1. Increasing internet penetration and adoption of cloud and managed services due to COVID-19 has significantly driven the demand for data centers in the Middle East
2. Commercial deployment of 5G will kick off in Saudi Arabia, the UAE, Bahrain, Qatar, Kuwait, and Oman by 2023, is anticipated to be deployed by Jordan, Egypt, Lebanon, Morocco, Palestine, Turkey, and Iran.
3. The Middle East is increasingly becoming a hotspot for investment in renewable energy owing to the abundance of solar energy available in the region and is emerging leader in microgrid capacity.
4. The Saudi Authority for Data and Artificial Intelligence (SDAIA) has signed MoUs with IBM, Huawei, and Alibaba under The Kingdom of Saudi Arabia's Vision 2030 which includes building smart cities.
5. There are an increasing number of modular data center facilities being built in the Middle East and can handle systems with a higher rack density.
Market Size & Forecast by Revenue | 2020−2026
Market Dynamics – Leading trends, growth drivers, restraints, and investment opportunities
Market Segmentation – A detailed analysis by IT infrastructure, electrical infrastructure, mechanical infrastructure, cooling technique, cooling systems, general construction, tier standards, and geography
Competitive Landscape – 10 IT infrastructure providers, 13 construction contractors, and 10 data center investors
The Middle East IT infrastructure market expects to grow at a CAGR of over 6% during 2020–2026. The server market is shifting slowly from rack-based to blade servers to support a high-density operating environment. This is because of the increased usage of IoT, big data analytics, artificial intelligence, and machine learning by enterprises across the Middle Eastern market.
The generators market in the Middle East is likely to grow at a CAGR of approx. 8% during 2020–2026. The construction of large facilities is driving the demand for generators in the Middle East. Instability in the power grid in the region is the major factor for the deployment of high-capacity generators.
Cooling systems, including water-cooled chillers, CRAH, and cooling towers, are installed with N+20 redundancy in the Middle East region. Most facilities in the region design to cool servers via water-based cooling techniques. The growing construction of data centers in the UAE is a key factor in developing multiple chillers, cooling towers, and CRAH units. In Saudi Arabia, data centers' construction will increase the adoption of multiple chillers, cooling towers, and CRAH units.
Middle East Data Center Market by IT Infrastructure
Middle East Data Center Market by Electrical Infrastructure
Transfer Switches and Switchgears
Other Electrical Infrastructures
Middle East Data Center Market by Mechanical Infrastructure
CRAC & CRAH Units
Cooling Towers, Dry Coolers, & Condensers
Other Cooling Units
Others Mechanical Infrastructure
Middle East Data Center Market by Cooling Technique
Air-based Cooling Technique
Liquid-based Cooling Technique
Middle East Data Center Market by General Construction
Core and Shell Development
Installation and Commissioning Services
Engineering and Building Designs
Middle East Data Center Market by Tier Standards
Tier I & II
Middle East Data Center Market – Dynamics
Investments in submarine cables have increased considerably over the years, with governments and enterprises continuously strengthening their fiber infrastructure for better connectivity with other countries. Many telecommunication providers and hyperscale data center operators are investing in cables to improve network connectivity with the Middle East. The rise in investment in submarine cables is also likely to attract more data center investments in the region. The adoption of technologies such as cloud, big data, and IoT has strengthened the need for strong fixed broadband connectivity over the last five years. The Middle Eastern region witnessed an increase in the deployment of submarine cables by major telecom and data center operators in the region. Government entities are also bringing in foreign direct investments (FDI) from data center service providers by strengthening their internet connectivity as it is one of the major data center site selection criteria.
Key Drivers and Trends fueling Market Growth:
Growing Procurement of Renewable Energy
Smart City Initiatives Fuel Data Center Deployments
COVID-19 on Data Center Market
Migration from On-Premises Infrastructure to Colocation & Managed Services
Middle East Data Center Market – Geography
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. The country is expected to spend more than $5.3 billion on IT enterprises, which will be one of the factors leading to the development of more data center facilities across the country. The rapid investment in 5G technology and its deployment is leading to the generation of a substantial amount of data, further increasing investments in data centers. Some of the telecommunication companies working towards or having already deployed 5G in the region include Etisalat, Atlas, Sirius Telecom, Emirates Integrated Telecommunications Company (EITC), and ECS Global Wire & Cable.
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