Germany-based SAP has signed a memorandum of understanding (MoU) to invest $285m over a period of four years in building a cloud services hub in Saudi Arabia.

The hub will comprise a public cloud data centre, a platform for local software developers, a co-innovation centre to support Saudi start-ups and customers, and a facility dedicated to the localisation of SAP’s software and services.

“Saudi’s public and private sector organisations need to adopt the latest technology innovations to enable new digital business models and enhance the kingdom’s economic competitiveness,” Deema al-Yahya, acting head of Saudi Arabia’s National Digitisation Office, said in statement.

SAP’s cloud hub will be eventually integrated into the National Digitisation Office’s planned government cloud.

SAP’s chief financial officer Luka Mucic recently told MEED that his company is aiming to generate $1bn in aggregate revenues across the Middle East region by 2020.

The company, which supplies business applications ranging from enterprise resource planning (ERP) to big data, is understood to have increased its revenues in the region by five times over the past seven years.