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

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

About ResearchAndMarkets.com
ResearchAndMarkets.com is the world's leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.

Media Contact:

Research and Markets
Laura Wood, Senior Manager
[email protected] 
For E.S.T Office Hours Call +1-917-300-0470
For U.S./CAN Toll Free Call +1-800-526-8630
For GMT Office Hours Call +353-1-416-8900
U.S. Fax: 646-607-1907
Fax (outside U.S.): +353-1-481-1716

Logo: https://mma.prnewswire.com/media/539438/Research_and_Markets_Logo.jpg

SOURCE Research and Markets