Middle East Data Center Construction Market Report 2023: Rising Adoption of Renewable Energy Sources Bolsters Sector

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Research and Markets

Apr 17, 2023, 21:00 ET

DUBLIN, April 17, 2023 /PRNewswire/ -- The "Middle East Data Center Construction Market - Industry Outlook & Forecast 2023-2028" report has been added to  ResearchAndMarkets.com's offering.

The Middle East data center construction market is expected to growi at a CAGR of 7.59% during 2022 to 2028.

KEY HIGHLIGHTS

  • UAE and Saudi Arabia are the major contributors to the capacity in the Middle East data center construction market, with around 30% and 27%, and the market in these countries is expected to skyrocket in four to five years due to the shift of the oil economy to the digital economy in the region. Other factors include the continuous increase in investments in cloud-based services and smart city developments in the UAE and Kingdom of Saudi Arabia.
  • Digitalization across businesses will increase data center investments by colocation, cloud, Internet, and telecommunication providers. Some telecom companies such as Ericsson, stc, Turk Telecom, Cellcom, Zain, Nokia, Vodafone, Ooredoo, du, and Omantel are responsible for deploying and introducing 5G services in Middle Eastern countries.
  • The presence of industrial parks, the availability of land, and the government's support motivate data center operators to develop data centers in Middle Eastern countries. For instance, the Government of Bahrain announced the launching of its first data center park, which includes the development of its first data center by stc Bahrain through collaboration with the ministry of transport and Telecommunications.

MARKET TRENDS & DRIVERS
Rise in the Procurement of Renewable Energy Sources

  • The Middle East has an abundance of availability of solar energy, where most of the countries in the region are undertaking renewable energy strategies & visions to develop renewable energy projects and meet the carbon-neutral goals set by respective governments in the region.

a) In the UAE, the Energy Strategy 2050 aims to increase the share of renewable energy from 25% to 50% in the total energy mix by 2050.
b) Saudi Arabia has launched The National Renewable Energy Program (NREP) under Vision 2030, where 13 projects will generate over 4.8 GW of renewable energy. In addition, Bahrain plans to generate around 280 MW of electricity from renewable sources by 2025, increasing to around 700 MW by 2030 to attain national renewable energy targets.

  • In December 2022, Saudi Arabia announced the development of 10 renewable energy projects with a power capacity of 7 GW, which is part of the Kingdom's 2030 Vision.
  • In February 2022, Quantum Switch Tamasuk (QST) signed a deal with the Ministry of Communications and Information Technology (MCIT) Saudi Arabia to develop data center facilities in Saudi Arabia. Additionally, both parties will collaborate to secure and develop renewable energy sources to power their facilities.

Increasing Cloud Investments

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 the increase in investments by cloud service providers in the Middle East over the last few years.

  • Amazon Web Services aims to develop the infrastructure region in Tel Aviv, Israel, which will likely be operational in 2023.
  • In 2022, Google Cloud 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.

SEGMENTATION INSIGHTS

  • Most facilities 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.
  • In the Middle East data center construction market, the investment in cooling infrastructure contributes to the major share of more than 50% in the mechanical infrastructure due to the high temperature in some countries during the peak summers.
  • The region witnessed growth in the deployment of data centers in Tier III and Tier IV certification in the design phase/construction phase of the region. In contrast, most private and public entities (BFSI, education, government) have received Uptime Institute's Tier III/IV certification during the design phase or for the constructed facility.

Infrastructure

  • Electrical Infrastructure
  • Mechanical Infrastructure
  • General Construction

Electrical Infrastructure

  • UPS Systems
  • Generators
  • Transfer Switches & Switchgear
  • PDUs
  • Other Electrical Infrastructure

Mechanical Infrastructure

  • Cooling Systems
  • Racks
  • Other Mechanical Infrastructure

Cooling Systems

  • CRAC and CRAH Units
  • Chillers Units
  • Cooling Towers, Condensers, and Dry Coolers
  • Economizers & Evaporative Coolers
  • Other Cooling Units

Cooling Techniques

  • Air-Based Cooling
  • Liquid-Based Cooling

General Construction

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

Tier Standard

  • Tier I & Tier II
  • Tier III
  • Tier IV

GEOGRAPHICAL ANALYSIS

  • UAE dominates the regional industry in terms of data center developments. In addition, Saudi Arabia, Israel, and Oman are among the major contributors to high data center development activities in the Middle East. Qatar, Bahrain, and Kuwait are emerging markets that witness significant growth as a result of digitalization and growth in connectivity.
  • In the Middle East data center construction market, the presence of smart cities in the region also drives 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.

Geography

  • UAE
  • Saudi Arabia
  • Israel
  • Oman
  • Qatar
  • Kuwait
  • Jordan
  • Bahrain
  • Other Middle Eastern Countries

KEY MARKET PARTICIPANT INITIATIVES

  • The surge in data center activities across the country will be a major source of revenue for construction contractors. Some prominent local and global construction contractors in the Middle East data center construction market include AECOM, Laing O'Rourke, Dar Group, AlDar Properties, Mercury Engineering, Deerns, Anel Group, ENMAR Engineering, Arup, DC Pro Engineering, Edarat, HHM Building Contracting, and Red Engineering. For instance, Laing O'Rourke is selected by Khazna Data Centres to design and build a facility and office space in Dubai Design District.

Prominent Data Center Support Infrastructure

  • ABB
  • Airedale
  • Alfa Laval
  • 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 Contractors

  • AECOM
  • AlDar Properties
  • Anel Group
  • Arup
  • Ashi & Bushnag
  • Atkins
  • Dar Group
  • DC Pro Engineering
  • Deerns
  • Edarat
  • EGEC
  • ENMAR Engineering
  • Harinsa Qatar (HQ)
  • 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
  • Prota Engineering
  • Qatar Site & Power
  • RED Engineering
  • RW Armstrong
  • Sudlows
  • Telal Engineering & Contracting
  • Turner & Townsend

Prominent Data Center Investors

  • Adgar Investments and Development
  • Amazon Web Services (AWS)
  • Batelco
  • Bynet Data Communications
  • Equinix
  • EdgeConneX
  • Future Digital Data Systems (FDDS)
  • Gulf Data Hub
  • Google
  • Khazna Data Centers
  • Moro Hub
  • MedOne
  • MEEZA
  • Mobily
  • Microsoft
  • Oman Data Park
  • Ooredoo
  • stc
  • Turkcell
  • Turk Telekom
  • Telehouse
  • Tencent Cloud

New Entrants

  • Compass Datacenters
  • Digital Realty
  • Infinity
  • EDGNEX
  • Global Technical Realty
  • Quantum Switch
  • ZeroPoint DC
  • Serverfarm

KEY QUESTIONS ANSWERED:

1. How big is the Middle East data center construction market?
2. What is the growth rate of the Middle East data center construction market?
3. What factors drive the Middle East data center construction market growth?
4. What is the estimated market size in terms of area in the Middle East data center construction market by 2028?
5. Who are the new entrants in the Middle East data center construction market?
6. How many MW of power capacity is expected to reach the Middle East data center construction market by 2028?


Key Topics Covered:

1 Research Methodology

2 Research Objectives

3 Research Process

4 Scope & Coverage

5 Report Assumptions & Caveats

6 Premium Insights

7 Market at a Glance

8 Introduction

9 Market Opportunities & Trends
9.1 Rising Adoption of Renewable Energy Sources
9.2 Increase in 5G Deployments Fueling Edge Data Center Investments
9.3 Deployment of Submarine Cables and Inland Connectivity
9.4 Smart City Initiatives Driving Data Center Investments
9.5 Increase in Ai Adoption

10 Market Growth Enablers
10.1 Cloud Adoption Driving Data Center Investments
10.2 IoT & Big Data Fueling Data Center Investments
10.3 On-Premises Infrastructure Migrating to Colocation & Managed Services
10.4 Deployment of Modular Data Centers

11 Market Restraints
11.1 Security Challenges in Data Centers
11.2 Dearth of Skilled Workforce
11.3 Location Constraints on the Development of Data Centers
11.4 Supply Chain Disruptions in Data Centers

12 Market Landscape

13 Infrastructure

14 Electrical Infrastructure

15 Mechanical Infrastructure

16 Cooling Systems

17 Cooling Technique

18 General Construction

19 Tier Standards

20 Geography

21 Uae

22 Saudi Arabia

23 Israel

24 Oman

25 Qatar

26 Kuwait

27 Jordan

28 Bahrain

29 Other Middle Eastern Countries

30 Competitive Landscape

31 Prominent Data Center Support Infrastructure Providers

32 Prominent Data Center Construction Contractors

33 Prominent Data Center Investors

34 New Entrants

35 Report Summary

36 Quantitative Summary

37 Appendix

For more information about this report visit https://www.researchandmarkets.com/r/vj1xft

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