Research has revealed that the Middle East data center market is likely to grow at a CAGR of around 7% during the period 2020 to 2026. The recent report from Research and Markets discloses this growth due to the outbreak of the COVID-19 pandemic, resulting in heightened access to internet-related services aided by nationwide lockdowns and restrictions. The pandemic has underlined the important role of data centers not only in ensuring that IT companies function but also the daily lives of ordinary users.
The growing volume of big data generated is primarily driven by the growing adoption of cloud, IoT, automation, Artificial Intelligence, and data usage with the ongoing move to 5G infrastructure, the adoption of smart city initiatives, and advances in technology, e-government, and e-commerce. Cloud, social media, and video conferencing service providers have also contributed majorly to data generation.
The increased automation and the use of new technologies elicit a burst of enterprise data. To meet the surge for cloud services and hyperscale demands, a data center providers must ensure speed-to-market, flexibility, and scalability.
The Middle East is on the path of rapid cloud growth in the coming years. Various governmental initiatives across the region reinforces how promising the cloud landscape in the Middle East will likely be in the foreseeable future. Initiatives include; New Kuwait 2035’s nationwide digital roadmap and the UAE Vision 2021 towards a fully digitalized society, Bahrain’s Cloud First utilizing cloud computing services and $18 billion plan to build a network of large-scale data centers across the Kingdom of Saudi Arabia.
Advanced technologies altered the way people communicate, collaborate, and interact with business. Coping with digital transformation and adoption of cloud-based services, businesses across all industries are shifting servers to data centers outside of their organizations to keep up with the ever-changing digital world. The demand for data center has been underpinned by unlocking benefits such as infrastructure flexibility, better recovery options, improved collaborative systems, workforce mobility, ease of access to public cloud operators and an overall lower total cost.
In theory, a data center can be built anywhere with power and connectivity. While considerations such as services offered, connectivity options, and technical support are all important, the physical location of a facility shouldn’t be underrated. Location has an impact on the quality of service that the facility can provide to its customers.
Businesses need to consider what they need from a data center and incorporate those requirements into their data center location strategy. A good data center location strategy not only considers the capabilities of the data center, but also assesses what benefits its physical location can provide in addressing key business needs.
Various data centers in the Middle East are being developed in prominent locations, especially within the Gulf Cooperation Council (GCC) countries. Rapid development in network connectivity, government support, and growth in the adoption of cloud, big data, and IoT services have been strong drivers for the growth of the United Arab Emirates (UAE) data center industry.
As data centers strive to deliver efficiency that can bring value to clients, one of the most challenging tasks in a hot and dry environment such as the UAE, is cooling. The more advanced and efficient cooling technology is, the lower the power bill and the more environmentally friendly the data center will be. Khazna has facilities in Abu Dhabi and Dubai, which aim to be 40 percent more energy efficient than a typical data center in the UAE.
In cold climates such as Northern Europe and some parts of the USA, data centers providers rely on fresh air as a main source of cooling or “free cooling” with chillers to compensate during the summer season. However, here in the Middle East it is quite the opposite, and most data centers rely on the chiller almost 100 percent of the time.
Khazna's facilities have adopted higher delta temperatures and use water cooled chiller systems with an option to trigger “free cooling” when outdoor temperatures drop in winter, reducing the Power Usage Effectiveness (PUE) to a target of 1.6, reducing power bills.
Modern indirect evaporative technologies require only one third of the water supply compared to traditional economizers. They are available as single units without the need of mechanical cooling.
The Middle East is fully capable of providing secure and resilient infrastructures to ensure minimum risks and maximum uptime.
Regulatory and Legislative Frameworks
When it comes to cloud computing, regulation and legislation must enhance the cloud markets’ ability to operate efficiently while protecting data sovereignty on the national and regional levels. Cloud computing involves the distribution of data across servers located anywhere in the world. The way the cloud surpasses national boundaries creates potential risks by moving data into, or allowing access to data from, countries with restrictive data privacy and protection laws.
There is no international consensus on data sovereignty, so countries are entitled to make the privacy and data-hosting laws as lenient or as strict as they like. Thus, businesses must comply with several different legal systems if they wish to transfer personal data across borders.
While some countries in the GCC have successfully established comprehensive cloud computing frameworks that regulate the issues pertaining to data gathering, data utilization, and data sharing on the state and interstate levels, others still have no effective regulations to tackle these issues.
The UAE government has not yet implemented a specific data protection regulation. Instead, the government relies on several different regulations, including the Regulating Telecommunications Law which protects telecoms consumers in the UAE, the Cyber Crime Law and certain clauses within the Penal Code and Constitution, to maintain a stringent control over data within its borders.
In the UAE, as in many places around the world, all data is not equal. Public organizations, for example, cannot have their data leave the UAE, presumably because their data would be government related and therefore be considered vital to national security.
This local storage clause also applies to a wide array of other sectors - notably the healthcare, financial and education sectors - that are considered strategic and sensitive in nature and would thus require increased protection. Other countries like Saudi Arabia have adopted similar approach.
With the right local knowledge, tools and partners inclined to walk the path of digital transformation together, enterprises in the Middle East can be ready to fully embrace a digital future.