Dublin, Dec. 21, 2022 (GLOBE NEWSWIRE) -- The "Middle East and Africa Data Center Colocation Market - Industry Outlook & Forecast 2022-2027" report has been added to ResearchAndMarkets.com's offering.
The Middle East and Africa data center colocation market is expected to grow at a CAGR of 8.68% during 2022-2027.
Some of the significant factors that are acting as a factor for the growth of the data center colocation market in the Middle East & Africa include increased digitalization initiatives across several countries, cloud service providers colocating the data centers, growth in connectivity, and others.
The market has witnessed the entry of several global colocation operators through the acquisition of local colocation operators. For instance, in August 2022, Digital Realty announced the completion of the acquisition of African colocation operator Teraco Data Environments. The region is witnessing significant initiatives for connectivity with growth in submarine cable deployments.
In the Middle East & Africa, Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait, Oman, Israel, Turkey, Lebanon, Yemen, Iran, South Africa, Egypt, Nigeria, Kenya, Morocco, and Djibouti are some of the countries with more submarine cable connectivity, which connects Americas, European, and Asian countries boosting the Middle East and Africa data center colocation market.
MARKET TRENDS
COVID-19 Impact on Data Center Investments
Due to the COVID-19 pandemic, the demand for data center services in the Middle East & Africa has increased with the heightened access to internet-related services aided by nationwide lockdowns imposed by governments in March 2020. Online shopping, even post-COVID-19, has increased the demand for online platforms compared to traditional shopping.
In Turkey, there was an 85% increase in online shopping YOY, and the e-commerce sector in Turkey expects to reach over USD 50 million by the end of 2021. For instance, Carrefour, a retail grocery company, witnessed a sales increase of around 50% in Q1 2020. Such factors are becoming a major contributor to the growth of the Middle East and Africa data center colocation market
Smart City Initiatives Across Several Countries Aiding the Growth of Digitalization
In the Middle East and Africa, several companies and governments have taken the initiative to invest in the development of smart cities. The development of smart cities is aiding the growth in digitalization and further driving the demand for data center construction.
Some smart city initiatives in the Middle East and Africa data center colocation market include the Dubai South project and Zayed Smart City Project. Several cities are being developed as smart cities, including Dubai, Abu Dhabi, Cape Town, Lagos, Nairobi, Bezeq, and others
5G Deployments Will Drive Edge Data Center Investments
The Middle East & African countries are working toward adopting digital transformation to attract foreign investments. 5G network deployment fuels the digital transformation, IoT, smart cities, and the fourth industrial revolution.
Some telecom operators in the Middle East & Africa have deployed 5G network services, and some are in 5G trials. The Middle East & African countries such as the UAE, Saudi Arabia, Oman, Kuwait, Bahrain, Qatar, and South Africa commercially deployed 5G network services
Turkey, Israel, Jordan, Lebanon, Iran, Nigeria, Kenya, Angola, and Uganda are other the Middle East & African countries in 5G planning and are yet to deploy commercial services during the forecast period. Rapid investments in 5G technology and their deployment will increase the number of connected devices, leading to the generation of a substantial quantity of data, thereby increasing investments in edge data centers in the Middle East and Africa data center colocation market
SEGMENTATION ANALYSIS
The colocation services segment in the Middle East and Africa data center colocation market is dominated by retail colocation with a market share of 67%. It is expected to grow with a CAGR of 10.99%; it is supported by construction from several local and global colocation operators.
Although the presence of cloud service providers is steadily growing, that is expected to boost the wholesale colocation in the region. Some countries in the market are witnessing growth in demand from cloud service providers. Hence, the wholesale colocation space is expected to grow at a higher CAGR during the forecast period
Most centers operating in the Middle East and Africa data center colocation market are adopting N+N redundant infrastructure, while most centers are designing facilities with space for installing up to 2N redundant UPS systems to cope with diverse feed designs of the facility and frequent power outages. In most Tier III facilities, UPS systems are adopted as N+1 redundant systems, while other facilities have installations of N+N UPS systems
Edge facility deployment will include single-phase lithium-ion UPS and monitored and switched PDUs. Therefore, emerging edge facilities will majorly boost the Middle East and Africa data center colocation market growth
REGIONAL ANALYSIS
The Middle East and Africa data center colocation market attracted investments from cloud service providers such as Google, Amazon Web Services, Microsoft, Oracle, and Tencent across the Middle East. Major cloud service providers are expanding their presence in the region during the forecast period, which drives the demand for wholesale colocation services in the region
Regarding investment, Abu Dhabi is the preferred location, with major investments from colocation, enterprise, and government entities. In 2021, Dubai witnessed investments from colocation service providers such as Equinix, Moro Hub, and Gulf Data Hub
The Kingdom of Saudi Arabia has implemented its Vision 2030 economic strategy to boost the technology sector. It plans to use 5G to support 45 million IoT devices, generating a market worth USD 12 billion. In Saudi Arabia, some significant drivers that complement the Middle East and Africa data center colocation market are cloud adoption, smart city developments, 5G network deployments, digitalization, and submarine cable connectivity investments
VENDOR LANDSCAPE
Major operators in the Middle East and Africa data center colocation market include Group 42, Equinix, Teraco Data Environments, Gulf Data Hub, STC, Turkcell, Africa Data centres, IXAfrica, Rack Centre, and others.
Vendors are increasing their presence in the Middle East & African countries, which is likely to boost revenue growth, primarily due to the increased construction of large data centers in countries such as UAE, Saudi Arabia, South Africa, and Israel.
The Middle East and Africa data center colocation market is expected to witness more mega data center constructions to cope with the expected growth in demand for wholesale colocation by cloud service providers, which will likely add revenue opportunities for infrastructure providers under their respective operating segments.
Many operators are also adopting units from different vendors to provide efficient cooling solutions for the facility. Several operators depend on local resellers and skilled local experts for installation, commissioning, and maintenance services. Several infrastructure providers in the market offer specific products or a complete range of infrastructure solutions suitable for data centers.
In the Middle East & Africa, the construction of data centers is increasing significantly, and greenfield data center development is growing YOY and witnessing a strong contribution from modular data centers in the region.
The Middle East and Africa data center colocation markets have global and local construction contractors and engineering and architectural firms. The growth in the market will provide opportunities for local sub-contracts in construction, engineering, and architectural verticals.
Market Dynamics
Market Opportunities & Trends
- Edge Data Center Investments Fueled by 5G Deployment
- Data Center Investments Driven by Smart City Initiatives
- Submarine & Inland Cable Deployment
- Adoption of Renewable Energy Sources
Market Growth Enablers
- Data Center Investments Fueled by Big Data & Iot
- Migration from On-Premise Infrastructure to Colocation & Managed Services
- Deployment of Modular Data Centers
- Covid-19 Impact on Data Center Investments
Market Restraints
- Data Center Security Challenges
- Dearth of Skilled Workforce
- Location Constraints on Data Center Development
Prominent Support Infrastructure
- 4Energy
- ABB
- Airedale International Air Conditioning
- Alfa Laval
- Canovate
- Caterpillar
- Cummins
- Delta Electronics
- EAE Group
- Eaton
- EVAPCO
- Enlogic
- Enrogen
- HITEC Power Protection
- Johnson Controls
- Legrand
- Master Power Technologies
- Rittal
- Rolls-Royce
- Schneider Electric
- Shenzhen Envicool Technology
- Siemens
- STULZ
- Vertiv
Prominent Construction Contractors
- Abbeydale Projects
- Advanced Vision Morocco
- AECOM
- Aldar Properties
- Anel Group
- Arup
- ARSMAGNA
- Ashi & Bushnag
- Atkins
- b2 Architects
- CAP DC
- Chess Enterprises
- Copy Cat Group
- Dar Group
- DC Pro Engineering
- Deerns
- Eastra Solutions
- Edarat
- EDS Engineers
- Egypro
- EGEC
- ENMAR Engineering
- Harinsa Qatar
- HATCO
- HHM Building Contracting
- Hill International
- H&MV Engineering
- ICS Nett
- Ingenium Engineers
- INT'LTEC Group
- ISG
- Interkel
- JLB Architects
- Laing O'Rourke
- Linesight
- M+W Group
- Mace
- Mercury Engineering
- MWK Engineering
- McLaren Construction
- Orascom Construction
- Prota Engineering
- QSP
- RED
- Royal HaskoningDHV
- RW Armstrong
- Shaker Group
- Sterling & Wilson
- Summit Technology Solutions
- Tri-Star Construction
- Turner & Townsend
- United Egypt
- Westwood Management
Prominent Data Center Investors
- Africa Data Centres
- Bynet Data Communications
- EdgeConneX
- Equinix
- Etisalat
- Future Digital Data Systems (FDDS)
- Group 42
- Gulf Data Hub
- Icolo.io
- IXAfrica
- Moro Hub
- Meeza
- MainOne (MDXi)
- NTT Global Data Centers
- Ooredoo
- Paratus Namibia
- Rack Centre
- Raxio Data Centres
- Turkcell
- Telecom Egypt
- Teraco Data Environments
- Vantage Data Centers
- Wingu
- Zain
New Entrant
- Infinity
- Open Access Data Centres (OADC)
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
Segmentation by Tier Standard
- Tier II
- Tier III
- Tier IV
For more information about this report visit https://www.researchandmarkets.com/r/560v95
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