Data Centers in Riyadh
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Riyadh – Gateway to the Kingdom's Digital Economy
Riyadh is the primary digital gateway for Saudi Arabia, serving businesses that require low-latency access to one of the largest economies in the Middle East. The market is defined by significant government investment in digital transformation, making it a critical location for cloud service providers and enterprises focused on regional growth and data sovereignty. Its strategic importance far outweighs its current connectivity density, positioning it for rapid expansion.
Riyadh: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Strong national connectivity with developing international links. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Access is available via network extensions to regional hubs. |
| Power Cost | SAR 0.18–0.24/kWh | Based on industrial rates; very competitive for the region. |
| Disaster Risk | Low (2.4/10) – as of September 2025 | Primary risks are non-seismic, such as drought and flooding. |
| Tax Incentives | Yes | Includes a national investment fund supporting high-tech projects. |
| Sales Tax | 15% VAT – as of September 2025 | Standard Value Added Tax rate applied to services. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: As a major national hub, Riyadh provides access to a growing number of domestic and regional carriers. The market features at least one carrier-neutral facility, offering interconnection options for enterprises building resilient networks, as of September 2025.
Direct Cloud On-Ramps: There are no direct, private cloud on-ramps located within Riyadh data centers as of September 2025. Secure, low-latency connections to major cloud providers like AWS, Azure, and Google Cloud are achieved via dedicated network links to nearby hubs in the UAE or Europe.
Internet Exchange Points (IXPs): The primary internet exchange is the Saudi Arabian Internet Exchange (SAIX). Peering through SAIX helps localize traffic, reducing latency for users within the Kingdom and improving application performance.
Bare Metal: Bare metal compute is available from providers serving the region. These services allow businesses to deploy dedicated servers for performance-intensive workloads, with examples including Hivelocity and phoenixNAP.
Power Analysis
Average Cost Of Power: The average cost for industrial power in Riyadh is estimated between SAR 0.18 and SAR 0.24 per kWh, as of September 2025. This competitive pricing structure makes running high-density compute workloads economically viable. The national grid is overwhelmingly powered by fossil fuels.
Power Grid Reliability: The power grid serving Riyadh's main commercial and industrial zones is well-engineered and reliable. Data centers in the area are supported by redundant power feeds and substation access, ensuring high levels of uptime for critical infrastructure.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in Riyadh are strategically located to serve the city's central business district, King Abdullah Financial District (KAFD), and numerous industrial cities. This proximity provides low-latency connectivity essential for the finance, government, and technology sectors driving Saudi Vision 2030.
Regional Market Reach: Riyadh serves as an ideal digital hub for organizations targeting the nearly 40 million people in Saudi Arabia. Its central location also makes it a strategic anchor for delivering services across the broader Gulf Cooperation Council (GCC) region.
Tax Advantage For Data Centers: Saudi Arabia offers compelling incentives for technology investments. The government actively supports high-tech projects through a dedicated investment fund, aiming to accelerate digital transformation and attract foreign capital.
Natural Disaster Risk
Riyadh has a low overall natural disaster risk profile, with an INFORM Risk score of 2.4 out of 10 as of September 2025. The primary environmental hazards are related to climate and geography rather than seismic or cyclonic events.
Key risks include:
- Drought: Score of 5.0
- River Flood: Score of 4.8
- Coastal Flood: Score of 4.7 (A regional risk impacting national infrastructure, not a direct threat to the inland city)
- Earthquake: Score of 1.8
The risk of tsunami and tropical cyclones is negligible for this inland capital.
