Data centres booming in Africa and the Middle East - new report

A "Golden Age" is upon us.
Data, Data centre, Information, Tech, Services, Technology, Middle East, Africa, Industry, Business

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Image: Dubai's Palm Jumeirah as seen from the Princess Tower. Photo credit: Ben Mack

The Middle East and North Africa data centre colocation market is on the cusp of a boom phase, according to a new report by research and analytics firm Xalam Analytics.  

The report, titled “Cloud, Hyperscale, and the Golden age of MENA Data Centres” notes that MENA markets “are home to some of the highest levels of broadband penetration in emerging markets, financial markets with global reach and a theater for some of the most ambitious exercises in digital transformation in the modern world.” “But,” the research firm adds, “the data centre market hadn’t fully kept up. Until now.”

“Things are changing”, says Guy Zibi, Xalam Principal Analyst and one of the authors of the report. “We project MENA colocation supply capacity to nearly double between 2017 and 2020, with revenue exploding to a 20%-plus run rate over that period.”

The rapid growth, the report notes, “is fueled by an acceleration of consumer and enterprise cloud adoption, demand from managed services and content providers, increased enterprise data centre colocation and critically, the arrival of hyperscale Internet providers.”

In particular, the report highlights the impact of global Internet content and cloud providers, with at least nine public cloud data centers slated to become operational in the MENA region in 2019. “Hyperscale demand is a game-changer,” says Zibi. “It is transforming colocation business models, the market’s traditional competitive structure, and the very nature of the region’s data centre facilities.”

While demand from hyperscale and other providers are boosting deployments, the report stresses that “MENA colocation revenue will remain predominantly generated by enterprises, as more migrate their data centres to colocation facilities.”

Xalam Analytics also highlights key pockets of data centre demand. “Saudi Arabia and the United Arab Emirates are the region’s largest data centre colocation markets. Together, the two countries account for around 60% of MENA colocation capacity,” the research firm notes. “But we also see strong pockets of growth in Morocco, Oman, or Bahrain.”

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