Middle East and Africa Data Center Colocation Market Outlook Report 2023-2028: Digital-Driven Economies Fuel Expansion, Cloud Investments Surge as Digitalization Accelerates

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Nov 09, 2023, 06:45 ET

DUBLIN, Nov. 9, 2023 /PRNewswire/ -- The "Middle East and Africa Data Center Colocation Market - Industry Outlook & Forecast 2023-2028" report has been added to ResearchAndMarkets.com's offering.

The Middle East and Africa data center colocation market is expected to reach a value of $3.37 billion by 2028 from $2.11 billion in 2022, growing at a CAGR of 8.11% from 2022-2028

In the Middle East and Africa data center colocation market, the UAE and Saudi Arabia are the major contributors to the capacity in the region, with around 24% and 16%.

The Middle East and Africa are poised for a remarkable surge in their data center colocation market over the next four to five years. This significant growth can be attributed to the region's transition from an oil-based economy to a digital-driven one. South Africa leads the charge in Africa, contributing over 60% of the region's data center capacity, followed by Nigeria and Kenya. Key drivers of this continuous investment in colocation data centers include the adoption of cloud-based services, the development of smart cities, and the expansion of fiber connectivity networks.

Major global cloud service providers have a strong presence in the Middle East and Africa data center colocation market, with players like Amazon Web Services, Tencent, Microsoft, Google, Alibaba, Oracle, and Huawei Technologies leading the way. For instance, Oracle's cloud region is strategically located in Mobily Jeddah, Saudi Arabia, catering to the growing demand for cloud services in the region.

The Middle East and Africa region are witnessing a continuous expansion in connectivity infrastructure with the deployment of new submarine cables such as Africa-1, 2Africa, India Europe Xpress (IEX), Raman, Saudi Vision, Blue, Equiano, Medusa Submarine Cable System, and SeaMeWe-6. These cables are expected to become operational during the forecast period, further enhancing regional data connectivity.

The rollout of 5G technology across the Middle East and Africa is poised to have a profound impact on the data center colocation market. 5G technology promises faster internet speeds, increased bandwidth, and reduced processing times, resulting in a significant surge in data volume. This surge in data will drive the demand for expanded data center facilities in the region.

Several countries, including the UAE, Saudi Arabia, South Africa, Oman, Kuwait, Bahrain, Kenya, Nigeria, and Qatar, have already launched commercial 5G network services. Additionally, countries like Turkey, Israel, Ethiopia, Algeria, Ghana, Jordan, Lebanon, and Iran are in the planning stages for 5G deployment and are expected to launch commercial services within the forecast period.

MARKET TRENDS & DRIVERS

Rise in The Procurement of Renewable Energy Sources

The Middle East and Africa region have abundant solar energy resources, prompting governments to embrace renewable energy strategies and visions. The primary objective is to develop sustainable energy projects and fulfill the region's carbon-neutral ambitions. In the UAE, the Energy Strategy 2050 targets a substantial increase in the share of renewable energy, aiming to raise it from 25% to 50% in the overall energy mix by 2050.

Further, under Vision 2030, Saudi Arabia has launched the National Renewable Energy Program (NREP), which includes 13 projects to generate over 4.8 GW of renewable energy. Similarly, Bahrain plans to generate 280 MW of electricity from renewable sources by 2025, increasing to around 700 MW by 2030, aligning with its national renewable energy targets.

In Nigeria, the government has expressed its commitment to sustainability goals for 2030, aiming to generate 30 GW of electricity from renewable sources, accounting for 30% of total production.

Saudi Arabia's 2030 Vision achieved a major milestone in December 2022 by unveiling plans to construct ten renewable energy projects. With a combined power capacity of 7 GW, these projects demonstrate the kingdom's commitment to expanding its renewable energy sector.

Increasing Cloud Investments

Over the last few years, 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 increased investments by cloud service providers in the Middle East and Africa data center colocation market. Most cloud regions are likely to be co-located in the facilities of major operators.

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 Azure established its first global data center region in Qatar.

Amazon Web Services aims to develop an infrastructure region in Tel Aviv, Israel, which will likely be operational in 2023.

In September 2022, Google announced its plan to open a new cloud region in Cape Town, South Africa. The cloud region is expected to be operational in the next 2-3 years.

KEY MARKET PARTICIPANTS' INITIATIVES

Prominent operators in the Middle East and Africa data center colocation market include Khazna Data Centers, Gulf Data Hub, MEEZA, Moro Hub, Africa Data Centres, Raxio Data Centres, IXAfrica, Rack Centre, and Wingu. These providers are making significant contributions to the industry.

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 be operational in the forecast period.

In Africa, Raxio Data Centres is pivotal in developing approximately five facilities across Angola, Ethiopia, the Democratic Republic of Congo, Ivory Coast, Mozambique, and Tanzania, slated to be operational within the forecast period.

GEOGRAPHICAL ANALYSIS

The Middle East and Africa data center colocation market is marked by the UAE's prominent presence and leadership in the data center market, spearheading substantial developments. Notably, with robust data center activities, Saudi Arabia, South Africa, Israel, Kenya, and Oman are significant contributors to the industry.

Moreover, emerging markets like Qatar, Nigeria, Bahrain, Egypt, Ethiopia, and Kuwait are experiencing noteworthy growth due to digitalization and increased connectivity. These trends reflect the region's evolving landscape and growing demand for data center infrastructure.

The presence of smart cities in the region also propels the Middle East and Africa data center colocation market growth. The UAE, Saudi Arabia, South Africa, Kenya, Kuwait, Morocco, Nigeria, Egypt, Ethiopia, and Ghana are some of the major countries in the region that triggered the smart city 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 the data center development under a joint venture firm, ZeroPoint DC.

SEGMENTATION INSIGHTS

Most facilities in the Middle East and Africa 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.

Data centers invest in power infrastructure with a minimum N+1 redundancy. In 2022, UPS systems accounted for a market share of more than 28% of the total electrical infrastructure in data centers.

KEY QUESTIONS ANSWERED:

How big is the Middle East and Africa data center colocation market?
What is the growth rate of the Middle East and Africa data center colocation market?
What is the estimated market size in terms of area in the Middle East and Africa data center colocation market by 2028?
What are the key trends in the Middle East and Africa data center colocation market?
How many MW of power capacity is expected to reach the Middle East and Africa data center colocation market by 2028?

Market Opportunities & Trends

Rise In Adoption Of Renewable Energy Sources
Edge Data Center Investments Fueled By 5G Development
Deployment Of Submarine Cables & Inland Connectivity
Data Center Investments Driven By Smart City Initiatives
Increased Adoption Of Ai

Market Growth Enablers

Data Center Investments Driven By Cloud Adoption
Iot & Big Data Adoption
Shift From On-Premises Infrastructure To Colocation & Managed Services
Deployment Of Modular Data Centers

Market Restraints

Data Center Security Challenges
Dearth Of Skilled Workforce
Location Constraints On Data Center Development

Key Data Center Investors

21st Century Technology
Africa Data Centres
Adgar Investments and Development
Batelco
Bynet Data Communications
Digital Parks Africa
Equinix
EdgeConneX
Future Digital Data Systems (FDDS)
Gulf Data Hub
Galaxy Backbone
iColo (Digital Realty)
IXAfrica
Khazna Data Centers (G42 & Etisalat)
Moro Hub
MedOne
Meeza
Mobily
MainOne
Medallion Communications
NTT Global Data Centers
Oman Data Park
Ooredoo
Paratus Namibia
Rack Centre
Raxio Data Centres
Saudi Telecom Company (stc)
Serverfarm
Turkcell
Turk Telekom
Telehouse
Telecom Egypt
Teraco (Digital Realty)
Wingu

New Entrants

Airtel Nigeria
Agility
Cloudoon
Compass Datacenters
Digital Realty
Damac Data Centres
Global Technical Realty
Infinity
Kasi Cloud
Open Access Data Centres (OADC)
Vantage Data Centers
Quantum Switch Tamasuk
ZeroPoint DC

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
Economizers & Evaporative 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 & Tier II
Tier III
Tier IV

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

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