In-depth Analysis and Data-driven Insights on the Impact of COVID-19 Included in this Middle East Data Center Market Report
The Middle East data center market by revenue is expected to grow at a CAGR of close to 3% during the period 2019–2025.
The Middle East data center market size by revenue is expected to cross over $3.7 billion by 2025. The industry has witnessed significant growth in recent years. Countries in the Middle East are looking to improve their digital economies. They are involved in a variety of smart city projects, which fuel the growth of data centers in the region. The increase in smart city initiatives is expected to develop the demand for edge computing and edge data centers among countries in GCC. Smart city initiatives in countries such as the UAE and Saudi Arabia are emphasizing the importance of data in improving communication among cities, citizens, automobiles, and electronic devices. The IoT revenue in the Middle East is expected to grow at a CAGR of over 15% by 2025. Also, the adoption of 5G networks has commenced in the region, and it can provide high-capacity connections of up to 10 Gbps. The increased use of connected devices by businesses and consumers is gaining traction in the Middle East data center market. This has led to the high demand for high-bandwidth internet in many rural areas, thereby driving the need for data centers.
The following factors are likely to contribute to the growth of the Middle East data center market during the forecast period: •Renewable Energy Powered Facilities to grow in Middle East •Smart City Initiatives Leading Edge Data Center Deployments •Cloud Adoption fueling Data Center Investments •Increased Government Support to Boost Digital Economy in Middle East
The study considers the present scenario of the Middle East data center market and its market dynamics for the period 2019?2025. It covers a detailed overview of several market growth enablers, restraints, and trends. The report offers both the demand and supply aspect of the market. It profiles and examines leading companies and other prominent ones operating in the market.
Middle East Data Center Market Segmentation The middle east data center market research report includes a detailed segmentation by IT infrastructure, electrical infrastructure, mechanical infrastructure, general construction, tier standards, and geography. The server market is witnessing a gradual shift from rack-based servers to blade ones to support high-density operations. The increased adoption of technology such as IoT, big data analytics, artificial intelligence, and machine learning by enterprises across the Middle East is driving the demand. The trend of adopting organization-specific software over cloud platforms will further increase the demand for high computing servers.
The storage drives market has grown rapidly in the last five years. Storage technology will continue to improve in terms of size and capacity. In the last few years, the demand for faster storage solutions has increased due to the high data generation in the Middle East data center market. The increasing usage of social media platforms in the region will lead to the development of new facilities to store data, thereby increasing the demand for high-capacity storage solutions.
The adoption of lithium-ion batteries is likely to increase during the forecast period in the region as their price will continue to decline. Since most vendors are offering lithium-ion based UPS systems, the market is likely to become highly competitive during the forecast period. Data centers in Saudi Arabia are equipped with a minimum N+1 redundancy for power systems. Facilities are equipped with electrical infrastructure with N+1 redundancy in power supply that can sustain operations for long periods without any outages. The Middle East data center market for generators will continue to grow because of the continuous construction of large and mega facilities in the region. DRUPS solutions are likely to witness increased demand among data centers with multiple modules having a total capacity of over 2 MW at N+N or 2N redundant configurations. Also, the adoption of diesel generators with capacity ranging from 1?2 MW is identified among multiple facilities in the region. The growing complexity of data center infrastructure is propelling the growth of automated switchgear technology. The importance of maintaining switchgear is also growing among facility operators as they aid in switching power from the utility to a secondary power source such as generators during power outages.
The majority of Middle East countries do not support the use of free cooling systems. The Middle East data center market is adopting water-based cooling systems; however, direct liquid cooling and immersion cooling solutions are likely to witness high adoption. Some data centers utilize air-based cooling solutions. Dedicated data center buildings, especially operating at a higher rack density, are cooled through the water-based cooling techniques. The facilities in Turkey are equipped with indirect adiabatic cooling solutions as the country offers free cooling solutions for a minimum of 4,000 hours per year. Most facilities in the UAE are adopting water-based cooled chillers, air-cooled CRACs, and water-based cooling towers. Turkey is also a favorite location for both water-based cooling and free cooling techniques.
The Middle East data center market has the presence of both local and global data center contractors. The market lacks a strong, skilled workforce to accommodate the growing need for data center operational personnel. However, data center investments are likely to increase the skilled workforce during the forecast period. The UAE will aid in the growth of greenfield projects as well as modular facilities due to the strong presence of both local and global data center contractors across design, construction, installation, and commissioning services.
In the last five years, the number of Tier I & Tier II have significantly declined in the Middle East data center market. UPS and PDU systems in Tier II data centers are equipped with minimum N+N redundancy. All other infrastructure facilities are identified to work through the single delivery path with no redundancy in most cases. Tier II facilities have minimum redundancy. The redundancy of Tier II facilities in power infrastructure is mostly N+1. The service operators are spending on infrastructure in Tier I and Tier II facilities while focusing on adding redundant infrastructure for power instead of cooling systems. These facilities have a power capacity of less than 1 MW and are not involved in running mission-critical applications. A majority of underdeveloped projects across the region fall under the Tier III category. This trend is likely to continue during the forecast period, with many operators expected to move to the Tier IV category based on the growth in rack power density and critical data center applications.
Segmentation by IT Infrastructure •Server Infrastructure •Storage Infrastructure •Network Infrastructure Segmentation by Electrical Infrastructure •UPS Systems •Generators •Transfer Switches & Switchgears •PDUs •Other Electrical Infrastructure Segmentation by Mechanical Infrastructure •Cooling Systems oCRAC & CRAH Units oChiller Units oCooling Towers & Dry Coolers oOther Units •Racks •Other Mechanical Infrastructure Segmentation by General Construction •Building Development •Installation & Commissioning Services •Building Designs •Physical Security •DCIM Tier Standard •Tier I & Tier II •Tier III •Tier IV
INSIGHTS BY GEOGRAPHY Saudi Arabia has strong fiber connectivity in the Middle East that is connected to several parts of the world. Ericsson deployed the commercial rollout of 5G network with operations in advanced markets such as Saudi Arabia and other countries in the Middle East. The increased investment of 5G networks is fueling the growth of internet users, thereby leading to the rapid growth of data center investments. In 2019, Gulf Data Hub in Jeddah, Saudi Arabia, invested an estimated amount of around $60 million for the development of its facility. Solar power is an important renewable energy in Saudi Arabia as oil prices have risen. The availability of renewable energy to power data centers is increasing YOY in the Saudi Arabian market.
Segmentation by Africa •UAE •Saudi Arabia •Turkey •Jordan •Other Countries
INSIGHTS BY VENDORS The Middle East data center construction market is continuing to grow in terms of greenfield, brownfield, and modular data center construction. The market is still witnessing increased growth in the number of data centers across all regions, with high adoption of efficient and modular facility infrastructure solutions. The market has a strong presence of vendors across all three categories, such as electrical infrastructure, mechanical infrastructure, and general construction. The competition between the vendors will increase along with the construction of hyperscale facilities in the region.
Prominent Construction Contractors •Red Engineering •Atkins •ISG •McLaren Group of Companies •ICS Nett •Laing O’Rourke •NOVA Mission Critical •Edarat Group •Linesight •Deerns •Enmar Engineering •Qatar Site and Power •Harinsa Qatar (HQ) •Turner & Townsend
Prominent Data Center Investors •Akbank •Amazon Web Services (AWS) •Equinix •Batelco (Bahrain Telecommunications Company) •Etisalat Group •Gulf Data Hub •Khanza •Turkcell •Telecom Italia Sparkle •Zain
KEY QUESTIONS ANSWERED 1.What is the Middle East data center market size and growth rate during the forecast period? 2.What are the factors impacting the growth of the Middle East data center market share? 3.What are the drivers, trends, and restraints in the market? 4.Who are the leading vendors in the Middle East data center market, and what are their market shares? 5.What is the impact of the COVID-19 pandemic on the Middle East data center market shares?
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