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THE MIDDLE EAST DATA CENTER MARKET SIZE BY TO CROSS USD 4 BILLION BY 2026, GROWING AT A CAGR OF 7% DURING THE FORECAST PERIOD

Middle East Data Center Market Size, Share, Trends Analysis Report by IT Infrastructure (Servers, Storage, and Network); Electrical Infrastructure (UPS Systems, Generators, Transfer Switches and Switchgears, PDUs, and Other Electrical Infrastructures); Mechanical Infrastructure (Cooling Systems (CRAC & CRAH Units, Chiller Units, Cooling Towers, Dry Coolers, & Condensers, and Other Cooling Units), Racks, and Other Mechanical Infrastructure); Cooling Technique (Air-based Cooling and Liquid-based Cooling), General Construction (Core and Shell Development, Installation and Commissioning Services, Engineering and Building Designs, Physical Security, and DCIM/BMS); Tier Standards (Tier I & II, Tier III, and Tier IV); and Geography (Middle East); Industry Analysis Report, Regional Outlook, Growth Potential, Price Trends, Competitive Market Share & Forecast 2021–2026

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Most Exhaustive Report

263 Pages

31 Tables

81 Charts

1 Regions

5 Countries

33 Companies

6 Market Segment

MIDDLE EAST DATA CENTER MARKET REPORT SCOPE

Report Attribute Details
Market Size (Investment) USD 4 BILLION (2026)
Market Size (Area) 0.81 Million SQ. FT. (2026)
CAGR 7% (2021-2026)
Base Year 2020
Forecast Year 2021-2026
Market Segments IT Infrastructure (Servers, Storage, and Network); Electrical Infrastructure (UPS Systems, Generators, Transfer Switches and Switchgears, PDUs, and Other Electrical Infrastructures); Mechanical Infrastructure (Cooling Systems (CRAC & CRAH Units, Chiller Units, Cooling Towers, Dry Coolers, & Condensers, and Other Cooling Units), Racks, and Other Mechanical Infrastructure); Cooling Technique (Air-based Cooling and Liquid-based Cooling); General Construction (Core and Shell Development, Installation and Commissioning Services, Engineering and Building Designs, Physical Security, and DCIM/BMS); Tier Standards (Tier I & II, Tier III, and Tier IV)
Geographic Analysis Middle East
Countries Covered UAE, Jordan, Saud Arabia, Turkey, and Other Middle Eastern Countries

MIDDLE EAST DATA CENTER INDUSTRY INSIGHTS

The Middle East data center market size was valued at USD 3 billion and is expected to reach USD 4.5 billion by 2026, representing a CAGR of 7% during the forecast period. The data center market has observed a steady growth due to the outbreak of the COVID-19 pandemic, resulting in heightened access to internet-related services aided by nationwide lockdowns and restrictions. IoT-enabled devices witnessed high acceptance for monitoring and surveillance purposes, especially in the healthcare sector, during the pandemic. Government agencies have also contributed to the growth of cloud-based services in the Middle East. In Kuwait, the Ministry of Health (MoH), the Central Agency for Information Technology (CAIT), collaborated with Zain to launch an application – Shlonik to monitor citizens that have returned to the country. The growing adoption of cloud, IoT, big data in the wake of the COVID-19 has increased colocation investments in the region. Cloud, social media, and video conferencing service providers have contributed majorly to data generation.  Many enterprises operating in the cloud are migrating to colocation data centers to operate hybrid infrastructure services.

SNIPPETS

  • The Middle East market is expected to witness increased investments in greenfield and modular data centers.
  • All-flash and hybrid storage arrays are likely to dominate the storage devices market, with traditional storage systems powered by HDDs contributing to the market share.
  • The adoption of 500–1,500 kVA UPS systems is expected to be high during the forecast period. UPS systems accounted for around 30% of the electrical infrastructure in data centers in 2020.
  • The Middle East IT infrastructure market expects to grow due to data generation growth, fueling the adoption of fast processing and efficient server and storage devices.
  • The Middle East data center electrical infrastructure market is likely to grow at a CAGR of approximately 8% on account of the high adoption of lithium-ion batteries, fuel cell technology, and intelligent PDUs.

MIDDLE EAST DATA CENTER MARKET SEGMENTATION

This research report includes a detailed segmentation by:

  • IT Infrastructure 
  • Electrical Infrastructure 
  • Mechanical Infrastructure
  • Cooling Technique   
  • Cooling Systems
  • General Construction    
  • Tier Standards 
  • Geography 

INSIGHTS BY IT INFRASTRUCTURE

The Middle East IT infrastructure market expects to grow at a CAGR of over 6% during 2020–2026. The server market is shifting slowly from rack-based to blade servers to support a high-density operating environment. This is because of the increased usage of IoT, big data analytics, artificial intelligence, and machine learning by enterprises across the Middle Eastern market. Enterprises prefer servers that can reduce space in the data center environment without affecting performance.

The Middle East storage market is expected to cross over USD 1 billion by 2026. The demand for faster storage solutions has increased due to high data generation in the last few years. The increasing usage of social media platforms in the region will lead to new data centers to store the data, which increases the demand for high-capacity storage solutions. 

INSIGHTS BY ELECTRICAL INFRASTRUCTURE

The UPS market in the Middle East anticipates to cross USD 89 million during the forecast period. There has a steady rise in the deployment of edge computing; also, colocation operators are investing in the region, which increases the demand for high-capacities UPS in the region. The use of 750−1,500 kVA systems has witnessed high adoption along with less than 500 kVA UPS systems. The adoption of lithium-ion batteries is also likely to increase during the forecast period as the price of these batteries is expected to decline during the forecast period.

The generators market in the Middle East is likely to grow at a CAGR of approx. 8% during 2020–2026. The construction of large facilities is driving the demand for generators in the Middle East. Instability in the power grid in the region is the major factor for the deployment of high-capacity generators. However, service operators are increasingly opting for renewable energy sources to power their sites, which is likely to decline generators' use. The growing complexity of data center infrastructure is propelling the growth of automated switchgear technology. With the increased construction of data centers across the Middle East, the market for transfer switches & switchgear is expected to grow during the forecast period.

INSIGHTS BY MECHANICAL INFRASTRUCTURE

Cooling systems, including water-cooled chillers, CRAH, and cooling towers, are installed with N+20 redundancy in the Middle East region. Most facilities in the region design to cool servers via water-based cooling techniques. The growing construction of data centers in the UAE is a key factor in developing multiple chillers, cooling towers, and CRAH units.  In Saudi Arabia, data centers' construction will increase the adoption of multiple chillers, cooling towers, and CRAH units. Newly constructed data center facilities will use advanced air-based cooling techniques because of the high temperature. Data centers in Turkey adopt CRAC & CRAH units and chiller units. In terms of redundancy, most operators use N+1 and N+2 cooling redundancy. Besides, operators are likely to deploy dual water feed for efficient and uninterruptable operations.

INSIGHTS BY GENERAL CONSTRUCTION

Brownfield development is more cost-effective than greenfield development in the Middle East. In the Middle Eastern region, data center commissioning service providers follow standard operating procedures, depending on the depth of commissioning required in the facility. The Middle East data center market is mostly dominated by small data centers with less than 15 MW power centers. The building & engineering design market is expected to reach over USD 32 million in 2026, growing at a CAGR of approx—7%. The increasing demand for reliable, efficient, and flexible building infrastructure among service operators is expected to influence its growth. The adoption of physical security apparatus is increasing to protect the data and information. BFSI, telecommunication, and healthcare are the most vulnerable sectors for intrusions and breaches. Sensors and video cameras are installed for surveillance in data centers in the region. The use of artificial intelligence and machine learning in the data center is driving the DCIM solutions market. DCIM solutions improve efficiency, monitor power consumption, and predict system failures. They are becoming a major part of data center operations as they monitor critical elements such as power, cooling, and IT infrastructure.

INSIGHTS BY TIER STANDARDS

Most data centers in the UAE are Tier III certified or built according to Tier III standards.  Several data centers in Saudi Arabia are built according to Tier III or Tier IV standards and have a minimum redundancy of N+1 in power and cooling infrastructure. Tier III data centers are equipped with UPS systems redundancy of N+1.  The majority of modern data centers in Turkey are developed according to Tier III standards, with a minimum of N+1 redundancy in power infrastructure. A few data centers operate 2N power infrastructure or have additional capacity to commission 2N infrastructure solutions based on the customer’s demand. Most developments in Turkey are greenfield projects, whereas modular data centers are confined to enterprise on-premises deployments.

INSIGHTS BY GEOGRAPHY

Turkey, UAE, and Saudi Arabia are the three largest contributors to the Middle East data center market share. The rising adoption of cloud-based services leads to the growth of retail and wholesale colocation services in the UAE. The market is witnessing an increase in the demand for colocation spaces across existing and upcoming data centers. The rapid investment in 5G technology and its deployment is increasing investments in data centers. Dubai is one of the most preferred locations for data centers in the UAE, followed by Abu Dhabi. Similarly, Saudi Arabia is observing rapid digitalization and automation of business activities. In 2020, over 75% of companies implemented IoT in their applications. The internet penetration in Saudi Arabia was around 95% in 2020. Enterprises across various industries such as banking, financial services, insurance, IT & telecommunications, energy & utilities, media & entertainment, and manufacturing have adopted cloud services, thereby driving the market.

INSIGHTS BY VENDORS

Arista Network, AWS, Atos, Broadcom, Cisco Systems, and Dell Technologies are among the major IT vendors expanding their presence in the Middle East region. They have a strong physical presence in the region and are the major adopters of high-density, mission-critical servers, storage infrastructure, and network infrastructure. Vendors are focusing on sustainable data centers. They procure renewable energy sources in partnership with local service providers. Construction and design are critical for data center operators because they need to adhere to the Uptime standards.

The Middle East data center market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments:

By IT Infrastructure 

  • Servers
  • Storage
  • Network

By Electrical Infrastructure 

  • UPS Systems
  • Generators
  • Transfer Switches and Switchgears
  • PDUs
  • Other Electrical Infrastructures

By Mechanical Infrastructure

  • Cooling Systems
    • CRAC & CRAH Units
    • Chiller Units
    • Cooling Towers, Dry Coolers, & Condensers
    • Other Cooling Units
  • Racks
  • Others Mechanical Infrastructure

By Cooling Technique    

  • Air-based Cooling Technique
  • Liquid-based Cooling Technique

By General Construction    

  • Core and Shell Development
  • Installation and Commissioning Services
  • Engineering and Building Designs
  • Physical Security
  • DCIM/BMS

By Tier Standards 

  • Tier I & II
  • Tier III
  • Tier IV

By Geography

  • Middle Eastern Countries
    • UAE
    • Saudi Arabia
    • Jordan
    • Turkey
    • Other Middle Eastern Countries

Frequently Asked Questions

The Middle East data center market by investment is expected to reach USD 4 billion by 2026.
An increase in smart city initiatives and high investments are major factors driving the Middle East data center market.
Rapid development in network connectivity, government support, and growth in the adoption of cloud, big data, and IoT services are strong drivers of increasing growth opportunities in the UAE data center market.
The Middle East data center market is likely to grow at a CAGR of 7% during 2020–2026.
The outbreak of the COVID-19 pandemic, which is driving the demand for big data, IoT, and cloud computing is a major factoring enabling the growth of colocation services in the region.
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