The increased interest shown by local enterprise toward cloud-based services has increased the investment in the data center construction market by global cloud providers
Arizton’s recent market research report on the data center construction market in MEA provides comprehensive industry and competitive analysis and trend forecasts. The research study segments the market by electrical infrastructure (UPS systems, generators, transfer switches and switch gears, rack PDUs, and others electrical infrastructure), mechanical infrastructure (cooling systems, racks and other infrastructure), tier standards (Tier I&II, Tier III, and Tier IV), general construction (building design, building development, physical security, DCIM, installation and commissioning services), and countries (UAE, Saudi Arabia, South Africa, Nigeria, and others).
The data center construction market in MEA is likely to reach $1 billion, growing at a CAGR of over 9% during 2018−2014.
The research report offers market share analysis in terms of area (thousand sq.ft.) and power capacity (MW) during the forecast period. In the past, the Middle East data center market witnessed interest from leading cloud service providers such as Alibaba, AWS, and Microsoft. The UAE, Bahrain, South Africa, Nigeria, Kenya, and Saudi Arabia are leading in the data center construction market.
The leading three drivers and trends driving the data center construction market in MEA are discussed below:
Growing Application of Cloud Services driving Data Center Investments in MEA
The growing digitalization of business operations is driving the demand for cloud-based services in the Middle East and Africa. In terms of cloud computing, the market is still at its nascent growth stage. Cloud service providers such as Alibaba has established its presence by entering into a partnership with a local firm, Meraas Holding. Also, Microsoft has opened its South Africa cloud region. Amazon Web Service (AWS) is expected to open its Bahrain cloud region by mid-2019. The increased interest shown by local enterprise toward cloud-based services has increased the investment in the market by global cloud providers. Cloud service providers, especially SaaS vendors, will depend on colocation providers in the region. The BFSI sectors are currently piloting the migration from on-premise systems to the private cloud environment in Middle Eastern countries.
Government Agencies Contributing to Market Growth
The need to offer highly reliable data center services to end-users through advanced technologies such as cloud, big data, and IoT is growing among government agencies in the region. Many government bodies are investing in data centers to replace their legacy systems and migrate to the cloud environment as part of smart city initiatives. The UAE Ministry of Infrastructure upgraded its IT infrastructure to support smart government initiatives. In February 2018, the Finance Ministry of Algeria and Huawei partnered to build a data center for Algeria Customs. Governments across the region are likely to enforce and implement the data protection law during the forecast period. The Bahrain government is planning to reduce administrative cost by 30% through cloud-based service adoption.
Hyperscale Investment Imminent in MEA Region
The hyperscale data center market is mainly dominated by colocation providers, followed by internet and cloud service providers. The MEA market has witnessed the entry of major hyperscale providers such as Alibaba, Microsoft, and AWS in the past three years. Alibaba and SAP already operate the cloud region in the Middle East. Alibaba owing to the growing demand is planning to expand its presence by adding additional data centers. The development of the hyperscale colocation facility with over 10 MW of power capacity will attract several hyperscale operators to the region. Cloud-based SaaS applications will be a predominant driver to allure hyperscale investments to the market.
ALEC Engineering and Contracting, Atkins, Aveng Grinaker, Concor, Edarat Group, Etix Everywhere, Future-Tech, Harinsa Qatar, Huawei, ICS Nett, ISG, KAR Group, Laing O'Rourke, McLaren Construction Group, NOVA Mission Critical, QATAR SITE & POWER (QSP), and Red Engineering are the prominent data center construction contractors.
ABB, Caterpillar, Cummins, Eaton, Shenzhen Envicool Technology, EURO-DIESEL, Hitec Power Protection, Legrand Group, MTU Onsite Energy (Rolls-Royce Power Systems AG), Rittal, Schneider Electric, STULZ, and Vertiv are the prominent infrastructure providers.
Africa Data Centres, Amazon Web Service (AWS), Batelco, Equinix, Global Data Center, GPX Global Systems, Gulf Data Hub, icolo.io, Internet Solutions, Khazna Data Centers, Liquid Telecommunications, MainOne, Microsoft, Mobily, Ooredoo QSC, Telkom Kenya, Teraco Data Environments, and Turkcell are the prominent data center investors.
The complete overview of the latest market research report on the data center construction market in MEA by Arizton is now available.
The report offers a detailed study of major trends, drivers, challenges, and provides market sizing and forecast for major geographical regions and key countries.
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