Middle-East Data Center Cooling - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

Middle-East Data Center Cooling - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

The Middle-East Data Center Cooling Market size is estimated at USD 421.40 million in 2024, and is expected to reach USD 943.80 million by 2029, growing at a CAGR of 16.80% during the forecast period (2024-2029).

The increasing demand for cloud computing among SMEs, government regulations for local data security, and growing investment by domestic players are major factors driving the demand for data centers in the region.

Under Construction IT Load Capacity: The upcoming IT load capacity of the Middle Eastern data center construction market is expected to reach 2,059.5 MW by 2029.

Under Construction Raised Floor Space: The region's construction of raised floor area is expected to increase 9.7 million sq. ft by 2029.

Planned Racks: The region's total number of racks to be installed is expected to reach 496K units by 2029. Saudi Arabia is expected to house the maximum number of racks by 2029.

The Middle East has a Mediterranean climate with hot, dry summers and mild, rainy winters. However, harsh winter conditions continue in the mountains of Iran and Iraq. Precipitation is generally meager, ranging from 350 mm to 750 mm annually. The region is known for being hot and dry. The choice of cooling technology is typically based on the geographic location of the data center.

Planned Submarine Cables: Close to 26 submarine cable systems are connecting the Middle East, and many are under construction. One submarine cable, Blue, is projected to begin service in 2024. It spans over 4,696 kilometers and has a landing point in Tel Aviv.

Middle-East Data Center Cooling Market Trends

The Information Technology Industry is Expected to Experience the Highest Growth

• To facilitate the transition to knowledge-based economies, the governments of the United Arab Emirates and Saudi Arabia are prioritizing digital initiatives such as 5G. With national consumer initiatives such as digital payments, smartphones are leading the transition to a digital lifestyle. The main drivers of this expansion were larger markets such as Iraq and Egypt, which continued to grow despite their huge current user bases. With the proliferation of smartphones and the use of 5G devices, the amount of raw data is expected to grow. More smartphone users can lead to increased data consumption and increased internet usage. The need for more data centers has increased the demand for cooling equipment in the region.
• The introduction of various OTT platforms and increased speeds will increase the demand for rack space, increasing the number of data centers, which will likely increase the demand for cooling equipment in the Middle East.
• Many large cloud providers have entered the region to take advantage of this greenfield market. This also increases the need for data center cooling. Additionally, local weather makes cooling solutions a priority for data centers.
• The dual impact of COVID-19 and plummeting oil prices had multiple economic implications across the Gulf region. Despite the economic slowdown, sectors of the economy, internet service providers (ISPs), information technology (IT), infrastructure providers, and data centers, are seeing increased demand, mainly due to the shift to telecommuting and remote work. This marks the growing demand for the data center cooling market in the region.
• The data center industry is starting to gain momentum with investments from cloud service providers such as Google and Oracle. In Saudi Vision 2030, Oracle partners with NEOM Tech & Digital Hold Co. to become the first tenant of NEOM's hyperscale data center. Oracle Cloud Infrastructure (OCI) is intended to provide a high-performance, resilient platform for cloud services housed in data centers and driving demand for cooling equipment.

Saudi Arabia to Hold the Highest Market Share

• Saudi Arabia has emerged as one of the technology hubs in the Middle East and Africa. As big IT and healthcare companies gain access to the market, demand for data centers in the region is soaring so that companies can store their data within borders.
• Additionally, Saudi Arabia's Vision 2030 goals have seen tech giants such as Google, Microsoft, and IBM build data centers and plan to expand their facilities.
• 4G usage is increasing due to social media and smartphone penetration. 4G service in the country is driven by high mobile video consumption. For example, 43% of smartphone users aged 16-29 watch on-demand video every week. About 62% of people watch videos using a smartphone or tablet. With almost 660 million 5G subscribers projected by the end of 2023, 5G is set to become the fastest mobile generation to date.
• Saudi Arabia's FTTH (fiber-to-the-home) broadband subscriber numbers have doubled due to the availability of high-speed internet plans, increased internet usage, expanded options, and quality services tailored to healthcare, business, and education. The growth in data storage has accompanied the expansion of data centers, increasing the need for data center cooling in this region.
• Customers in Saudi Arabia are spending more time and money online, increasing demand for e-commerce in the region. This increase is due to digital payment methods. As a result, 26% of Saudi consumers now use digital wallets for their transactions. In Saudi Arabia, 69-85% of online orders are cash on delivery, and e-wallets such as PayPal, Amazon Payments, and Google Wallet account for 24% of total turnover. The country's data centers will benefit from the digitization of the e-commerce sector as more data is processed and stored. Such incidents in the country are expected to boost demand for data center cooling manufacturers in the coming years.

Middle-East Data Center Cooling Industry Overview

The Middle Eastern data center cooling market is highly competitive and has many significant players, some dominating the market. Market penetration is growing with a strong presence of major players, such as Schneider Electric SE, Daikin Industries Ltd, Johnson Controls International PLC, Electric Corporation, and Munters Group AB in established markets. With the increasing focus on innovation, the demand for new technologies, such as liquid-based cooling and portable cooling technologies, is also growing, which, in turn, is driving investments for further developments in the region.

January 2023: ALEC, a UAE-based company, expanded its reach to Saudi Arabia with ALEC Data Center Solutions. The state-of-the-art data center infrastructure, utilizing cutting-edge liquid cooling technology, provides regional businesses with cloud services and data storage solutions.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support