Middle East & North Africa Data Center Market Report 2023-2028: Submarine Cables Boost Connectivity, Strategic Investments Transforming the Landscape

DUBLIN, Jan. 8, 2024 /PRNewswire/ -- The "Middle East & North Africa Data Center Market - Industry Outlook & Forecast 2023-2028" report has been added to  ResearchAndMarkets.com's offering.

The Middle East and North Africa data center market is expected to reach a value of $8.38 billion by 2028 from $5.04 billion in 2022, growing at a CAGR of 8.82% from 2022-2028

In the Middle East and North Africa data center market, the United Arab Emirates (UAE) and Saudi Arabia play significant roles, contributing around 30% and 27% to the regional capacity, respectively. It is expected that the market in these countries will experience growth over the next four to five years due to a shift from an oil-based economy to a more digital one. Additionally, Egypt is a critical player in North Africa, followed closely by Morocco. Factors such as adopting cloud-based services, developing smart cities, and expanding fiber connectivity drive continuous investments in regional data centers.

The UAE dominates the Middle East and North Africa data center market regarding data center developments. In addition, Saudi Arabia, Israel, Egypt, and Oman are among the major contributors, with high data center development activities in the Middle East and North Africa data center market. Qatar, Egypt, Morocco, and Kuwait are emerging markets that witness significant growth due to digitalization and growth in connectivity.

In the Middle East and North Africa data center market, the presence of smart cities in the region also drives investments. The UAE, Saudi Arabia, Kuwait, Morocco, and Egypt 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.

Due to the burgeoning data center activities, the Middle East and North Africa data center market is poised to offer significant revenue opportunities for construction contractors. Key players in this sector include AECOM, Laing O'Rourke, Dar Group, Mercury Engineering, Deerns, Anel Group, Linesight, M+W, McLaren Construction, Atkins, B2 Architects, ENMAR Engineering, Arup, DC Pro Engineering, Edarat, Sterling and Wilson, United Egypt, Westwood Management, HHM Building Contracting, Red Engineering, and Turner & Townsend. For example, Laing O'Rourke has been selected by Khazna Data Centers to oversee the construction of a data center and office space in the Dubai Design District.

Major global cloud service providers, including Amazon Web Services, Tencent, Microsoft, Google, Alibaba, Oracle, and Huawei Technologies, are in the Middle East and North Africa (MENA) data center market. For instance, Microsoft intends to establish a cloud region in Saudi Arabia.

The presence of industrial parks, available land, and government support incentivize operators to develop data centers in various Middle Eastern and African countries. For instance, the Bahrain government has announced the launch of its first data center park, with stc Bahrain collaborating with the Ministry of Transport and Telecommunications to develop the first data center within the park.

The Middle East and North Africa data center market is experiencing continuous growth in connectivity, 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, enhancing regional connectivity.

MARKET TRENDS & OPPURTUITNIES

Procurement of Renewable Energy

The Middle East and North Africa (MENA) data center market is experiencing a significant surge in adopting renewable energy sources. Numerous countries in this area have initiated renewable energy projects as part of their government's efforts to achieve carbon-neutral goals. For example, the United Arab Emirates (UAE) has set ambitious targets in its Energy Strategy 2050, intending to increase the proportion of renewable energy in its total energy mix from 25% to 50% by 2050.

Similarly, Saudi Arabia has launched the National Renewable Energy Program (NREP) under Vision 2030, encompassing 13 projects anticipated to generate over 4.8 gigawatts (GW) of renewable energy. Additionally, Bahrain has outlined plans to produce approximately 280 megawatts (MW) of electricity from renewable sources by 2025, to reach around 700 MW by 2030 to meet national renewable energy targets. Furthermore, Saudi Arabia's 2030 Vision includes developing ten renewable energy projects with a combined capacity of 7 GW, marking a significant step in the kingdom's renewable energy journey.

Rising Adoption of Artificial Intelligence

The Middle East and North Africa data center market is experiencing significant growth due to the increased adoption of advanced technologies like AI and ML. These technologies are becoming more prevalent in data centers, which are used to manage the power grid and electricity distribution more effectively. AI is crucial in helping operators determine the optimal times to generate, store, and use energy, offering the added advantage of remote power generation and distribution control.

In the Middle East and North Africa data center market, countries such as the UAE, Saudi Arabia, Egypt, and Morocco stand out as major players in AI adoption. For instance, the UAE government has developed a comprehensive strategy for AI integration as part of the Centennial 2071 project. This initiative focuses on applying AI-based technologies across various sectors, including healthcare, education, and aviation.

In Saudi Arabia, AI is expected to contribute significantly to the country's economy, with an estimated impact of over USD 130 billion, equivalent to 12% of the GDP. Similarly, the UAE anticipates AI to substantially contribute more than USD 95 billion to its economy by 2030, representing a 13.6% share of the GDP.

Bahrain is also actively investing in AI development through its Digital Strategy 2022, which aims to foster the growth of AI and its applications. As part of this strategy, Bahrain has established the AI Academy further to promote AI education and research within the country.

SEGMENTATION INSIGHTS

In the field of data center development, there is a widespread focus on achieving a Power Usage Effectiveness (PUE) rating of less than 1.5 for most facilities. However, in countries like Turkey, where partial free cooling is adopted during peak winter months, the aim is to achieve an even more efficient PUE of less than 1.3.

The Middle East and North Africa data center market is investing substantially in the power infrastructure, ensuring a minimum N+1 redundancy. In 2022, Uninterruptible Power Supply (UPS) systems held a significant market share, accounting for over 30% of the total electrical infrastructure in data centers.

Given the high-temperature climate in some countries within the Middle East and North Africa region, there is a notable emphasis on investing in cooling infrastructure. In 2022, more than 65% of the total mechanical infrastructure investment was directed toward cooling systems by service providers.

Market Opportunities & Trends

• Edge Data Center Investments Driven by 5G
• Procurement of Renewable Energy
• Deployment of Submarine Cables & Inland Connectivity
• Adoption of AI
• Data Center Investments Boosted by Digital Transformation

Market Growth Enablers

• Procurement of Cloud
• Data Center Investments Driven by IoT & Big Data
• Migration of On-Premises Infrastructure to Colocation & Managed Services
• Adoption of Prefabricated Data Centers

Market Restraints

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

VENDOR LANDSCAPE

Prominent Data Center IT Infrastructure Providers

• Arista Networks
• Atos
• Broadcom
• Cisco Systems
• Dell Technologies
• Hewlett Packard Enterprise (HPE)
• Huawei Technologies
• IBM
• Lenovo
• NetApp

Prominent Support Infrastructure Providers

• 4Energy
• ABB
• Airedale
• Canovate
• Caterpillar
• Cummins
• Delta Electronics
• EAE Group
• Eaton
• Envicool
• HITEC Power Protection
• Johnson Controls
• Legrand
• Rittal
• Rolls-Royce
• Schneider Electric
• Siemens
• STULZ
• Vertiv

Prominent Data Center Construction Constructors

• AECOM
• AlDar Properties
• Anel Group
• Arup
• Ashi & Bushnag
• Atkins
• Advanced Vision Morocco
• ARSMAGNA
• Dar Group
• DC Pro Engineering
• Deerns
• Edarat
• EGEC
• ENMAR ENGINEERING
• Harinsa Qatar
• HATCO
• HHM Building Contracting
• Hill International
• ICS Nett
• INT'LTEC
• ISG
• LAING O'ROURKE
• Linesight
• M+W Group (Exyte)
• Mace
• Mercury Engineering
• McLaren Construction Group
• MIS
• NDA Group
• Orascom Construction
• Prota Engineering
• Qatar Site & Power
• RED Engineering
• RW Armstrong
• Shaker Group
• Sterling and Wilson
• Summit Technology Solutions
• Sudlows
• Telal Engineering & Contracting
• Turner & Townsend
• United Egypt

Prominent Data Center Investors

• Africa Data Centres
• Adgar Investments and Development
• Amazon Web Services
• Batelco
• Bynet Data Communications
• Equinix
• Etisalat
• EdgeConneX
• Future Digital Data Systems
• G42
• Gulf Data Hub
• Google
• Khazna Data Centers
• Moro Hub
• MedOne
• MEEZA
• Mobily
• Microsoft
• Oman Data Park
• Ooredoo
• stc
• Serverfarm
• Turkcell
• Turk Telekom
• Telecom Egypt
• Tencent

New Entrants

• Compass Datacenters
• Digital Realty
• EDGNEX
• Global Technical Realty
• Infinity
• Quantum Switch
• ZeroPoint DC (NEOM)

SEGMENTATION

Segmentation by Infrastructure

• IT Infrastructure
• Electrical Infrastructure
• Mechanical Infrastructure
• General Construction

Segmentation by IT Infrastructure

• Server Infrastructure
• Storage Infrastructure
• Network Infrastructure

Segmentation by Electrical Infrastructure

• UPS Systems
• Generators
• Transfer Switches & Switchgear
• PDUs
• 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, and Dry Coolers
• Other Cooling Units

Segmentation by Cooling Technique

• Air-based Cooling
• Liquid-based Cooling

Segmentation by General Construction

• Core & Shell Development
• Installation & Commissioning Services
• Building & Engineering Design
• Physical Security
• DCIM/BMS Solutions

Segmentation by Tier Standard

• Tier I & II
• Tier III
• Tier IV

For more information about this report visit https://www.researchandmarkets.com/r/qe8kjt

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