Middle East and Africa Data Center Colocation Market - Industry Outlook & Forecast 2023-2028

Middle East and Africa Data Center Colocation Market - Industry Outlook & Forecast 2023-2028

The Middle East and Africa data center colocation market is expected to grow at a CAGR of 8.11% from 2022-2028.

KEY HIGHLIGHTS

• 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 market in these countries is expected to skyrocket in four to five years due to the shift from the oil economy to the digital economy in the region. In addition, South Africa is the major contributor to the capacity in Africa, with more than 60%; Nigeria and Kenya follow South Africa. Cloud-based services, smart city developments, and fiber connectivity are other factors driving continuous colocation data center investments across the region.
• The major global cloud service providers in the Middle East and Africa data center colocation market include Amazon Web Services, Tencent, Microsoft, Google, Alibaba, Oracle, and Huawei Technologies. For instance, the Oracle cloud region is co-located in Mobily Jeddah, Saudi Arabia.
• The Middle East & African market grows continuously in terms of connectivity by deploying new submarine cables such as Africa-1, 2Africa, India Europe Xpress (IEX), Raman, Saudi Vision, Blue, Equiano, Medusa Submarine Cable System, and SeaMeWe – 6, which are expected to be ready for services during the forecast period.
• The deployment of 5G technology in the Middle East & Africa is anticipated to profoundly impact the Middle East and Africa data center colocation market. As 5G enables faster internet connectivity, wider bandwidth, and reduced processing time, it is expected to generate substantial data. This surge in data volume will drive the need for increased investments in regional facilities. Several countries, including the UAE, Saudi Arabia, South Africa, Oman, Kuwait, Bahrain, Kenya, Nigeria, and Qatar, have already commercially launched 5G network services. Meanwhile, countries such as Turkey, Israel, Ethiopia, Algeria, Ghana, Jordan, Lebanon, and Iran are in the planning phase for 5G deployment. They are yet 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.

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.

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

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 by Geography

• Middle East
• UAE
• Saudi Arabia
• Israel
• Oman
• Qatar
• Kuwait
• Jordan
• Bahrain
• Other Middle Eastern Countries
• Africa
• South Africa
• Kenya
• Nigeria
• Egypt
• Ethiopia
• Other African Countries

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.

I. 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.

II. 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.

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
• Türk 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

KEY QUESTIONS ANSWERED:

1. How big is the Middle East and Africa data center colocation market?

2. What is the growth rate of the Middle East and Africa data center colocation market?

3. What is the estimated market size in terms of area in the Middle East and Africa data center colocation market by 2028?

4. What are the key trends in the Middle East and Africa data center colocation market?

5. How many MW of power capacity is expected to reach the Middle East and Africa data center colocation market by 2028?