Data Center - MENA

MENA

Revenue in the Data Center market is projected to reach US$10.74bn in 2024.
Network Infrastructure dominates the market with a projected market volume of US$6.91bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 6.28%, resulting in a market volume of US$14.56bn by 2029.
In global comparison, most revenue will be generated in the United States (US$123.20bn in 2024).

Key regions: United States, Germany, India, Japan, China

Definition:

The Data Center market is a critical segment of the technology industry focusing on supplying and managing physical infrastructure necessary for hosting and operating IT systems, primarily servers, storage, and network equipment. This market spans from traditional in-house data centers to sophisticated facilities offered by specialized providers, covering services like hosting, shared data center facilities, and managed data center solutions. It targets a diverse client base, ranging from small businesses to large enterprises, offering flexible, scalable solutions for their IT infrastructure needs. This sector is integral to the efficient functioning and security of IT operations in various organizations.

Structure:

The Data Center market is structured in three markets based on the services model provided by the companies.

The Server market covers the resources and services related to servers, integral for hosting websites, managing databases, and supporting cloud computing.
The Storage market covers the resources and services related to data storage systems, crucial for archiving, data backup, and ensuring data recovery.
The Network Infrastructure market covers the resources and services related to network hardware essential for ensuring connectivity, data transmission, and network security.

Additional Information:

The Data Center market includes revenue, revenue change, average spend per employee, and key player market shares as key performance indicators. Market values represent revenues paid to primary vendors at the manufacturer price level either directly or through distribution channels (excluding VAT). Revenues are generated through both online and offline sales channels and include spending by consumers (B2C), enterprises (B2B) as well as governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed.

Key players in the Data Center market include companies such as Dell, HPE, Huawei, and Ericsson.

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Market

Region

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Analyst Opinion

The MENA Data Center market has shown slow growth due to factors like limited infrastructure, high costs and insufficient investment. However, the trend towards digitalization and increasing data usage could drive growth in the sub-markets of servers, storage and network infrastructure.

Customer preferences: In the rapidly growing Data Center Market, there has been a noticeable shift towards cloud-based solutions and virtualization technologies. This trend is driven by the need for scalability, flexibility, and cost-effectiveness in managing data and applications. Additionally, the increasing use of software-defined networking (SDN) and network function virtualization (NFV) is changing the way businesses operate and manage their IT infrastructure. As a result, data center providers are adapting to these emerging preferences by offering more advanced and efficient solutions to cater to the evolving demands of their customers.

Trends in the market: In the MENA region, the Data Center Market is experiencing a rise in cloud adoption, with organizations shifting from traditional on-premises data centers to more agile and scalable cloud solutions. This trend is driven by the increasing demand for digital services and the need for cost-effective and efficient IT infrastructure. As a result, the data center market is expected to grow significantly in the coming years. This shift towards the cloud also has implications for industry stakeholders, including data center operators and cloud service providers who will need to adapt to this changing landscape and offer innovative solutions to meet the evolving needs of their customers.

Local special circumstances: In the MENA region, the Data Center Market is experiencing steady growth due to the increasing demand for cloud-based services and digital transformation initiatives across various industries. However, unique local factors, such as strict data privacy regulations and government control over internet infrastructure, can impact market dynamics. For example, in Saudi Arabia, the government's Vision 2030 plan has led to increased investments in data centers to support the country's digital economy. In contrast, in Egypt, a lack of regulation has hindered the market's potential, with concerns over data security and reliability.

Underlying macroeconomic factors: The growth of the Data Center Market market is heavily impacted by macroeconomic factors such as technological advancements, government support, and investment in IT infrastructure. Countries with strong regulatory frameworks and substantial investments in digital infrastructure are experiencing rapid market growth, while those with regulatory barriers and limited IT funding are lagging behind. Furthermore, the increasing adoption of cloud computing and big data analytics is driving the demand for data centers, as organizations seek to improve their competitive edge and optimize operational efficiency.

Methodology

Data coverage:

The data encompasses B2B enterprises. Figures are based on hardware-related expenses of businesses for setting up and maintaining an IT infrastructure.

Modeling approach / Market size:

Market sizes are determined through a top-down approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports and national statistical offices. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP and level of digitization. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques, such as exponential trend smoothing and the S-curve function, is based on the behavior of the relevant market.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.