According to the in-depth analysis and data-driven insights of Arizton, the Middle East data center market is expected to grow at a compound annual growth rate (CAGR) of around 7% between 2021−2026. This may lead to a $4.5 billion market size during the forecast period.
Among the key highlights stated in the report include the following:
- Increasing internet penetration and adoption of cloud and managed services due to COVID-19 has significantly driven the demand for data centers in the Middle East.
- Commercial deployment of 5G will kick off in Saudi Arabia, the United Arab Emirates (UAE), Bahrain, Qatar, Kuwait, and Oman by 2023, is anticipated to be deployed by Jordan, Egypt, Lebanon, Morocco, Palestine, Turkey, and Iran.
- The Middle East is increasingly becoming a hotspot for investment in renewable energy owing to the abundance of solar energy available in the region and is an emerging leader in microgrid capacity.
- The Saudi Authority for Data and Artificial Intelligence (SDAIA) has signed memorandum of understandings (MoUs) with IBM, Huawei, and Alibaba under The Kingdom of Saudi Arabia's Vision 2030 which includes building smart cities.
- There are an increasing number of modular data center facilities being built in the Middle East and can handle systems with a higher rack density.
Out of all the countries covered, Turkey, UAE, and Saudi Arabia are the three largest contributors to the Middle East data center market share. Moreover, Dubai is one of the most preferred locations for data centers in the UAE, followed by Abu Dhabi.
Within the Middle East, 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 data center market.
Furthermore, 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. Besides, the rapid investment in 5G technology and its deployment is leading to increased investments in data centers.
By and large, 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.