The recent report by the Wall Street Journal that Google’s parent Alphabet is undertaking discussions with Saudi Aramco to build a technology hub comprising of data centres around Saudi Arabia is significant in many ways.

Locating a data centre or a series of data centres in the kingdom could unlock the benefits of cloud computing for many companies – from small-to-medium sized enterprises (SMEs) to the largest firms like Saudi Aramco itself - which have been constrained by the lack of a clear regulatory framework governing the use of data centres that are located outside the kingdom.

This grey area is understood to have held back most companies, including government agencies, from adopting public and enterprise cloud services, which, when appropriately used, could improve the efficiency of how companies use and pay for hardware and software licenses and services.

Google, like its rival Microsoft, is understood to have been spending $10bn a year in building an expanding data centres globally.  A $1bn data centre in Saudi Arabia, for example, will have a major multiplier effect not just in terms of jobs creation – an average Google data centre creates 150 jobs – but in enabling an environment that would allow companies located in the kingdom to access the same technologies that are available to their international counterparts.

It is also significant in that none of Google’s over a dozen existing data centres are located in the Middle East and North Africa region, while Amazon has started building three data centres in Bahrain that are expected to become operational next year.

Given a predominantly young demographic, the countries in the Mena region has some of the world’s  highest users per capita of smart phones and social networks, which drive the use of cloud services, an opportunity that these tech companies would not like to miss.

In addition to addressing regulatory grey areas, building data centres within the region would in theory allow these global tech companies to provide faster data transfer rates to users, which could help encourage technology start-ups in the kingdom.

For Saudi Arabia, hosting one of the world’s largest tech companies will also go a long way towards its efforts to project itself as a market that embraces new technologies to truly transform its economy away from oil dependence.

It is foreseeable, though, that having both Aramco and Alphabet lawyers agree to the conditions of such an investment, including the level of oversight on data that flows through these data centres once they are operational, will comprise the most work.