Data centres in the Middle East

Despite COVID-19, the Middle East data centre market has remained buoyant during 2020 and is predicted to grow at a compound annual growth rate of around seven percent up until 2024.

Increasing operational business requirements are prompting enterprises to migrate from on-premises, server room operations to data centre services including managed, colocation, and hybrid facilities.

Smart city initiatives in key Middle Eastern countries, such as the UAE and Kingdom of Saudi Arabia (KSA), are driving the uptick in data centre demand by encouraging digital innovations.

Businesses across the Middle East are rapidly adopting new technologies, such as 5G, artificial intelligence and machine learning as part of their digital transformation strategy. Adoption of these technologies is driving an increase in data volume and network bandwidth requirements.

It is estimated that more than 70 percent of Middle East companies will have multi-cloud environments in place in the next two years and there is a prediction of a significant increase in investment by public cloud service providers.

Construction market conditions

The UAE data centre market has witnessed the most activity during 2020. Global end-user demands from the likes of Microsoft, Google, Huawei, Amazon and government bodies such as telecommunications and banking organisations are engaging data centre developers such as Equinix, Global Data Centre, Batelco, Gulf Data Hub, Amazon Web Services (AWS), and Khazna to support their growing presence and footprint in the region.

KSA continues to develop its data centre market supported by the Kingdom’s huge investment portfolio across many industries and in particular technology and manufacturing. The development of “industrial cities” will fuel demand for cloud services.

The Middle East data centre market benefits from availability of both local and global data centre contractors. However, the market still lacks a strong, local skilled workforce to accommodate the growing need for data centre operational personnel.

2021 outlook

Regional demand for data centres will continue to grow rapidly during 2021, with investment focused on the UAE and KSA. Global and regional based end users will continue to expand their cloud services in the two largest Arab economies, which are pouring a huge amount of investment into smart city infrastructure.

For further information contact:

David Hancox
e: [email protected]
t: +971 2 441 0955