According to a recent report by Arizton, the Middle East data center construction market is projected to grow at a compound annual growth rate (CAGR) of 23.91% from 2024 to 2030.
- Market Size by Investment (2024): $1.93 billion
- Market Size by Investment (2030): $6.98 billion
- CAGR – Investment (2024-2030): 23.91%
- Market Size – Area (2030): 2,730 thousand square feet
- Power Capacity (2030): 646 MW
Market Overview
The Middle East data center construction market is expanding rapidly, driven by key regions such as the UAE and Saudi Arabia. Smart city initiatives in Abu Dhabi, Dubai, and Riyadh are fueling the demand for robust data infrastructure. The adoption of 5G networks, big data analytics, and AI technologies is further transforming urban ecosystems into sustainable environments.
Significant investments in advanced data center technologies, including innovative cooling solutions, are being made by major players such as Batelco, Mobily, Ooredoo, EdgeConneX, Equinix, Moro Hub, Khazna Data Centers, MedOne, and Gulf Data Hub. The market is expected to grow from 1.93billionin2024to6.98 billion by 2030, supported by government agencies, utility providers, and telecommunication companies enhancing inland and submarine network connectivity.
The region’s digital transformation, coupled with the growing demand for smart city technologies and increasing data needs across industries, is driving substantial investments in data center infrastructure.
Green and Sustainable Energy Adoption
The Middle East data center market is increasingly embracing green and sustainable energy solutions to address rising energy consumption and environmental concerns. Renewable energy sources, such as solar and wind power, are becoming viable alternatives to traditional energy, reducing carbon emissions and reliance on fossil fuels.
Green data centers are gaining traction, offering eco-friendly operations that align with global sustainability goals. Reducing energy costs is critical for the growth of data centers, and as environmental sustainability becomes a priority, green data centers are set to play a pivotal role in supporting digital advancements while minimizing environmental impact. Key operators like Equinix, Khazna Data Centers, Moro Hub, Gulf Data Hub, and Batelco are investing in efficient and sustainable operations. For instance, Khazna Data Centers in Abu Dhabi and Dubai utilize advanced cooling systems with high-temperature water and free cooling options.
The declining costs of renewable energy technologies, combined with government incentives, are making renewable energy more competitive. The region’s abundant sunlight and wind resources further enhance its potential for renewable energy generation, enabling data centers to reduce their carbon footprint while ensuring reliable power.
Tier I & Tier II Data Centers: Overview and Investment Forecast
Tier I data centers provide dedicated IT infrastructure to support workloads beyond standard office environments. They include essential components like backup generators, UPS systems, and HVAC/cooling systems. However, their single distribution path for power and cooling, without redundancy, makes them less resilient to disruptions.
Tier II data centers enhance Tier I capabilities by incorporating partial redundancy in power and cooling systems, allowing for selective maintenance and improved protection against IT failures. Despite this, Tier II facilities still rely on a single distribution path, leaving them vulnerable to unexpected outages. These data centers are often utilized by small and medium-sized enterprises (SMEs) seeking cost-effective yet reliable storage and computational solutions.
Over the past five years, the number of Tier I and Tier II data centers has declined due to increasing awareness of the need for redundant infrastructure. Tier II data centers, typically featuring N+1 redundancy, are primarily used for non-critical applications in on-premise environments by enterprises, educational institutions, government bodies, and banks.
Competitive Overview
The Middle East’s support infrastructure market is evolving rapidly, driven by economic growth and industrial diversification. Key players such as Airedale, ABB, Eaton, and Schneider Electric are leading the way with advanced mechanical and electrical solutions essential for sectors like data centers, energy, and construction.
The demand for mechanical systems, including HVAC, water supply, and fire safety, alongside electrical infrastructure to support renewable energy, is on the rise. Companies offering energy-efficient, low-carbon solutions are well-positioned to capitalize on the region’s sustainability push. However, challenges such as modernization needs, political uncertainty, and sustainability goals require collaboration, innovation, and stronger regulatory frameworks to ensure long-term growth and adaptability.
(Source: Arizton Research)
