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IDC Cloud Spending Projected to Contribute USD 1.2 Billion to Bahrain’s GDP by 2026

Bahrain

Based on a recently published Economic Impact Study by the International Data Corporation (IDC), cloud spending in Bahrain is projected to contribute over USD 1.2 billion to the Kingdom’s GDP by the year 2026 (an equivalent to approximately 2.3% of GDP). This is expected to generate an economic return of USD 6.7 for every dollar invested in cloud technology and projected to create over 9,300 jobs. The results of the study, which conducted a comprehensive analysis of national investments in cloud technology and infrastructure to determine its impact on the economy, determined that Bahrain’s forward-looking legislation, business-friendly environment, and digitally skilled local talent, have been pivotal in achieving a remarkable cloud journey and technological progress.  

According to IDC, Bahrain has demonstrated strategic and tactical awareness in its agile responsiveness to global trends in an era of digital innovation by being the first in the region to mandate a national Cloud-First policy, which led to increased cloud spending in 2019. Having conceptualised a cloud security framework, and enacted flexible regulations, Bahrain has established a mature, cloud-ready infrastructure and ecosystem, effectively positioning itself as a leading regional cloud and data centre hub in the Middle East and North Africa (MENA) region.

The white paper additionally determined that Bahrain’s Cloud-First Policy, the public sector’s commitment to digitising national infrastructure, and the ongoing investments in cloud-based solutions have led to enhanced operational performance for organisations across multiple sectors, where the use of data analytics and advanced AI technologies will further fuel nation-wide cloud adoption. Bahrain’s leading position in digitising its economy and advancing its ICT infrastructure with key digital initiatives was spearheaded by government bodies including the Information & eGovernment Authority (iGA) and Bahrain Economic Development Board (Bahrain EDB).

The collaborative efforts successfully accelerated cloud adoption and digital transformation, leading to new regulations being pioneered in Bahrain, such as the data jurisdiction law. This was further backed by the Labour Fund, Tamkeen, which has consistently invested in the upskilling and reskilling of the national workforce. As a result, Bahrain has secured key success stories as part of its digital transformation journey, in the likes of Amazon Web Services (AWS), which chose Bahrain as the destination to host the first AWS Region in the Middle East and North Africa in 2019.

“Bahrain adopted a Cloud-First policy early on in its digital transformation journey and we are proud to have been the first cloud provider, implementing advanced and secure technology infrastructure aiding in the growth of the country’s IT and cloud spending. At AWS we continue to meet the demands of our customers as new trends in cloud computing, artificial intelligence, data analytics, and many more are emerging at an accelerated pace, driving positive change and economic impact. We are committed to supporting Bahrain as it makes strides in investing in cloud infrastructure across all industries,” said Wojciech Bajda, Managing Director, Public Sector, Middle East, Turkey and Africa, AWS.

“As Bahrain successfully drives its Cloud-first strategy, economic benefits multiply from the ability to scale resources and leverage the workforce, increase accessibility and productivity, and reduce costs while increasing security. Bahrain’s Cloud first strategies will result in accelerated innovation, further stimulating the digital economy,” commented Jyoti Lalchandani, Group Vice President and Regional Managing Director of IDC Middle East, Turkey & Africa.

Musab Abdulla, Executive Director of Business Development, ICT, at Bahrain EDB said, “Bahrain has continuously led the region in digital transformation and adoption of latest technologies. This has resulted in a number of strategic benefits to the Kingdom, including being the globally leading government adopter of cloud infrastructure, with over 85% of all government entities and services being hosted on the cloud. In addition to leading by example, Bahrain’s unique value proposition which offers a highly skilled workforce, unparalleled financial freedom, and the region’s most competitive average annual operating costs has cemented Bahrain as the destination of choice for cloud computing providers including AWS.”

Another key takeaway of the report outlined the economic impact of Bahrain’s cloud adoption, where a similar study conducted by IDC in 2021 analysed the impact of cloud services spending in Europe, which began prior to 2016. Despite the fact Bahrain’s major cloud spending did not start before 2019, the impacts of its GDP contribution, revenue, and employment are similar. Spending on public cloud services in Bahrain is expected to grow by 14.9 times between the base year of 2018 and 2026 — making it one of the fastest among countries in the Middle East and Africa (MEA) region.

The full white paper, Cloud Strategy and Its Impact on Bahrain’s Economy, can be found on (link).

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