Middle East Data Center Colocation Market Report 2023-2028 - IoT & Big Data Fueling Data Center Investments, On-Premises Infrastructure Migrating to Colocation & Managed Services

DUBLIN, Dec. 7, 2023 /PRNewswire/ -- The "Middle East Data Center Colocation Market - Industry Outlook & Forecast 2023-2028" report has been added to  ResearchAndMarkets.com's offering. 

The Middle East data center colocation market is expected to reach a value of $2.14 billion by 2028 from $1.44 billion in 2022, growing at a CAGR of 6.83% from 2022-2028

In the Middle East data center colocation market, the UAE and Saudi Arabia are the major contributors to the capacity in the region, with around 35% and 23%. The market in these countries is expected to skyrocket in four to five years due to the shift from the oil economy to the digital economy in the region. Cloud-based services, smart city developments, and fiber connectivity are other factors driving continuous colocation data center investments across the region.

Prominent operators in the Middle East data center colocation market include Khazna Data Centers, Gulf Data Hub, MEEZA, Moro Hub, stc, Turkcell, and Oman Data Park. These providers are making significant contributions to the industry. Notably, Khazna Data Centers and Gulf Data Hub are spearheading growth by developing over 15 data center facilities across the UAE, Saudi Arabia, Oman, Kuwait, Qatar, and Bahrain, set to operational in the forecast period.

The UAE dominates the regional market in terms of data center developments. In addition, Saudi Arabia, Israel, and Oman are among the significant contributors to high data center development activities in the Middle East data center colocation market. Qatar, Bahrain, and Kuwait are emerging markets that witness significant growth because of digitalization and growth in connectivity.

In the Middle East, the presence of smart cities in the region also drives data center investments. For instance, the NEOM project in Saudi Arabia is under development as a part of Crown Prince Mohammed bin Salman's Vision 2030, which will also comprise data center development under a joint venture firm, ZeroPoint DC.

The region's major global cloud service providers include Amazon Web Services, Tencent, Microsoft, Google, Alibaba, Oracle, and Huawei Technologies. For instance, the Oracle cloud region is co-located in Mobily Jeddah, Saudi Arabia.

Digitalization across businesses will increase data center investments by colocation, cloud, Internet, and telecommunication providers. Some telecom companies such as Ericsson, stc, Turk Telecom, Cellcom, Zain, Nokia, Vodafone, Ooredoo, du, and Omantel are responsible for deploying and introducing 5G services in Middle Eastern countries.

MARKET TRENDS

Rise in the Procurement of Renewable Energy Sources

The Middle East has abundant solar energy, and most countries in the region are undertaking renewable energy strategies & visions to develop renewable energy projects and meet the carbon-neutral goals set by respective regional governments.

In December 2022, Saudi Arabia announced the development of 10 renewable energy projects with a power capacity of 7 GW, which is part of the Kingdom's 2030 Vision.

Increasing Cloud Investments

The increase in digitalization and the shift of workloads to cloud platforms from on-premises facilities to make their operations more efficient and scalable witnessed an increase in investments by cloud service providers in the Middle East over the last few years. Most cloud regions are likely to be co-located in the facilities of major operators.

Amazon Web Services aims to develop the infrastructure region in Tel Aviv, Israel, to set up its facility, which will likely be operational in 2023. In 2022, Google launched its first local cloud region in Israel, Amazon outpost cloud services were deployed for the first time in Oman in the Oman Data Park, and Microsoft established its first global data center region in Qatar.

SEGMENTATION INSIGHTS

Most facilities in the Middle East data center colocation market are being developed to operate at a PUE of less than 1.5. In contrast, few facilities in countries like Turkey that adopt partial free cooling during peak winters aim to operate at a PUE of less than 1.3. In the Middle East data center colocation market, investments in cooling infrastructure contribute the major share of more than 65% in the mechanical infrastructure due to the high temperature in some countries during the peak summers.

The region witnessed growth in the deployment of data centers in Tier III and Tier IV certification in the design phase/construction phase of the region. At the same time, most private and public entities (BFSI, education, government) have received Uptime Institute's Tier III/IV certification, either during the design phase or for the constructed facility.

MARKET DYNAMICS

Market Opportunities & Trends

• Rising Adoption of Renewable Energy Sources
• Increase in 5G Deployments Fueling Edge Data Center Investments
• Deployment of Submarine Cables & Inland Connectivity
• Smart City Initiatives Driving Data Center Investments
• Increase in Ai Adoption

Market Growth Enablers

• Cloud Adoption Driving Data Center Investments
• IoT & Big Data Fueling Data Center Investments
• On-Premises Infrastructure Migrating to Colocation & Managed Services
• Deployment of Modular Data Centers

Market Restraints

• Security Challenges in Data Centers
• Dearth of Skilled Workforce
• Location Constraints on the Development of Data Centers
• Supply Chain Disruptions in Data Centers

VENDOR LANDSCAPE

Prominent Data Center Investors

• Adgar Investments and Development
• Batelco
• Bynet Data Communications
• Equinix
• EdgeConneX
• Future Digital Data Systems
• Gulf Data Hub
• Khazna Data Centers (G42 & Etisalat)
• Moro Hub
• MedOne
• MEEZA
• Mobily
• Oman Data Park
• Ooredoo
• stc
• Turkcell
• Turk Telekom
• Telehouse

New Entrants

• Agility
• Compass Datacenters
• Digital Realty
• Damac Data Centres (EDGNEX)
• Global Technical Realty
• Infinity
• Quantum Switch Tamasuk
• Serverfarm
• Techtonic
• ZeroPoint DC

MARKET SEGMENTATION

Segmentation by Colocation Service

• Retail Colocation
• Wholesale Colocation

Segmentation by Infrastructure

• Electrical Infrastructure
• Mechanical Infrastructure
• General Construction

Segmentation by Electrical Infrastructure

• UPS Systems
• Generators
• Transfer Switches & Switchgear
• Power Distribution Units
• Other Electrical Infrastructure

Segmentation by Mechanical Infrastructure

• Cooling Systems
• Racks
• Other Mechanical Infrastructure

Segmentation by Cooling Systems

• CRAC & CRAH Units
• Chiller Units
• Cooling Towers, Condensers & Dry Coolers
• Other Cooling Units

Segmentation by Cooling Technique

• Air-based Cooling Technique
• Liquid-based Cooling Technique

Segmentation by General Construction

• Core & Shell Development
• Installation & Commissioning Services
• Engineering & Building Design
• Fire Detection & Suppression
• Physical Security
• DCIM/BMS Solutions

Segmentation by Tier Standard

• Tier I & II
• Tier III
• Tier IV

Middle East

• UAE
• Saudi Arabia
• Israel
• Oman
• Qatar
• Kuwait
• Jordan
• Bahrain
• Other Middle Eastern Countries

For more information about this report visit https://www.researchandmarkets.com/r/g9p0qr

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