{"id":78524,"date":"2024-05-14T00:00:00","date_gmt":"2024-05-14T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/logistics\/2024\/05\/14\/the-regional-data-center-market-is-primed-for-substantial-growth\/"},"modified":"2024-05-14T00:00:00","modified_gmt":"2024-05-14T00:00:00","slug":"the-regional-data-center-market-is-primed-for-substantial-growth","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/logistics\/2024\/05\/14\/the-regional-data-center-market-is-primed-for-substantial-growth\/","title":{"rendered":"The regional data center market is primed for substantial growth"},"content":{"rendered":"

<\/strong>MENA is the next frontier for data center growth: <\/strong>The MENA region is poised to develop into one of the fastest growing markets for data centers in the coming years, with ballooning demand and so-far limited supply, according to JLL\u2019s The Future of Data Centers in MEA 2023 report (pdf)<\/a>. There are currently 73 colocation facilities across the UAE, KSA, Qatar, Oman, and Kuwait. Colocation facilities are specialized data centers where organizations can rent space for their servers, network equipment, and other hardware, the report says.<\/p>\n

The region is primed for the expansion: <\/strong>The MENA region's growing digital transformation, including 5G and IoT, along with increased investment in submarine cables and fiber connectivity, is driving a surge in data demand. This resulted in investor interest in expanding data center operations, heralding a new era of growth in the upcoming decade.<\/p>\n

UAE plays an important role: <\/strong>The UAE data center market has seen substantial growth in recent years, emerging as a key digital infrastructure hub in the region, according to Knight Frank\u2019s Data Centers The MENA report (pdf)<\/a>. The establishment of Dubai Internet City (DIC) in October 2000 was a turning point, pulling in innovative technology companies to the country. Subsequent government initiatives, including tax incentives and regulatory frameworks, further fueled the industry's growth. During the 2010s, international data center providers entered the market, improving the quality and global connectivity of data center services.<\/p>\n

The UAE\u2019s supply in 3Q 2023:<\/strong> Between the start of the year and 3Q 2023, the UAE saw a 64 MW increase in aggregate supply, with half translating into additional live IT capacity. This marks a 12.1% rise in aggregate supply and a 15.3% growth in live IT capacity. The country now boasts a total IT capacity of 592 MW, with 235.3 MW live and 180.3 MW under construction.<\/p>\n

KSA is the region\u2019s fastest-growing data center market: <\/strong>The Kingdom saw a 29.7% surge in live IT capacity between the beginning of 2023 and 3Q 2023, achieving 109 MW capacity, Knight Frank said. The data center market is primarily centered around three main hubs \u2014 Riyadh, Jeddah, and Dammam \u2014 which together host some 80% of live IT supply. Riyadh leads with 40 MW capacity, followed by Jeddah at 29 MW, and Dammam at 19 MW.<\/p>\n

MENA data center market: <\/strong>The UAE hosted 28 operational data centers as of 2023, with an additional 26 in development, JIL says. KSA has 22 active data centers and is developing another 40, while Qatar holds 10 and is set to see 3 upcoming data centers. Oman operates 7 centers, with 5 in development and Kuwait hosts 6 operational data centers with 1 in the pipeline. <\/p>\n

Beyond key markets: <\/strong>The MENA region is also seeing increased interest in data center development in countries such as Bahrain, Jordan, Kuwait, Lebanon, Oman, and Qatar. These countries are strategically positioning themselves as regional technology hubs, supported by government initiatives, cloud-first policies, and partnerships with global tech giants, driving significant growth in their data center markets. Together, these nations boast a combined live IT capacity of 101.17 megawatts (MW) in 3Q 2023, Knight Frank also said. <\/p>\n

Egypt is leveraging its location as a regional crossroads:<\/strong> Egypt\u2019s strategic location as a portal between Europe, Africa, and the Middle East has also seen the country come forth as a leading destination for investments in data centers, Knight Frank adds. Growing demand for cloud services, digital transformation, and the expansion of e-commerce and mobile technologies are also driving growth in the country\u2019s data center sector. The country has some 13 MW of live IT as of 3Q 2023, with pipelines that could see that number boosted by a factor of ten. Tap or click here to read Enterprise Egypt\u2019s deep dive<\/a><\/strong> into what\u2019s being done to make Egypt a hub for green data centers.<\/strong><\/p>\n

Factors fueling data center demand in the MENA region: <\/strong>A boost in urbanization has driven demand for data centers in the region, with expanding urban areas standing as focal points for economic growth, JIL says. As online participation increases, the demand for efficient data storage, processing power, and network connectivity continues to rise. Data centers offer the necessary infrastructure to accommodate the increasing data traffic generated by a growing population. The region is also undergoing rapid digitalization, in terms of smart cities, e-commerce, telemedicine and industry.<\/p>\n

An increase in the internet economy is also driving the need for data centers, <\/strong>along with a boost in mobile and internet penetration. The MENA region, in particular, has witnessed a rise in mobile and internet penetration rates, pushing demand for data centers upwards. <\/p>\n

Regulatory Landscape: <\/strong>Data privacy regulations, data sovereignty regulations, and compliance frameworks all impact the future of data centers within the MENA region. The UAE, for example, has implemented the \u201cNational Cyber Security Strategy\u201d to boost the nation\u2019s cybersecurity ecosystem. <\/p>\n","protected":false},"excerpt":{"rendered":"

The region is expected to become one of the fastest growing markets for data centers in upcoming years<\/p>\n","protected":false},"author":1,"featured_media":78525,"comment_status":"","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[302],"tags":[212,39,160,300,142,153,31,301,129],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-78524","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-big-read","tag-bahrain","tag-jordan","tag-kuwait","tag-mena","tag-oman","tag-qatar","tag-saudi-arabia","tag-the-big-read","tag-uae","wpautop","entry"],"acf":{"mongo_id":"1207d1b0-773c-4dc4-9807-46a6af653d4b","order":"4","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/4\/177.jpg","photo_position":"above","homepage_title":"","full_issue_title":"The regional data center market is primed for substantial growth","related_issue":[78517],"teaser":"The region is expected to become one of the fastest growing markets for data centers in upcoming years","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2024\/5\/.8ec2b36b-82f1-4aa2-b7d9-b2680b6ea72c.mp3"},"yoast_head":"\nThe regional data center market is primed for substantial growth - 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