Middle East and Africa Data Center Colocation Markets 2022-2027 - Migration from On-Premise Infrastructure to Colocation & Managed Services Bodes Well for the Growing Sector

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Dec 29, 2022, 13:15 ET

DUBLIN, Dec. 29, 2022 /PRNewswire/ -- The "Middle East and Africa Data Center Colocation Market - Industry Outlook & Forecast 2022-2027" report has been added to ResearchAndMarkets.com's offering.

The Middle East and Africa data center colocation market is expected to grow at a CAGR of 8.68% during 2022-2027.

Some of the significant factors that are acting as a factor for the growth of the data center colocation market in the Middle East & Africa include increased digitalization initiatives across several countries, cloud service providers colocating the data centers, growth in connectivity, and others.

The market has witnessed the entry of several global colocation operators through the acquisition of local colocation operators. For instance, in August 2022, Digital Realty announced the completion of the acquisition of African colocation operator Teraco Data Environments. The region is witnessing significant initiatives for connectivity with growth in submarine cable deployments.

In the Middle East & Africa, Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait, Oman, Israel, Turkey, Lebanon, Yemen, Iran, South Africa, Egypt, Nigeria, Kenya, Morocco, and Djibouti are some of the countries with more submarine cable connectivity, which connects Americas, European, and Asian countries boosting the Middle East and Africa data center colocation market.

MARKET TRENDS

COVID-19 Impact on Data Center Investments

Due to the COVID-19 pandemic, the demand for data center services in the Middle East & Africa has increased with the heightened access to internet-related services aided by nationwide lockdowns imposed by governments in March 2020. Online shopping, even post-COVID-19, has increased the demand for online platforms compared to traditional shopping.

In Turkey, there was an 85% increase in online shopping YOY, and the e-commerce sector in Turkey expects to reach over USD 50 million by the end of 2021. For instance, Carrefour, a retail grocery company, witnessed a sales increase of around 50% in Q1 2020. Such factors are becoming a major contributor to the growth of the Middle East and Africa data center colocation market

Smart City Initiatives Across Several Countries Aiding the Growth of Digitalization

In the Middle East and Africa, several companies and governments have taken the initiative to invest in the development of smart cities. The development of smart cities is aiding the growth in digitalization and further driving the demand for data center construction.

Some smart city initiatives in the Middle East and Africa data center colocation market include the Dubai South project and Zayed Smart City Project. Several cities are being developed as smart cities, including Dubai, Abu Dhabi, Cape Town, Lagos, Nairobi, Bezeq, and others

5G Deployments Will Drive Edge Data Center Investments

The Middle East & African countries are working toward adopting digital transformation to attract foreign investments. 5G network deployment fuels the digital transformation, IoT, smart cities, and the fourth industrial revolution.

Some telecom operators in the Middle East & Africa have deployed 5G network services, and some are in 5G trials. The Middle East & African countries such as the UAE, Saudi Arabia, Oman, Kuwait, Bahrain, Qatar, and South Africa commercially deployed 5G network services

Turkey, Israel, Jordan, Lebanon, Iran, Nigeria, Kenya, Angola, and Uganda are other the Middle East & African countries in 5G planning and are yet to deploy commercial services during the forecast period. Rapid investments in 5G technology and their deployment will increase the number of connected devices, leading to the generation of a substantial quantity of data, thereby increasing investments in edge data centers in the Middle East and Africa data center colocation market

SEGMENTATION ANALYSIS

The colocation services segment in the Middle East and Africa data center colocation market is dominated by retail colocation with a market share of 67%. It is expected to grow with a CAGR of 10.99%; it is supported by construction from several local and global colocation operators.

Although the presence of cloud service providers is steadily growing, that is expected to boost the wholesale colocation in the region. Some countries in the market are witnessing growth in demand from cloud service providers. Hence, the wholesale colocation space is expected to grow at a higher CAGR during the forecast period

Most centers operating in the Middle East and Africa data center colocation market are adopting N+N redundant infrastructure, while most centers are designing facilities with space for installing up to 2N redundant UPS systems to cope with diverse feed designs of the facility and frequent power outages. In most Tier III facilities, UPS systems are adopted as N+1 redundant systems, while other facilities have installations of N+N UPS systems

Edge facility deployment will include single-phase lithium-ion UPS and monitored and switched PDUs. Therefore, emerging edge facilities will majorly boost the Middle East and Africa data center colocation market growth

REGIONAL ANALYSIS

The Middle East and Africa data center colocation market attracted investments from cloud service providers such as Google, Amazon Web Services, Microsoft, Oracle, and Tencent across the Middle East. Major cloud service providers are expanding their presence in the region during the forecast period, which drives the demand for wholesale colocation services in the region

Regarding investment, Abu Dhabi is the preferred location, with major investments from colocation, enterprise, and government entities. In 2021, Dubai witnessed investments from colocation service providers such as Equinix, Moro Hub, and Gulf Data Hub

The Kingdom of Saudi Arabia has implemented its Vision 2030 economic strategy to boost the technology sector. It plans to use 5G to support 45 million IoT devices, generating a market worth USD 12 billion. In Saudi Arabia, some significant drivers that complement the Middle East and Africa data center colocation market are cloud adoption, smart city developments, 5G network deployments, digitalization, and submarine cable connectivity investments

VENDOR LANDSCAPE

Major operators in the Middle East and Africa data center colocation market include Group 42, Equinix, Teraco Data Environments, Gulf Data Hub, STC, Turkcell, Africa Data centres, IXAfrica, Rack Centre, and others.

Vendors are increasing their presence in the Middle East & African countries, which is likely to boost revenue growth, primarily due to the increased construction of large data centers in countries such as UAE, Saudi Arabia, South Africa, and Israel.

The Middle East and Africa data center colocation market is expected to witness more mega data center constructions to cope with the expected growth in demand for wholesale colocation by cloud service providers, which will likely add revenue opportunities for infrastructure providers under their respective operating segments.

Many operators are also adopting units from different vendors to provide efficient cooling solutions for the facility. Several operators depend on local resellers and skilled local experts for installation, commissioning, and maintenance services. Several infrastructure providers in the market offer specific products or a complete range of infrastructure solutions suitable for data centers.

In the Middle East & Africa, the construction of data centers is increasing significantly, and greenfield data center development is growing YOY and witnessing a strong contribution from modular data centers in the region.

The Middle East and Africa data center colocation markets have global and local construction contractors and engineering and architectural firms. The growth in the market will provide opportunities for local sub-contracts in construction, engineering, and architectural verticals.

Market Dynamics

Market Opportunities & Trends

Edge Data Center Investments Fueled by 5G Deployment
Data Center Investments Driven by Smart City Initiatives
Submarine & Inland Cable Deployment
Adoption of Renewable Energy Sources

Market Growth Enablers

Data Center Investments Fueled by Big Data & Iot
Migration from On-Premise Infrastructure to Colocation & Managed Services
Deployment of Modular Data Centers
Covid-19 Impact on Data Center Investments

Market Restraints

Data Center Security Challenges
Dearth of Skilled Workforce
Location Constraints on Data Center Development

Prominent Support Infrastructure

4Energy
ABB
Airedale International Air Conditioning
Alfa Laval
Canovate
Caterpillar
Cummins
Delta Electronics
EAE Group
Eaton
EVAPCO
Enlogic
Enrogen
HITEC Power Protection
Johnson Controls
Legrand
Master Power Technologies
Rittal
Rolls-Royce
Schneider Electric
Shenzhen Envicool Technology
Siemens
STULZ
Vertiv

Prominent Construction Contractors

Abbeydale Projects
Advanced Vision Morocco
AECOM
Aldar Properties
Anel Group
Arup
ARSMAGNA
Ashi & Bushnag
Atkins
b2 Architects
CAP DC
Chess Enterprises
Copy Cat Group
Dar Group
DC Pro Engineering
Deerns
Eastra Solutions
Edarat
EDS Engineers
Egypro
EGEC
ENMAR Engineering
Harinsa Qatar
HATCO
HHM Building Contracting
Hill International
H&MV Engineering
ICS Nett
Ingenium Engineers
INT'LTEC Group
ISG
Interkel
JLB Architects
Laing O'Rourke
Linesight
M+W Group
Mace
Mercury Engineering
MWK Engineering
McLaren Construction
Orascom Construction
Prota Engineering
QSP
RED
Royal HaskoningDHV
RW Armstrong
Shaker Group
Sterling & Wilson
Summit Technology Solutions
Tri-Star Construction
Turner & Townsend
United Egypt
Westwood Management

Prominent Data Center Investors

Africa Data Centres
Bynet Data Communications
EdgeConneX
Equinix
Etisalat
Future Digital Data Systems (FDDS)
Group 42
Gulf Data Hub
Icolo.io
IXAfrica
Moro Hub
Meeza
MainOne (MDXi)
NTT Global Data Centers
Ooredoo
Paratus Namibia
Rack Centre
Raxio Data Centres
Turkcell
Telecom Egypt
Teraco Data Environments
Vantage Data Centers
Wingu
Zain

New Entrant

Infinity
Open Access Data Centres (OADC)

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

Segmentation by Tier Standard

Tier II
Tier III
Tier IV

For more information about this report visit https://www.researchandmarkets.com/r/m4most

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