This article has been researched and written by the Business Development Team at Creation Business Consultants. AI has not been used in generating this article.
Cybersecurity is growing and evolving rapidly in Saudi Arabia for many reasons, including increasing digitalisation, regulatory obligations, and complex cyber threats. Market growth is expected to be healthy, and there is anticipated support from the government and private agencies.
SAUDI CYBERSECURITY MARKET: TRENDS & GROWTH
The Saudi Arabian cybersecurity market is expected to continue its growth due to growing integration into the global economy, which makes it a target for cyber threats coming from external sources. That said, the government has responded by investing very heavily in the cybersecurity infrastructure through government-led initiatives, as well as providing funding and support to the private sector. For instance, there are increasing reflections of regulatory compliance and data protection in the country, whereby various laws such as the Saudi Arabian Data and Privacy Law and the Cybersecurity Law, each enacted in 2019, require organisations with sensitive data to implement rigorous cybersecurity measures.
The increasing digital adoption of technologies across sectors, particularly cloud services, is driving the market for cybersecurity as more organisations move to the cloud for performance advantages and develop a cloud-first approach for new initiatives (Mordor Intel). For example, we can witness a developing trend of digitalisation within the healthcare sector, as this creates an increasing target for attack and increased vulnerability to cyberattacks; thus, it is expected that cybersecurity in the healthcare sector will increase to protect sensitive patient information and that of the hospital.
SAUDI ARABIA CYBERSECURITY MARKET AND KEY PLAYERS
International and local entities are participating in the cybersecurity space in Saudi Arabia. There are many international companies currently operating, such as IBM, Palo Alto Networks, and McAfee. Palo Alto Networks introduced advanced threat detection and response services, optimised to decrease the alerts, which provides for improved threat management.
Market Size in USD Billion
CAGR 13.78%
STUDY PERIOD
2019 - 2029
Base Year for Estimation
2023
Market Size (2024)
USD 0.63 Billion
Market Size (2029)
USD 1.19 Billion
CAGR (2024-2029)
13.78%
Market Concentration
Medium
MAJOR PLAYERS
CHALLENGES AND OPPORTUNITIES
Although the cybersecurity sector in Saudi Arabia continues to evolve, it does still face substantial challenges that could slow its growth if they are not effectively dealt with. One of the primary challenges is the prominent skills gap within cybersecurity. The rapidly changing nature of cyber threats requires a workforce that is large enough and skilled in the latest technologies and methods. Despite there being a high demand for the right workforce, the fact is that there is a talent gap because local providers of education and skills-on-the-job training are still trying to equal the standard across the world to train professionals at the required level to cope with advanced cybersecurity duties. Adding to the shortage of personnel within Arabia is also due to local competition to offer skilled and experienced compensation and jobs abroad that offer attractive benefits and excellent salaries (Market Research USA).
Another challenge is to coordinate the successful management of cybersecurity in increasingly connected and digitised operations. Organisations are increasingly digitising their operations, which are considered as organisations that University of Chicago Professor Raghuram Rajan classifies as ‘interconnected’ and can therefore expose themselves to more attacks. This complexity is coupled with the speed at which the Kingdom is digitising itself as part of Vision 2030. Innovation in the security strategy and investments in technologies become imperative with the scale and scope of the rapid digital transformation across the economy before and after the effects of the pandemic on our way of life (Mordor Intel).
When we talk about opportunity, there is a considerable amount of opportunity for growth and expansion within Saudi Arabia’s cybersecurity market. An example of opportunity is the growing movement to cloud-based products, opening new doors for cloud security services. Added to this is the strong agenda from the government for cloud-first initiatives and the recent movement towards data sovereignty laws, under which security services for cloud data will have local sovereignty (Mordor Intel). In addition, with the incredible rise of Internet of Things (IoT) devices, in industries such as healthcare, manufacturing, and utilities, there is much opportunity to develop specialised cybersecurity products to meet the security needs of the IoT user (Mordor Intel).
Although there is strong market growth ahead, challenges still exist for Saudi Arabia, including a lack of skilled cybersecurity professionals. The shortage of talent could hurt the country’s ability to mitigate cyber risk effectively. Cybersecurity is a fast-moving field, and there is a heightened sense of urgency for ongoing education and training to ensure professionals are ready with the skills to deal with emerging threats.
CYBERSECURITY LICENSING REQUIREMENTS IN SAUDI ARABIA
There are some regulatory requirements and licensing conditions to consider for a cybersecurity company in Saudi Arabia, but these will mainly be overseen by the National Cybersecurity Authority (NCA) and two separate Ministries: the Ministry of Investment and the Ministry of Commerce and Industry. Business licenses in Saudi Arabia are important for cybersecurity companies because the NCA centrally regulates cybersecurity practices and ensures national cybersecurity standards and practices are followed in both the public and private sectors.
First of all, cybersecurity companies must register with the NCA. Registration became a mandatory regulatory requirement of the NCA on August 1st, 2022, for any person or organisation providing cybersecurity services in the Kingdom of Saudi Arabia. The goal is to establish a baseline for cybersecurity and a standard for which all cybersecurity initiatives would be undertaken, across all sectors, aligned to Saudi Vision 2030.
The registration process involves complying with the Essential Cybersecurity Controls (ECC), which the NCA updated and issued to set forth basic cybersecurity standards. The controls contain numerous requirements, including the securing of critical infrastructures, the management of cyber risks, and the protection from cyber threats. The cybersecurity company may also need to consider certain guidance, such as Cloud Cybersecurity Controls, Critical Systems Cybersecurity Controls, which will also depend on what services are being offered by the cybersecurity company.
In addition to any company-specific licensing requirements with the NCA, cybersecurity companies must also consider the requirements of other applicable laws and regulations such as the Personal Data Protection Law (PDPL), which requires departments to protect personal data similar to GDPR’s requirements, and the Cybersecurity Law which cover general cybersecurity practices as well as actions taken in response to cybercrime (e.g. hacking). It is important for firms to react to this compliance is paramount considering most firms will operate in a highly regulated environment and compliance is subscription to maintaining operational legality as well as a firm’s reputation and ability to be trusted.
Another positive aspect of the NCA registration process is that there are no fees associated with registration, meaning firms can more easily comply with the regulatory requirements. However, companies must still comply with a larger regulatory burden, and the maintenance and ongoing compliance with the ever-changing set of rules is a challenge for firms to keep up with, as laws may evolve from new types of cases, and there are subsequent legal and technical requirements to comply with.
For further information on licensing requirements and registration guidelines, information should be directly obtained from the NCA or from lawyers or consultants in relation to Saudi Arabian cybersecurity regulations.
TAKEAWAY
If your organisation is contemplating entering the Saudi Arabian Cybersecurity market and would like an expert discussion on the overall scope of the market, the necessary licensing, and the structuring of a new company in Saudi Arabia, please feel free to get in touch with our Corporate Advisory team at Creation Business Consultants.
