Data Center

Revenue in the Data Center market is projected to reach US$1.72bn in 2024.
Network Infrastructure dominates the market with a projected market volume of US$1.29bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 5.69%, resulting in a market volume of US$2.27bn by 2029.
In global comparison, most revenue will be generated United States (US$123.20bn in 2024).

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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Network Infrastructure, such as Cisco Routers and Switches, and Arista Network Ethernet Switches
Infrastructure Firewalls, such as Palo Alto Network Next-Generation Firewall, and Fortinet FortiGate Firewalls
Servers, such as Dell PowerEdge Servers, HPE ProLiant Servers, and IBM Power Systems
Storage, such as Dell EMC Storage Solutions, and NetApp Data Storage Systems

IT Infrastructure for Private Environments, such as VMware vSphere, and Cisco UCS
Software, such as Microsoft Windows Server, and Red Hat Enterprise Linux
Cloud Hosting Services, such as AWS, Microsoft Azure, and GCP
Network Infrastructure Services, such as IT Support Services, and Home Internet Services Providers (ISPs)

The Data Center market in Saudi Arabia is experiencing subdued growth, influenced by factors such as the increasing adoption of digital technologies, growing awareness of the importance of data storage and security, and the convenience of online services. These factors impact the sub-markets of Servers, Storage, and Network Infrastructure, leading to a slower overall growth rate.

Customer preferences: The growing adoption of cloud computing and data storage solutions has led to an increase in demand for data center services in Saudi Arabia. As more businesses and organizations shift towards digital operations, there is a significant rise in the need for reliable and secure data storage and management. This trend is also driven by the government's push towards digital transformation and the growing use of emerging technologies such as artificial intelligence and Internet of Things.

Trends in the market: In Saudi Arabia, the Data Center Market is experiencing a surge in demand for cloud services, with more businesses adopting digital transformation strategies. This trend is driven by the country's Vision 2030 plan, which aims to diversify the economy and promote technological advancement. In addition, there is a growing trend towards green data centers, with a focus on reducing carbon emissions and increasing energy efficiency. These trends present significant opportunities for industry stakeholders, such as data center operators and cloud service providers, to expand their offerings and tap into the growing market. However, they also come with potential implications, such as increased competition and the need for robust infrastructure to support the growing demand for data center services.

Local special circumstances: In Saudi Arabia, the Data Center Market is heavily influenced by the country's strategic location as a gateway between Asia, Europe, and Africa. This makes it a prime location for international businesses looking to expand into the region. Additionally, the country's strict data privacy laws and regulations play a significant role in shaping the market. This has led to a growing demand for secure and compliant data center facilities, specifically in the financial and healthcare sectors. The country's strong focus on digital transformation and smart city initiatives has also contributed to the growth of the Data Center Market, with an increasing need for reliable and efficient data storage and management solutions.

Underlying macroeconomic factors: The Data Center Market in Saudi Arabia is heavily influenced by macroeconomic factors such as the country's strong economic growth, high government spending on digital infrastructure, and supportive policies for technology development. Additionally, the rising demand for cloud services and data storage solutions, both domestically and globally, is driving the growth of the data center market in Saudi Arabia. The country's strategic location and favorable business environment also make it an attractive destination for international companies looking to establish their data centers. Moreover, with the increasing adoption of digital technologies in various industries, the demand for data centers in Saudi Arabia is expected to continue to grow in the coming years.

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.

This report presents a comprehensive analysis and additional information on the Technology market, in a PDF format.

Although data centers may not make front page news, they serve a critical role as the infrastructure powering the most exciting developments in tech. While data centers were once known as small rooms housed on-site by business users, they have increasingly become extensive, centralized facilities managed by multinational operators. Many organizations rent data center capacity from a so-called colocation provider such as Equinix or Digital Realty, while others subscribe to cloud subscription services to take care of their storage and compute requirements. The global market was forecast to bring in 344 billion U.S. dollars in 2024, propelled by the adoption data intensive technologies.