Middle East Data Center Colocation Market - Industry Outlook & Forecast 2023-2028

Middle East Data Center Colocation Market - Industry Outlook & Forecast 2023-2028
The Middle East data center colocation market is expected to grow at a CAGR of 6.83% from 2022-2028.

KEY HIGHLIGHTSIn 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.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 SourcesThe 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.I. In the UAE, the Energy Strategy 2050 aims to increase the share of renewable energy from 25% to 50% in the total energy mix by 2050.

II. Saudi Arabia has launched The National Renewable Energy Program (NREP) under Vision 2030, where 13 projects will generate over 4.8 GW of renewable energy. In addition, Bahrain plans to generate around 280 MW of electricity from renewable sources by 2025, increasing to around 700 MW by 2030 to attain national renewable energy targets.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 INSIGHTSMost 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.Segmentation by Colocation ServiceRetail ColocationWholesale ColocationSegmentation by InfrastructureElectrical InfrastructureMechanical InfrastructureGeneral ConstructionSegmentation by Electrical InfrastructureUPS SystemsGeneratorsTransfer Switches & SwitchgearPower Distribution UnitsOther Electrical InfrastructureSegmentation by Mechanical InfrastructureCooling SystemsRacksOther Mechanical InfrastructureSegmentation by Cooling SystemsCRAC & CRAH UnitsChiller UnitsCooling Towers, Condensers & Dry CoolersOther Cooling UnitsSegmentation by Cooling TechniqueAir-based Cooling TechniqueLiquid-based Cooling TechniqueSegmentation by General ConstructionCore & Shell DevelopmentInstallation & Commissioning ServicesEngineering & Building DesignFire Detection & SuppressionPhysical SecurityDCIM/BMS SolutionsSegmentation by Tier StandardTier I & IITier IIITier IVGEOGRAPHICAL ANALYSISThe 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.Segmentation by GeographyMiddle EastUAESaudi ArabiaIsraelOmanQatarKuwaitJordanBahrainOther Middle Eastern CountriesVENDOR LANDSCAPEProminent 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.Prominent Data Center InvestorsAdgar Investments and DevelopmentBatelcoBynet Data CommunicationsEquinixEdgeConneXFuture Digital Data SystemsGulf Data HubKhazna Data Centers (G42 & Etisalat)Moro HubMedOneMEEZAMobilyOman Data ParkOoredoostcTurkcellTürk TelekomTelehouseNew EntrantsAgilityCompass DatacentersDigital RealtyDamac Data Centres (EDGNEX)Global Technical RealtyInfinityQuantum Switch TamasukServerfarmTechtonicZeroPoint DCKEY QUESTIONS ANSWERED:

1. How big is the Middle East data center colocation market?

2. What is the growth rate of the Middle East data center colocation market?

3. What is the estimated market size in terms of area in the Middle East data center colocation market by 2028?

4. What are the key trends in the Middle East data center colocation industry?

5. How much MW of power capacity is expected to reach the Middle East data center colocation market by 2028?