1. The Middle East & Africa (MEA) market is experiencing increased demand for data centers owing to increased development of internal and subsea connectivity, increased internet adoption as a result of COVID-19, and digital transformation by enterprises. The emergence of advanced technology such as IoT and AI, 5G adoption, and smart city initiatives are also driving demand.
2. The increased adoption of colocation and cloud-based services by enterprises are driving the construction of hyperscale data centers by companies such as Teraco Data Environments, Africa Data Centres, stc, Khazna Data Centers, and MainOne among others in the region.
3. In 2020, the Middle East accounted for around 55% of the overall investment received in MEA, while Africa accounted for the remaining share. Countries such as South Africa, Kenya, Nigeria, Saudi Arabia, UAE, and Israel will drive data center demand in the region in coming years.
4. Cloud service providers are also expanding their presence across the region. For instance, Microsoft and its partners in the region are expected to spend over USD 2 billion in data center services in the UAE to grow their local business in the region. In addition, in February 2021, Oracle opened an underground cloud region in Jerusalem, Israel.
5. The MEA market is a significant adopter of modular data center design and development, to manage challenges faced by the region, such as high PUE, increased operational cost, and lack of skilled labor. For instance, Khazna has implemented modular data centers in its UAE facilities. Also, Zain invested in a prefabricated data center with a power capacity of around 5 MW in 2020, built by Huawei Technologies.
Market Size & Forecast by Revenue | 2020−2026
Market Size & Forecast by Area (Sq feet) | 2020−2026
Market Size & Forecast by Power Capacity (MW) | 2020−2026
Market Dynamics – Leading trends, growth drivers, restraints, and investment opportunities
Market Segmentation – A detailed analysis by infrastructure, IT infrastructure, electrical infrastructure, mechanical infrastructure, cooling technique, cooling systems, general construction, tier standards, and geography
Competitive Landscape – 10 IT infrastructure providers, 19 construction contractors, 14 support infrastructure providers, and 28 data center investors
Middle East & Africa Data Center Market – Segmentation
Vendors are also innovating their products with new technologies such as artificial intelligence and machine learning. The servers comprising AI offer features such as analytics for data, ease in developing AI-enabled apps, and flexible deployment of data. Also, the servers that run on ML applications are installed on-premises, in cloud platforms, and on a variety of operating systems.
UPS systems are installed across three major locations in a data center: centralized (overall facility), row-level, and rack-level. In the Middle East & Africa, there is a rise in the deployment of edge data centers; also, colocation data center operators are investing in the region. However, the placement of these systems is highly dependent on the facility design. In terms of adoption, the use of 750−1,500 kVA systems has increased along with a contribution from <500 kVA UPS systems.
A few Tier III facilities are also being developed with 2N redundancy for CRAC & CRAH units. For instance, Telecom Italia Sparkle S.p.A in Turkey is equipped with chiller cooling systems, N+1 pump for protection, and N+1 CRAC units per area. The placement of cooling units other than CRAC & CRAH units depends on the facility design and is based on several parameters such as hotspots, circulation of cold and hot air, and implementation of hot/cold aisle containment.
Middle East & Africa Data Center Market by Infrastructure
Middle East & Africa Data Center Market by IT Infrastructure
Middle East & Africa Data Center Market by Electrical Infrastructure
Transfer Switches & Switchgear
Power Distribution Units
Other Electrical Infrastructure
Middle East & Africa Data Center Market by Mechanical Infrastructure
Other Mechanical Infrastructure
Middle East & Africa Data Center Market by Cooling System
CRAC & CRAH Units
Cooling Towers, Condensers & Dry Coolers
Other Cooling Units
Middle East & Africa Data Center Market by Cooling Technique
Air-Based Cooling Technique
Liquid-Based Cooling Technique
Middle East & Africa Data Center Market by General Construction
Installation & Commissioning Services
Middle East & Africa Data Center Market by Tier Standard
Tier I & II
Middle East & Africa Data Center Market – Dynamics
Various countries in the Middle East & Africa have a long-term vision of renewable energy installation, which will propel data center investments further since many data center operators intend to use renewable energy in their data centers in the medium to long term. The Middle East & Africa region is an emerging leader in microgrid capacity, wherein the grid-connected, on-site energy generation or storage plants help data centers to control power costs more efficiently by saving on peak demand costs charged by traditional grid facilities in many countries. Over the last few years, countries in the Middle East such as the UAE, Qatar, Kuwait, and Saudi Arabia have been working on incorporating renewable energy in their energy generation. Africa has an abundance of solar energy. Moreover, the region has an unstable power grid supply, owing to which data centers are procuring renewable energy in the region. South Africa is witnessing more investments from both global and local data center operators.
Key Drivers and Trends fueling Market Growth:
5G to Grow Edge Data Center Investments
Smart City Initiatives Fuel Data Center Deployments
Migration from On-Premises Infrastructure to Colocation & Managed Services
Rising Data Center Investments
Middle East & Africa Data Center Market – Geography
As of January 2021, the total population of the UAE was around 9.94 million, and the internet penetration in the country was around 99%. The UAE is one of the preferred data center investment locations in the Middle East, attracting investments in around four colocation data center facilities in 2020. The colocation service providers were Khazna Data Centers, Etisalat, and Equinix. Rapid development in network connectivity, government support, and growth in the adoption of cloud, big data, and IoT services have been strong drivers for the growth of the UAE data center market. The rising adoption of cloud-based services is leading to the growth of retail and wholesale colocation services in the region. The market is witnessing an increase in the demand for colocation spaces across existing and upcoming data centers. Some of the leading cloud service providers such as Oracle, Alibaba Cloud, Microsoft Azure, and IBM have a presence in the country.
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