"The Middle East is a bit of a dead zone when it comes to cloud computing," said John Dinsdale, chief analyst and managing director of Synergy Research Group. "Will this change? Yes, but slowly." He added, "Any firm that wants to be a serious global cloud provider cannot afford to just ignore the Middle East."
An Amazon spokesman said the company would not go into details about plans for AWS in the Middle East but added that the company is "far from being done adding [cloud computing data centers] in this part of the world."
Amazon Web Services has benefited from the cloud computing boom of the past decade, which allows companies to outsource many IT functions to large, off-site data centers. AWS accounted for 10 percent of Amazon's total revenue in the third quarter, and operating income of $1.17 billion compared to operating profit of just $347 million for Amazon as a whole. AWS is on pace for annual revenue over $15 billion.
But U.S. competitors, including Microsoft Azure and Oracle, are coming hard after Amazon in the cloud — where it has achieved as high as double the market share of any other player, 30 percent, according to one 2017 estimate. International tech players are pushing into cloud services, too, including Alibaba Cloud. Alibaba already has a data center in Dubai, and Oracle has planned a center to serve the United Arab Emirates.
"That's one of the gaps in coverage," said Santhosh Rao of tech consulting firm Gartner. "The Middle East is one obvious region that (Amazon) hadn't addressed."
There are more than 370 data centers in the world, but most of these are in the United States, Western Europe and East Asia, according to Synergy Research Group.
At least in Saudi Arabia, Chinese tech companies like Alibaba and Tencent are poised to dominate the cloud market. But Rao said this is not necessarily the case in the larger region and that it's too early to tell how Saudi Arabia and Dubai will react to the data centers in Bahrain.
"They just set up shop," Rao said. "We'll have to wait and see how it plays out in the long run."