primary commercial hub and the implementation of strategic digital initiatives. The dominance of the emirate is supported by mandates from Digital Dubai, which facilitate the digitization of government services and encourage private sector adoption. Additionally, the concentration of global technology firms in business zones like Dubai Internet City ensures robust infrastructure availability. This favorable environment attracts substantial investment from major hyperscalers, cementing Dubai as the central operational base for cloud infrastructure within the country.

Recent Developments

• In October 2024, e& signed a major partnership agreement valued at more than $1 billion with Amazon Web Services to accelerate cloud adoption and digital transformation across the Middle East. Over the next six years, the collaboration will focus on delivering core cloud services, including storage, computing, networking, and cybersecurity, to regulated industries such as healthcare, finance, and oil and gas. The telecom giant plans to leverage the cloud provider's extensive portfolio to modernize key platforms and enable small and medium-sized businesses to access advanced digital marketplaces. This alliance is expected to support the UAE's economic goals by enhancing digital resilience and developing local cloud skills.
• In August 2024, the Dubai AI Campus established a collaborative agreement with Google Cloud to foster the growth of the startup ecosystem within the Dubai International Financial Centre. This partnership seeks to leverage the cloud provider's expertise and resources to empower early-stage companies in the region, offering mentorship and access to specialized programs such as a generative AI startup school. The initiative aims to strengthen the campus's position as a favorable destination for technology entrepreneurs to scale their capabilities. By providing state-of-the-art digital infrastructure and support, the collaboration intends to attract world-class talent and diversified investors to the UAE's thriving technology sector.
• In April 2024, Microsoft announced a strategic investment of $1.5 billion in G42, a leading UAE-based artificial intelligence and cloud computing holding company. This significant minority stake enables the US tech giant to take a seat on the partner's board and solidifies a commitment to co-innovate and deliver advanced AI solutions globally. As part of the expanded collaboration, the Abu Dhabi-based firm will run its AI applications and services on the investor's cloud platform, ensuring secure and scalable delivery to public sector clients and large enterprises. The partnership also includes the establishment of a fund to support developers and enhance the regional talent pool.
• In February 2024, Moro Hub entered into a strategic agreement with a global technology leader to construct a green artificial intelligence data center in the UAE. This collaboration aims to combine the local digital service provider's expertise in sustainable infrastructure with the partner's advanced computing capabilities to deliver energy-efficient solutions. The initiative focuses on building facilities that prioritize sustainability while providing high-performance processing power for model training and other data-intensive applications. By establishing this infrastructure, the companies intend to support the country's vision of becoming a hub for innovation and accelerate the adoption of AI technologies across various sectors.

Key Market Players

• Amazon Web Services, Inc.
• Microsoft Corporation
• Alphabet Inc.
• IBM Corporation
• Oracle Corporation
• Alibaba Group
• Salesforce, Inc.
• SAP SE
• Tencent Cloud Europe B.V.
• Broadcom Inc.

By Deployment Model	By Service Model	By End User	By Organization Size	By Region
Public Cloud Private Cloud Hybrid Cloud	Infrastructure-as-a-Service Platform-as-a-Service Software-as-a-Service Function-as-a-Service	BFSI Government IT & Telecommunications Retail & E-commerce Healthcare Others	Large Enterprises SMEs	Abu Dhabi Dubai Sharjah Rest of UAE

Report Scope:

In this report, the UAE Cloud Computing Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• UAE Cloud Computing Market, By Deployment Model:

• Public Cloud
• Private Cloud
• Hybrid Cloud

• UAE Cloud Computing Market, By Service Model:

• Infrastructure-as-a-Service
• Platform-as-a-Service
• Software-as-a-Service
• Function-as-a-Service

• UAE Cloud Computing Market, By End User:

• BFSI
• Government
• IT & Telecommunications
• Retail & E-commerce
• Healthcare
• Others

• UAE Cloud Computing Market, By Organization Size:

• Large Enterprises
• SMEs

• UAE Cloud Computing Market, By Region:

• Abu Dhabi
• Dubai
• Sharjah
• Rest of UAE