Hyperscale
Johor: From 10MW to 1,500MW in three years
India’s Hyperscale Ambitions Gigawatt-scale data centers “inevitable” Singapore’s quest for sustainable data centers
Special Middle East supplement included
10 Johor: From 10MW to over 1,500MW in three years
12 What’s next for Johor?
13 India’s hyperscale ambitions: GW-scale data centers “inevitable”
15 Singapore’s quest for sustainable data centers
HIGHLIGHTS
16 Reality Check: Energy efficiency, water scarcity, and decarbonisation
22 Industry 4.0 and AI driving hyperscale data center
34 Women leading the digital revolution
38 Hyperscale - what’s next?
HAPPENINGS
19 Key takeaways from Korea and China CDC 2024
36 Celebrating Dubai
37 Eye on Saudi Arabia
MIDDLE EAST SUPPLEMENT
25 How will the Middle East data center market shape up?
27 Emerging Markets to watch out for in the Middle East
29 What makes Saudi Arabia such an exciting DC market
31 Subsea Cable Systems: Connecting the Middle East to the world
From the Editor’s Desk
We are living in exciting times, where a rapidly digitalising world is embracing emerging technologies like Artificial Intelligence (AI). This is, in turn, driving a mind-boggling, non-linear and unpredictable kind of growth in the global Cloud and Data Center industry.
In this issue, we take a closer look at the unprecedented boom in the hyperscale data center market in the Asia Pacific region, particularly in Johor in Malaysia, and across India where there is now talk of building gigawatt-scale data centers!
We have also put together a Special Middle East Supplement that showcases one of the most exciting data center markets in the world. While the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA) are leading the region’s digital transformation, emerging markets like Bahrain, Oman and Qatar are also poised for growth.
This issue also features exclusive articles penned by industry watchers, veterans, and sustainability experts. We hope you enjoy reading this issue as much as we enjoyed putting it together.
Deborah Grey Editor-in-Chief W.Media
“In recent years, the data center industry has rapidly evolved from a niche technical field to a cornerstone of global digital infrastructure, driven by the explosive growth of cloud computing and AI. Recognising this seismic shift, our Cloud & Datacenters magazine has positioned itself as a leading voice in the industry. We are committed to delivering relevant analysis, insights and perspectives, establishing ourselves as the go-to resource for industry professionals and decisionmakers.”
Paul Mah Executive Editor W.Media
Paul Mah Executive Editor
Senior Tech Journalist
Editor-in-Chief
Deborah Grey
Hazel Moises
AirTrunk Opens 150MW
Hyperscale
Data Center
in Johor Bahru
Global data
center
operator
AirTrunk has officially opened its largest facility in Southeast Asia, a 150 megawatt hyperscale data center in Johor Bahru, Malaysia.
The facility, AirTrunk JHB1, represents a significant investment in the country’s digital infrastructure and is expected to drive economic growth.
Designed to meet the surging demand for data processing and storage in the region, JHB1 incorporates cutting-edge technology to optimize efficiency and sustainability. The data center’s advanced cooling systems, including direct-to-chip liquid cooling, are expected to significantly reduce energy consumption. In addition, AirTrunk has committed to sourcing renewable energy to power the facility, aligning with Malaysia’s environmental goals.
With its strategic location and substantial capacity, JHB1 is poised to attract major technology companies and cloud service providers to Malaysia. The data center is expected to create new job opportunities and stimulate related industries in the region.
AirTrunk’s investment in Malaysia underscores the country’s growing importance as a digital hub in Southeast Asia. The company’s decision to establish a large-scale data center in Johor Bahru is a testament to the favorable business environment and supportive government policies in Malaysia.
Vietnam Opens Doors to Foreign Data Center Investors
Vietnam has made a surprising aboutface, welcoming foreign investment in its data center sector after strict data storage rules backfired. The new Law on Telecommunications, effective last week, eliminates foreign ownership restrictions for data and cloud providers, a stark contrast to the 49% cap on foreign investment in many other Vietnamese industries.
This shift comes after previous regulations, including the Cybersecurity Law, mandated companies to store data within Vietnam’s borders. This move, met with strong opposition from tech giants like Facebook and Google, has a history of causing friction with international trade agreements. Additionally, concerns were raised about the ability of domestic data centers to meet the surge in demand and maintain international security standards.
Nikkei Asia reported that according to Leif Schneider, a lawyer at Luther, the local data storage requirement can be expensive for companies. There’s also the challenge of ensuring Vietnamese data centers meet global data security and privacy benchmarks.
However, the new telecommunications law is seen as a turning point. Experts predict an influx of international players in cloud computing and data storage, potentially leading to technology transfers and other economic benefits. Companies like Amazon Web Services and Keppel, a Singaporean asset manager, have already expressed interest in investing in Vietnamese data centers. Vietnam’s data center sector is poised for significant growth, with foreign investment playing a key role. This move reflects the country’s need to balance data security concerns with the benefits of attracting international tech giants and fostering domestic industry development.
China paves the path for Foreign Ownership of Data Centers
In a landmark move, China has enabled the removal of restrictions on foreign ownership of cloud and data center services.
This is significant for a country where until now, foreigners have not been allowed to own more than 50 percent equity in data centers.
The decision came to light this Sunday, when the “Negative List” released by China’s National Development and Reform Commission cut sectors barred from foreign investment from 31 to 29. Effective November 1, all restrictions to foreign investments into China’s manufacturing sector will be lifted. Significantly for the digital infrastructure industry, restrictions will now be removed for a variety of digital services including cloud and data center services, value-added telecommunication services, internet services etc., especially in regions like Beijing, Shanghai, Shenzen and Hainan.
W.Media had reported recently that China has significantly accelerated its investment in data centers, pouring over 43.5 billion yuan ($6.12 billion) into a nationwide project in recent years.
Vantage Data Centers Opens First Hyperscale Data Center in Taipei
Vantage Data Centers has announced the official opening of its first Taipei data center, TPE11. The 16MW facility, located in Taoyuan, is equipped with advanced liquid cooling technology to support the growing demands of AI and data-intensive applications. A grand opening ceremony was attended by government officials and industry leaders, including Taoyuan Mayor Chang San-Cheng. The event marked a significant milestone for both Vantage and Taiwan’s technology sector.
“Taipei is a dynamic technology hub experiencing rapid growth in demand
This initiative, known as “Eastern Data, Western Computing,” comes as the country faces growing technological restrictions from the United States. Readers would recall that the US had imposed export controls on certain advanced computing products, including those from Nvidia, a leading chipmaker. These restrictions have prompted China to intensify its efforts to develop domestic capabilities in high-performance computing.
In light of this, the recent decision to remove restrictions on foreign investment and ownership of data centers, is yet another step by China to build some serious tech muscle and assert its dominance.
Before Sunday’s update, the “Negative List” was last updated in 2021. The move was necessitated by an economic slowdown in the wake of the COVID-19 pandemic. China has also removed restrictions to investments in healthcare, biotechnology.
Data Center Fire Strikes Alibaba Cloud in Singapore
A major fire incident at Alibaba Cloud’s Availability Zone C data center in Singapore has caused significant disruptions for numerous tech companies and their services. The fire, which started on Tuesday, September 10, at Digital Realty’s SIN11 data center, involved lithium-ion batteries and presented unique challenges for firefighters due to their tendency to reignite and release toxic fumes.
The incident has had a ripple effect on various tech giants, including Lazada and Bytedance, as their services rely on the cloud infrastructure provided by Alibaba Cloud. Internal teams and sellers using the platform have reported widespread errors and disruptions.
for hyperscale data center solutions,” said Raymond Tong, president of Vantage’s APAC business. “TPE11 is a strategic addition to our global portfolio, and we are excited to support the region’s digital transformation and innovation.”
Designed with sustainability in mind, TPE11 boasts industry-leading PUE and WUE metrics. The facility will be powered by Taiwan Power Company, which is committed to increasing its renewable energy sources.
Vantage’s entry into the Taiwanese market underscores the country’s increasing importance as a global technology center. The new data center is expected to attract a diverse range of customers, including cloud providers, enterprises, and high-performance computing companies.
While Alibaba Cloud has successfully switched most of its cloud network and security products to backup systems, other services are still being affected. The fire has also caused water accumulation and leaks in one of the server rooms, leading to an emergency power shutdown to prevent electrical short circuits. The prolonged firefighting efforts and subsequent damage have forced Digital Realty to partially close the data center.
The Building and Construction Authority has issued a Dangerous Building Order and a Closure Order for specific areas due to structural concerns.
Recovery teams are working tirelessly to assess the extent of the damage and restore operations. Digital Realty has confirmed that a company emergency response team is on-site to support the recovery process and is working closely with affected customers.
PHOTO: 8WORLD
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Johor: From 10MW to 1,500MW in three years
With its proximity to Singapore, lower costs, and strong government support, Johor has become Malaysia’s top data center market and is poised to be the largest in Southeast Asia. It is difficult to believe that Johor’s data center capacity was just 10MW at the start of 2021. By 2024, this capacity has surged to over 1,500MW, according to DC Byte.
By Paul Mah
Granted, this figure includes data centers under construction, committed supply, and those in the early stages of planning and development. Still, the meteoric rise is unprecedented, marking a once-ina-generation leap for the state of four million inhabitants.
Once-in-a-generation growth
How did this remarkable growth come about? It arguably began when
Singapore imposed a moratorium on new data centers in 2019, ceding the stage for new data centers and causing demand to spill over to Johor and Batam. Johor’s first data center, Keppel’s DC Johor 1, was completed in 2020. Then GDS broke ground on its data center campus at Nusajaya Tech Park in April 2022, and the race is on. Malaysian authorities quickly capitalised on the initial momentum, using their understanding of what data center operators need by launching the Green Lane Pathway initiative in 2023. This streamlined power approvals for new facilities, reducing the lead time
It is difficult to believe that Johor’s data center capacity was just 10MW at the start of 2021. By 2024, this capacity has surged to over 1,500MW.
for new data centers from three to four years to as short as 12 months. One of the earliest beneficiaries, Princeton Digital Group (PDG), successfully delivered phase one of its 150MW JH1 data center campus in the Sedenak Tech Park (STeP) within 14 months of acquiring the land.
On a strategic level, Malaysia sought to attract more digital investments. For example, the Malaysian Investment Development Authority (MIDA) and Malaysia Digital Economy Corporation (MDEC) established a Digital Investment Office in 2021 to focus on digital infrastructure development. In 2023, the Ministry of Digital Communications was split into the Ministry of Digital and the Ministry of Communications to better focus on these areas.
Malaysia was able to seize the opportunity because it was prepared. For years, MDEC worked tirelessly to promote Malaysia as a destination for data centers. And Malaysia already boasts a substantial number of data centers thanks to the Multimedia Super Corridor (MSC), with international operators such as NTT setting up shop alongside many home-grown players.
GDS Nusajaya Tech Park Data Center Campus (Phase 1) in Johor.
The shape of data centers to come Johor’s massive growth shows no signs of slowing. Indeed, private conversations and informal exchanges with various data center operators suggest many more data center operators are gearing up to make announcements in the months ahead.
Cloud players are also ramping up their presence. For years, the largest public cloud providers have established their clouds in Singapore, opting to expand their footprint there instead of building new cloud regions in other parts of Southeast Asia. This is no longer the case.
In August, Amazon Web Services (AWS) opened its Malaysia cloud region with three availability zones and says it will invest RM29.2 billion over 15 years. In October, Google broke ground on its US$2 billion data center and cloud region in Malaysia, while Oracle has announced that it will build a US$6.5 billion cloud. In addition, Microsoft is expected to announce the launch of its Azure cloud region very soon.
Could Malaysia’s breakneck data center growth strain resources? This is a real possibility, though it’s more about ensuring the even distribution of power and water than any shortage. Even localised water shortages or power outages won’t sit well with voters, which means government agencies must work overtime to ensure it never happens.
Another concern is the potential of a data center bubble, a possibility many in the industry grudgingly acknowledge is an eventual possibility. For now, data center capacity is snapped up as quickly as it is built; new construction phases are often started immediately after completion of previous phases simply to keep pace with demand.
Empowering the next phase of growth
What lies ahead? As more data is served from Johor, there is an opportunity to build a thriving Internet exchange to support the new data center operators and cloud hyperscalers. Done right, this could position Johor as a key digital hub not only in Malaysia but across Southeast Asia, setting the stage for its next phase of digital growth.
There are additional benefits. Data center investors often seek renewable energy to meet their netzero commitments. The rapid growth of data centers allows Malaysia to
Data center capacity is snapped up as quickly as it is built; new construction phases are often started immediately after completion of previous phases simply to keep pace with demand.
leverage this demand to make the transition to renewable power more quickly than before. Other factors must first be put in place, including legislative changes for an open-access power grid.
Malaysia isn’t just focused on attracting data center operators. It aims to grow the entire data center supply chain ecosystem, from assembling and packaging semiconductors to manufacturing
data center equipment and even talent development. Only then can Malaysia maximise the benefits of its data center growth and ensure the healthy, continued development of data centers.
Ultimately, Johor’s transformation into a data center powerhouse could usher in a new era of economic growth, not just for Johor, but for Malaysia as a whole, elevating it to the forefront of the global digital economy.
What’s next for Johor?
Is Johor’s data center market a bubble in the making?
By Aurora Tang
Amid growing concerns about an oversupply of data centers, questions surrounding power and water stability, and its impact on urban planning, many wonder if the rapid development of Johor’s data center market is a bubble in the making.
However, industry players suggest these fears are unfounded – at least for the foreseeable future.
Fast growth, high demand
In just three years, the data center capacity in Johor has skyrocketed from 10MW in 2021 to over 1,500MW. A long list of technological giants such as ByteDance, GDS, and Microsoft have turned to Johor to meet their capacity needs.
The presence of major players like Microsoft in the Johor data center industry indicates that there is significant potential within the market, says Tiffany Goh, the country manager of IVPS Malaysia.
Addressing the issue of oversupply, Goh explained that in real estate, oversupply is typically defined as a development remaining vacant for more than six months after completion. She believes this scenario is unlikely to apply to the data center industry given the current demand. In addition, the construction of a data center is extremely costly, and operators would have conducted a thorough market analysis before investing.
Build and they will come
Building data centers is a lengthy process, involving securing land and approvals. With demand surging due to the growth of AI, customers are now looking for significantly more capacity, between 50 and 100 MW of power.
New data center operators currently face the classic dilemma of developers everywhere: should they build ahead of demand? Waiting until demand
materialises could mean missing out on profits. Yet building today’s massive data centers first is a huge financial risk that they must carefully consider.
Apart from tackling the issue of demand and supply in the market, the availability of resources is also one that needs to be taken into account. A typical household will use about eight MWh of power a year, and 100 MW of power can theoretically supply 110,000 households. This figure provides us with context on how much energy is required to power hyperscale data centers.
With power disruptions at the CIQ complex happening twice in less than three months between December 2023 and February 2024, is there enough power for all the new and upcoming data centers?
Expect more regulations
To tackle such issues preemptively, the Johor State Data Center Development Coordination Committee (JPPDNJ) was established earlier this year to introduce guidelines on the usage of water and power by data centers.
The committee had decided that data centers in Johor should focus on the use of renewable technology in addition to saving electricity and water. Speaking publicly in August 2024, Lee Ting Han, chairman of Johor’s investment, trade and consumer affairs committee, said that the authorities are aware that data centers consume large amounts of water and energy, but they will ensure that domestic users will not face interrupted utility supplies.
While it is heartening to know that the state government sees a need to put measures in place for regulatory purposes, the effectiveness of these guidelines will still need to be evaluated over time to determine their true impact and whether they can adequately address the challenges at hand. Industry players are also hoping to receive grants and support from the government to aid in the transition towards building more sustainable data centers in Johor.
Additionally, proper urban planning has been keeping the construction of data centers in check too. In April 2024, PLANMalaysia Johor also published a 40-page guideline titled “Johor State Data Center Development Planning Guidelines.” This provides operators with information regarding data center location, permitted planning zones, land use categories, among other criteria. Operators looking to set up data centers in Johor will have to comply with these guidelines.
Data center development is usually limited to industrial or commercial zones as outlined in the Local Plan (RT) to ensure compatibility with the environment. When proposing data centers in commercial areas, operators are also required to conduct thorough research to align with local character, zoning regulations, and community needs, mitigating potential negative impacts and fostering a positive relationship with the surroundings.
Forging ahead
While Johor is gaining traction due to its data center boom, there are concerns in some sectors that the rapid growth could compromise the development of other industrial sectors. So far, the state seems to be developing well in the semiconductor market. The proposed Johor-Singapore Special Economic Zone (SEZ) is expected to further attract semiconductor players.
For now, it is evident that the Johor government is placing significant emphasis on the growth and regulation of the data center industry, implementing policies and guidelines to support its development.
However, the industry’s rapid expansion is still in its early stages, and while the outlook appears promising, the sustainability of this growth remains to be seen. Continuous monitoring and adjustments will be key to ensuring the market matures in a balanced and resilient manner, benefiting both the industry and the broader community.
India’s Hyperscale Ambitions: GW-scale data centers “inevitable”
In late August, Reliance Industries Chairman and Managing Director, Mukesh Ambani, shocked India’s data center industry by announcing ambitious plans to build a 1 GW, AI-ready data center in Jamnagar, located in the western Indian state of Gujarat.
By Deborah Grey
This would be truly phenomenal in a country where the total IT load capacity has just about touched 1 GW nationwide, with Mumbai alone accounting for at least half of it.
Today, Indians are consuming online services and generating data like never before. This, in turn, has generated an unprecedented demand for digital infrastructure and compute power. Now, add artificial intelligence and highperformance computing into this mix, and it all becomes truly mind-boggling!
While there are hyperscale data centers in all major Indian markets like Mumbai, Chennai, Hyderabad, Bengaluru, and Delhi/NOIDA, their IT load capacities are nowhere near GWscale. It is also a fact that the nation of 1.4 billion tech- savvy people remains grossly underserved when it comes to data centers.
Are GW-scale data centers on the horizon?
“It is inevitable,” says data center industry expert Sandeep Dandekar. In fact, unlike others who see only edge data centers or facilities with smaller IT capacities being built in smaller towns across India, Dandekar feels even hyperscale data centers would find their way into India’s interiors. “With the rise in total demand, I see a rise in
density levels and a need for latencyfree high-speed high-volume data flow right up to deeper interior locations of the country in the near future,” he says. Dandekar expects the market to grow at a CAGR of at least 20 percent, and that this would lead to greater adoption of new technologies in the areas of automation, as well as new age cooling technologies that will save power. However, he cautions, “In case the total capacity availability does not grow at that pace, the steam will be wasted, and that will constrain growth achieved in various sectors.”
In its report titled Is India Building Enough to Power its Digital
Transformation, Cushman and Wakefield found that India’s underconstruction Colocation data center capacity addition stands at 1.03 GW for 2024-2028. An additional 1.29 GW is planned, and operators have been building land banks with 3-4
“With the rise in total demand, I see a rise in density levels and need for latency free high-speed high-volume data flow right up to deeper interior locations of the country in the near future.”
Sandeep Dandekar Data Center Expert
GW development potential over the medium to long term. When it comes to hyperscale data centers, the report found that the total operational cloud self-build capacity stood at 68 MW as of end-2023, with under-construction and planned capacity of 96 MW and 226 MW, respectively. “Hyperscalers have also moved ahead on land banking, with AWS and MS Azure acquiring land parcels across Mumbai, Thane, Hyderabad, and Pune for future development,” found the report.
“At the rate at which India’s data center industry is growing, GW- scale data center campuses are no longer a luxury but the only option that we have,” says Rohan Sheth, Head – Colocation and Data Center Services, Yotta Data Centers. Yotta is a major player in India’s data center market that already operates hyperscale data centers across India, including the world’s second largest Uptime Institute Tier IV-certified facility in Navi Mumbai. “Yotta’s Navi Mumbai DC 1 has 45 MW of IT power with a 48hour backup. Our DC 2, which is core and shell ready, has an IT power of 60 MW. In addition to these 2 buildings, Yotta’s facilities offer strategic scalability with the capacity to expand up to 1 GW in Panvel,” he shares.
What is driving the demand for Hyperscale data centers in India? Just taking a closer look at internet and mobile phone usage figures should be enough to understand the demand-supply gap surrounding digital infrastructure. According to the Telecom Regulatory Authority of India (TRAI), at the end of December 2023, India had 936.16 million internet subscribers and 1.15 billion wireless telecom subscribers.
Moreover, given the government’s push towards cashless transactions, in the wake of the 2016 demonetisation initiative, and the impact of the COVID-19 pandemic, Indians have taken to digital banking and payment services in a big way. Unified Payments Interface (UPI), which is a mobile-based payment system in India developed by the National Payments Corporation of India (NPCI) has made real time, round-the-clock digital transactions convenient. So much so that it is now even used by autorickshaw drivers, street-side food vendors, and neighbourhood momand-pop stores to accept payments from customers!
Meanwhile, e-commerce and OTT platforms are thriving, as are apps
“At the rate at which India’s data center industry is growing, GW scale data center campuses are no longer a luxury but the only option that we have.”
Rohan Sheth
Head – Colocation and Data Center Services
Yotta Data Centers
offering services like food and grocery delivery, car hire and taxi booking, and flight and rail reservations, not to mention the ubiquitous social media apps.
According to the 2023-2024 Annual Report of the Reserve Bank of India (RBI), which is India’s central bank and the regulatory body overseeing India’s banking sector, the Department of Payment and Settlement Systems (DPSS) has recorded at growth of 44 percent in terms of transaction volume during 2023-24, on top of the expansion of 57.8 percent in the previous year.
Building GW-scale Data Centers
So, the big question is, can India truly build and operate data centers that will have a capacity equivalent to the current IT capacity of all its data centers put together?
“Why not?” asks Vinod Javur, COO, Digital Edge DC, adding with cautious optimism, “As long as operators can arrange for adequate power, it is possible.”
Yotta’s Sheth concurs saying, “The capital expenditure on setting up these data centers averages between USD 4-10 million per MW, depending on the geography, with the largest component being power, which constitutes about 30 percent of the total capex.” He further says, “Securing clean and green power of such a large quantity and also unlimited bandwidth of fiber are the key challenges, along with cap-ex costs and energy consumption for GW-scale data centers.”
But despite the challenges, one cannot deny that India’s hyperscale journey has just started, and GW-scale data centers will not be a distant dream for long.
Singapore’s quest for sustainable data centers
Singapore was supposed to fail. The critical mass and key elements needed for a functional and prosperous nation weren’t there. Yet, Singapore not only survived but thrived. When digital transformation emerged as the new frontier, the city-state led the charge, quickly establishing itself as a regional data center hub.
By Paul Mah
However, as Singapore approaches its 60th year of independence, the reality of its constraints is biting again. In an era of sustainability and climate change, Singapore finds itself unable to compete in building data centers on the same scale as other parts of the world.
Sustainability is a challenge for all
With its early start, Singapore’s 1,400MW of data centers already makes it one of the densest data center hubs globally, whether by GDP, land area, or population. The problem lies in its small size and extensive urbanisation, leaving little space for solar panels and renewable energy.
With limited renewables, Singapore cannot allow unchecked construction of new data centers. Having recognised the problem years ago, it imposed a 3-year moratorium on new data centers in 2019. This was followed by an initial allocation of 80MW – anaemic by current standards – for new data centers in 2023.
On May 30 this year, Singapore announced a new allocation of 300MW of capacity for data centers. As part of an expansive “Green Data Center Roadmap” published the same day, the new allocation was meant to capture strategic opportunities for Singapore and incentivise the industry to build more sustainable data centers.
Speaking at the launch of Google’s fourth data center in Singapore a week after the unveiling of the roadmap, Senior Minister of State Dr Janil Puthucheary elaborated on the government’s stance on sustainable data centers.
“This challenge [of sustainability] is not unique to Singapore; eventually, all of us, wherever we are in the world, are going to be faced with these constraints… Because of who we are, we are determined to turn these constraints into [opportunities] to innovate and capture value from the growth of sustainable data centers,” he said.
Working with the industry
Faced with the challenge of sustainability and energy efficiency in data centers, Singapore is adapting. But how does one build a sustainable data center? The Green Data Centre Roadmap provides some insights.
There are two key strategies: improving energy efficiency at the hardware and software level to maximise data center capacity, and accelerating the use of green energy by incentivising operators to explore ways to leverage it at scale.
The plan is to encourage an ecosystem approach, nudging data center operators, equipment vendors, end-users, and academia to collaborate, aligning mutual interests to achieve broader improvements.
The idea is to create an ecosystem focused on efficiency across the entire digital stack. By raising standards incrementally, the roadmap aims to spur innovation, lower costs, increase resource awareness among end-users, and reshape how new data centres are designed and built.
In a closed-door session at the ATxSummit conference following the roadmap’s announcement, Dr Puthucheary highlighted how Singapore transformed from one of the most water-stressed nations to one with
significant water resilience.
The message here? Singapore has done it before and can do it again. As it becomes an expert in sustainable data centers, it hopes to eventually export this know-how.
What about the old data centers
But what about older data centers? With new sustainability criteria likely applicable only to new data centers, what happens to older ones in Singapore and other cities facing sustainability challenges?
During a panel discussion held as part of Tech Week Singapore in October, Marcus Tong, a director at the Infocomm Development Authority of Singapore (IMDA) acknowledged that upgrading operational data centers is not a trivial effort given customers’ expectations of uninterrupted service.
Scheduled technology refreshes could offer opportunities, suggests Tong. “How can we facilitate some of these moves? It could be incentives to offset some of the CAPEX itself. If there are operational concerns and considerations, how do we work with the industry to mitigate or manage some of these issues?”
“[There are] no clear answers or solutions at this time. We recognise the need to work together with the industry and data centers operators. We have set an ambition of making sure that every data center in Singapore [can hit] a PUE of at least 1.3 or better in 10 years.”
Can Singapore succeed and reinvent itself as a leader in sustainable data centers? Just as it had transformed its water scarcity into resilience, could Singapore revolutionise energyintensive data centers into a model of sustainability – and effectively turning water into wine?
Reality Check: Energy Efficiency, Water Scarcity, and Decarbonisation in the Middle East
The Middle East, recognized for its extensive oil reserves and dry landscapes, is grappling with a series of interconnected challenges that are influencing its future: energy efficiency, water scarcity, and the necessity for decarbonization.
By Rajat Srivastav and Debbie Egeland
As the world shifts towards a more sustainable and low-carbon future, nations in the Middle East are facing mounting pressure to tackle these issues and adapt to the evolving global environment...
Energy Efficiency
Energy efficiency is a vital concern in the Middle East, where high energy consumption levels, largely driven by rapid population growth and industrial expansion, are straining existing resources and infrastructure. The region ranks among the largest energy consumers globally, with energy-intensive sectors like oil and gas production constituting a significant part of its GDP.
To meet the rising energy demand and lessen dependence on fossil fuels, Middle Eastern countries are increasingly channeling investments into energy efficiency initiatives. These efforts encompass improving energy consumption patterns in buildings, transportation, and industry, alongside promoting renewable energy sources such as solar and wind power.
A major hurdle for energy efficiency initiatives in the Middle East is the limited awareness and lack of incentives for individuals and businesses to embrace more sustainable practices. Many countries in the region still subsidize energy prices, which leads to wasteful
consumption and obstructs efforts to encourage efficiency and conservation. Nonetheless, there are indications of progress. Nations like the United Arab Emirates and Saudi Arabia have established ambitious goals for reducing energy intensity and boosting the share of renewables in their energy mix. Investments in smart grid technologies, energy-efficient buildings, and sustainable transportation systems are also gaining momentum throughout the region.
Water Scarcity
Water scarcity is a critical issue in the Middle East, where dry climates and limited water resources create significant challenges for agriculture, urban growth, and overall human well-being. This region is among the most water-stressed globally, with many countries depending heavily on desalination and unsustainable groundwater extraction to fulfill their water requirements. Climate change is worsening water scarcity in the Middle East, resulting in more frequent droughts, diminishing water supplies, and heightened competition for scarce resources. The depletion of aquifers and contamination of water sources also jeopardize the long-term water security of the region.
To tackle these issues, Middle Eastern countries are implementing various strategies to enhance water management and boost efficiency. This includes investing in water recycling, drip irrigation, and other technologies aimed at reducing water waste in agriculture, along with initiatives to encourage water conservation in urban
settings. Some nations in the region are also looking into alternative water sources, such as treated wastewater and brackish groundwater, to lessen their dependence on desalination and fossil aquifers. For instance, in Saudi Arabia, the National Water Strategy is being put into action to improve water use efficiency and decrease reliance on unsustainable water sources.
Decarbonisation
Decarbonisation, which involves reducing carbon emissions from fossil fuels, is a top priority for Middle Eastern countries aiming to combat climate change and move towards a sustainable energy future. Even though they are significant oil and gas producers, many nations in the region are beginning to see the importance of diversifying their economies and lowering their carbon emissions.
The Gulf Cooperation Council (GCC), made up of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, has committed to cutting carbon emissions and boosting the share of renewable energy in their energy portfolios. For example, Saudi Arabia has revealed plans to invest $50 billion in renewable energy initiatives by 2030 as part of its Vision 2030 reform strategy.
However, the shift to a low-carbon economy in the Middle East faces several challenges. The region’s strong dependence on fossil fuels and the power of influential energy lobbies create hurdles for the adoption of renewable energy and the establishment of carbon pricing systems. Despite these obstacles,
there are encouraging signs of advancement. The decreasing costs of renewable energy technologies, like solar and wind, are making them more competitive with traditional energy sources.
Additionally, Middle Eastern countries are increasingly acknowledging the economic and environmental advantages of decarbonisation, such as job creation, energy security, and improved air quality. In summary, energy efficiency, water scarcity, and decarbonisation are vital concerns for Middle Eastern nations as they confront the challenges of a rapidly evolving world. By investing in sustainable technologies, encouraging
conservation and efficiency, and transitioning to a low-carbon economy, these countries can tackle these issues and build a more resilient and prosperous future for themselves and generations to come.
Driving sustainability across the Middle East through Innovative
Colocation Approach
An innovative concept worth exploring is the co-location of data centers with wastewater treatment plants and hydrogen electrolyzers.This approach involves creating green hydrogen from renewable energy sources to split water (H2O) into hydrogen and oxygen. The hydrogen from the electrolyzer can be used in a fuel cell to power the
data center, while the wastewater treatment plant can utilize the pure oxygen produced in the process for aerobic treatment. The waste heat recovery process is graphically illustrated in Figure 1.
Heat from the data center’s cooling tower can provide heating and cooling for surrounding communities, thus creating a circular economy. This innovative concept has the potential to be a game-changer for the energywater nexus of data centers, offering an exciting possibility to simultaneously improve resource efficiency and contribute to a more sustainable future.
Rajat
Srivastav
Rajat is an experienced environmental and sustainability professional with over 18 years of environmental sustainability assessments, carbon footprint assessments, lifecycle evaluation, groundwater source vulnerability assessments and source mitigation plans. He leads the ESG practice for Jacobs, one of the leading providers of ESG services globally. He also has been part of ESG feasibility assessments for several technology and manufacturing sector clients.
Debbie Egeland
Debbie is a Civil and Environmental Engineer with Jacobs’ Environmental Services Business Group and is based in Singapore. She has served as project delivery lead, managing over 50 employees across the Western U.S. Her project work has been vast including water, GHG, climate change, auditing, site management, business process mapping, calculating air emissions, and preparing permit applications.
Figure 1: Integrated water management approach illustrating benefits of colocating a data center with wastewater treatment plants and hydrogen electrolyzers.
The Pulse of the Industry: Key Takeaways from Korea and China CDC 2024
The Korea Cloud & Datacenter Convention 2024 wrapped up on a high note, bringing together industry leaders, innovators, and enthusiasts for a dynamic exchange of ideas and exploration of the latest trends in the data center space. The event fostered a vibrant atmosphere for networking, knowledge sharing, and charting the course for the future of data center solutions in South Korea.
Here’s what some of the key participants had to say about their experience:
“It was a great place to reconnect with people I’ve worked with in the past, especially asset managers, construction managers.
Great opportunity to meet potential clients during the event day, and also the VIP pre-event drink”
SungHoon Park Director of Head of Sustainability Solutions in Korea CBRE Asia Pacific
The China Cloud & Datacenter Convention 2024 also concluded with resounding success, offering attendees a valuable platform for networking, learning, and gaining insights into the dynamic data center landscape in China.
Roger Niu, Group Account Director at NCH, echoed these sentiments, emphasizing the event’s professionalism and the valuable knowledge exchange that took place.
“This summit is highly professional, with the attending representatives providing consultations that cover the latest in data center design, planning, construction, installation, and operational management. While being broad in scope, it also stands out for its high level of expertise and rich content. Additionally, participants engage in communication through the platform, exchanging cuttingedge information and establishing strong industry relationships, thus contributing to the faster and better development of data centers.”
Alistair James LaBrooy, CTO of AREA Group, also shared his positive experience at the event.
“I had the pleasure of attending the W Media data center event in Shanghai, and I must say it was exceptionally well-organized. The topics discussed were both timely and insightful, offering a deep dive into key trends shaping the future of the industry. The panelists were knowledgeable and provided valuable insights that will undoubtedly impact our strategies moving forward. Additionally, the event attracted a great crowd, which created ample opportunities for meaningful networking. Overall, it was a highly productive and enriching experience.”
“I thoroughly enjoyed participating in the W.Media Korean Cloud and Data Center convention as a panel expert. Moreover, the convention had also provided an excellent networking platform meeting sector leaders and industrial experts.”
John Pritchard Head of Tenant Advisory Group / Global Services Cushman & Wakefield, Korea
“The show, speakers and attendees were all excellent, creating a great atmosphere at the event. Overall it was a well-organized event.”
Youngjun Kim
Managing Director IGIS Asset Management
As Guosheng Zhu, Chief Engineer at Yunju Service, noted:
“A quite successful event, excellent location with very convenient transportation, high quality hotel venue with a controlled number of participants, making the venue very refined; the refreshments and buffet are abundant; the selected topics for speeches are exceptional, featuring well-known experts and guest speakers from both domestic and international backgrounds.”
2025 Events Calendar
27 March 2025
Philippines Cloud & Datacenter Convention
Manilla
3 April 2025
Melbourne Interconnect World
Melbourne
3 April 2025
Melbourne Cloud and Datacenter Convention
Melbourne
11 April 2025
Taiwan Cloud & Datacenter Convention
Taipei
14 April 2025 Ryukyu Golf Open
Ryukyu
15 & 16 April 2025
Okinawa Interconnect World
Okinawa
2 May 2025
Chennai Interconnect World Forum
Chennai
15 May 2025
Indonesia Cloud & Datacenter Convention
Jakarta
15 May 2025
Perth - Focus
Perth
Japan Cloud & Datacenter Convention Tokyo
SIJORI Week
6 July 2025
Batam
Interconnect World Forum
Batam
8 July 2025
Johor
Interconnect World Forum
Johor
10 July 2025
Singapore Cloud & Datacenter Convention
Singapore
7 August 2025
Korea Cloud & Datacenter Convention
Seoul
21 August 2025
Sydney Cloud & Datacenter Convention
Sydney
25 September 2025
Vietnam Cloud & Datacenter Convention
Ho Chi Minh
September 2025
Saudi Arabia
Cloud & Datacenter Convention
Saudi Arabia
25 September 2025
UAE
Interconnect World Forum
Dubai
23 October 2025
Malaysia Cloud & Datacenter Convention
Kuala Lumpur
October 2025
Mumbai Cloud & Datacenter Convention
Mumbai
5 November 2025
Greater Bay Area Cloud & Datacenter Convention
Hong Kong
November 2025
New Zealand
Interconnect World Forum
November 2025
New Zealand Cloud and Datacenter Convention
Auckland
13 November 2025
Thailand Cloud & Datacenter Convention
Bangkok
27 November 2025
SEA Awards
Singapore
Dates are subjected to changes, please visit our website for latest schedule
Industry 4.0 and AI driving Hyperscale Data Center development in UAE: Johan Nilerud
Emerging technologies like Artificial Intelligence (AI), Machine Learning (ML), Internet of Things (IoT), as well as an increase in automation in line with Industry 4.0 has placed new pressures on the Cloud and Data Center market in the Middle East, especially in the United Arab Emirates (UAE).
In this interview, Johan Nilerud, Senior Director of Strategy and Planning at Khazna Data Centers tells us just how the market is evolving to keep up with the virtual explosion in demand, while doing the tightrope walk vis-a-vis sustainability and energy efficiency related challenges.
How have you seen the Cloud and Data Center industry evolve over the years in the UAE?
The UAE’s cloud and data center industry has evolved rapidly in the past decade, driven by digital transformation across sectors and the government’s vision to establish the country as a global technology hub. Initially focused on localized IT infrastructure, the market has grown into a robust ecosystem capable of supporting global hyperscalers, cloud service providers, and enterprise workloads. We have seen a shift toward hyperscale data centers, with emphasis on energy efficiency and sustainability, as well as advancements in security and connectivity. The demand for data centers has surged, fueled by the proliferation of cloudbased services, e-commerce, and AI-driven applications. Today, the UAE is a leader in the region, with large-scale investments aimed at creating digital infrastructure that powers both the public and private sectors.
What are some of the trends you are observing in data center investments and development in wake of Industry 4.0 and the AI boom?
Industry 4.0 and the AI boom are reshaping data center investments, with a marked shift towards building hyperscale facilities that can handle AIdriven workloads, edge computing, and massive data processing requirements. Key trends include the adoption of AI and machine learning within data centers themselves to optimize performance and energy usage, and the deployment of edge data centers
to support low-latency services across industries like manufacturing, healthcare, and smart cities. Another major trend is the focus on sustainability – investors and operators are prioritizing green technologies and renewable energy solutions to meet the increasing demand while minimizing the environmental impact. Data centers are now a critical building block to enable innovations like autonomous systems and IoT, both of which require significant data processing capabilities.
The cloud market is expanding rapidly. AI Supercloud is now a reality. What are some of the trends you have observed vis-a-vis demand for cloud technology, and how are you catering to this?
The demand for cloud technology is soaring, driven by AI Supercloud developments and the need for scalable, flexible infrastructure. Key trends include an increasing reliance on multi-cloud and hybrid cloud strategies, as businesses look for tailored solutions to meet specific needs around data security, compliance, and performance. The rise of AI and machine learning applications is another major driver of cloud demand, as enterprises require vast computing power and storage to train and deploy AI models. At Khazna, we are catering to this by offering hyperscale data centers that provide robust cloud infrastructure, enhanced security, and the scalability to meet these evolving demands. Our facilities are designed to handle highperformance workloads while being energy-efficient and future-proof.
Johan Nilerud
The regulatory environment has been relatively friendly for data center operations in the UAE. How has this helped the industry?
The UAE’s forward-thinking regulatory environment has been instrumental in the growth of the cloud and data center industry. Government policies and frameworks have encouraged foreign investment, created a competitive market, and enabled the seamless operation of global tech companies. The implementation of clear data residency laws and compliance standards has given businesses the confidence to host their data locally, which has, in turn, driven demand for local data centers. Additionally, the government’s support for renewable energy adoption aligns with the sustainability goals of the data center industry, enabling operators like Khazna to focus on green technologies and energy-efficient operations.
Khazna Data Centers is perhaps best known for actually walking the talk on sustainability. How challenging has this journey been?
Our commitment to sustainability has been both rewarding and challenging. Balancing rapid growth with environmental responsibility requires significant investment in energy-efficient technologies and innovative design strategies. For example, we have implemented advanced cooling systems like adiabatic cooling and adopted modular design practices to minimize energy and water consumption, and reduce waste during construction. We are also shifting to renewable energy sources like solar, reducing reliance on conventional energy and lowering greenhouse gas emissions. In October last year, we unveiled our plan to introduce biofuels to our portfolio of generators.
Industry 4.0 and the AI boom are reshaping data center investments, with a marked shift towards building hyperscale facilities that can handle AI-driven workloads, edge computing, and massive data processing requirements.
Meeting sustainability standards such as LEED Gold certification has been a rigorous process, but it is a priority for us to ensure that our operations are in line with global best practices. The challenge has been ensuring that we continue to innovate in this space, especially as demand for data services grows, but we are proud to lead the region in sustainable infrastructure.
Khazna is also exploring markets outside the UAE, particularly in North Africa. Could you tell us a bit more about your expansion plans?
Expanding beyond the UAE is a natural progression for Khazna, as we seek to meet growing demand in underserved markets. The regional population is growing and within 20 milliseconds from UAE you can reach a total population of more than 1 billion people. North Africa, as well as other proximate markets represent a strategic focus due to its emerging digital economy, youthful population, and increasing investment in technology infrastructure.
Our goal is to replicate the success we have had in the UAE by delivering world-class data center solutions that prioritize scalability, security, and sustainability. We are always looking for opportunities to have discussions with key stakeholders in the region to explore partnerships and joint ventures. We are dedicated to our aim of delivering hyperscale infrastructure
that can support the region’s digital transformation efforts.
What are your predictions for the UAE data center market in the near future, say five years?
Over the next five years, we anticipate continued rapid growth in the UAE’s data center market, driven by the rise of AI, IoT, and smart city initiatives.
According to Arizton, the UAE data center market is expected to reach US$ 2.65 billion by 2029, growing at a CAGR of 9.95 percent. The demand for edge computing will increase as more industries adopt digital technologies that require low-latency processing. Sustainability will remain a key focus, with more data centers integrating renewable energy sources and energyefficient technologies.
Additionally, we expect an uptick in the development of hybrid cloud solutions and an increase in public-private partnerships as the UAE solidifies its position as a global tech hub. The UAE’s Digital Economy Strategy aims to double the contribution of the digital economy to the UAE’s gross domestic product (GDP) from 9.7 percent in 2022 to 19.4 percent within 10 years – and data centers are critical for this growth.
Khazna will play our part in contributing to this growth by continuing to lead in hyperscale and sustainable data center solutions to meet evolving needs.
Khazna Data Center, Abu Dhabi.
PHOTO: KHAZNA DATA CENTERS
Middle East Supplement
Navigating the Future: How will the Middle East Data Center Market shape up?
The digital age has revolutionized the way data is generated, stored, and processed, making data centers the backbone of modern infrastructure.
By Himmath Mohammed CTO, Gulf Data Hub
In the Middle East, particularly in the GCC nations, the rapid adoption of digital technologies, the proliferation of smart devices, and the push for economic diversification have significantly increased the demand for robust data center solutions.
As the CTO of Gulf Data Hub, the largest colocation data center provider in the MENA region, I’ve seen firsthand how Artificial Intelligence (AI) is reshaping the data center landscape, driving the future of the colocation market, and offering innovative ways to overcome the challenges of scaling up, specifically within the unique context of the Middle East. In this piece, I will attempt to share my observations on these three elements.
The Impact of AI on the Data Center Landscape in the Middle East
AI’s iinfluence on the data center industry is profound, offering the potential to optimize operations, enhance sustainability, and bolster security. However, the application of AI in data centers within the Middle East presents unique challenges and opportunities.
Energy efficiency is a critical issue in the Middle East, where the harsh climate results in high energy demands, particularly for cooling systems. In regions like the UAE and Saudi Arabia, where temperatures can soar above 50°C, traditional cooling methods are often insufficient and costly. AI-driven cooling systems are proving to be a game-changer. By leveraging machine learning algorithms to predict and manage power usage in real-time, these systems can adjust cooling processes to reduce energy consumption significantly.
At Gulf Data Hub, we have implemented AI-based cooling solutions in our Dubai facility, achieving a reduction in energy usage by nearly 35%. This not only lowers operational costs but also aligns with the region’s sustainability goals, as outlined in initiatives like the UAE’s Green Growth Strategy.
Predictive maintenance, powered by AI, is another area where significant advancements are being made. In the Middle East, where the environment can be harsh and unpredictable, ensuring the reliability of data centers is paramount. AI systems can analyze data from sensors to predict hardware failures before they occur, allowing for proactive maintenance and reducing the risk of downtime. This is particularly critical in markets like Saudi Arabia, where the Vision 2030 initiative is driving rapid digital transformation across various sectors, necessitating highly reliable data infrastructure.
Security is a top priority for data centers globally, but even more so in the Middle East, where geopolitical tensions can exacerbate cybersecurity
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risks. AI-powered security systems offer advanced protection by detecting anomalies and potential threats in real-time, far beyond the capabilities of traditional security measures. At Gulf Data Hub, we have integrated AI-based security protocols across our facilities in the UAE and KSA, resulting in a 50% improvement in threat detection and response times. This level of security is crucial for maintaining trust with our clients, especially as the region continues to attract global investments in sectors like finance, healthcare, and energy.
The Future of the Colocation Market in the Middle East
The colocation market in the Middle East is poised for significant growth, driven by the region’s rapid digital transformation and the increasing demand for scalable and secure data infrastructure. However, the market’s future will be shaped by several key trends and regional dynamics.
One of the most important trends is the rise of Edge computing. In the Middle East, where cities like Dubai and Riyadh are rapidly evolving into smart cities, the need for localized data processing is becoming increasingly critical. Edge computing, which involves processing data closer to the source, reduces latency and improves the efficiency of services like autonomous vehicles, smart grids, and real-time analytics. Gulf Data Hub is expanding its footprint to include Edge data centers across the UAE and KSA, strategically located near urban centers and key infrastructure projects. This decentralization of data
Sustainability is another key focus area for the future of colocation in the Middle East
centers is essential to support the region’s ambitious smart city initiatives, ensuring that data can be processed quickly and efficiently.
Sustainability is another key focus area for the future of colocation in the Middle East. As governments in the GCC region push for greener economies, there is increasing pressure on data center providers to adopt sustainable practices. In Saudi Arabia, the Vision 2030 plan includes a strong emphasis on environmental sustainability, encouraging businesses to reduce their carbon footprint. Gulf Data Hub has taken proactive steps by integrating renewable energy sources, such as solar power, into our data centers in the UAE. Our solar installations now contribute to 20% of the energy needs of our Dubai facility, and we are exploring similar projects in Saudi Arabia. These initiatives not only reduce our environmental impact but also position us as leaders in sustainable data center operations in the region.
The hybrid cloud model is also gaining traction in the Middle East, driven by the region’s unique business landscape. Companies are increasingly adopting a mix of on-premises, private cloud, and public cloud services to meet their diverse needs. In markets like the UAE and KSA, where regulatory requirements and data sovereignty are critical, colocation providers must offer flexible solutions that integrate seamlessly with cloud platforms while ensuring compliance with local laws. Gulf Data Hub is partnering with leading cloud service providers to offer hybrid solutions tailored to the needs of our clients in the Middle East. This approach allows businesses to maintain control over their critical data while benefiting from the scalability and flexibility of cloud services, a combination that is particularly appealing to sectors like finance, healthcare, and government.
Innovative Ways of Overcoming Challenges in Scaling Up in the Middle East
Scaling up data center operations in the Middle East presents unique challenges, from managing increased energy
consumption to maintaining operational efficiency and ensuring security. However, innovative solutions are emerging to address these challenges, enabling data centers to scale effectively and sustainably in the region.
Energy consumption is a significant challenge in the Middle East, where data centers must operate efficiently despite the extreme heat. To overcome this, Gulf Data Hub has implemented AI-driven energy management systems that optimize power usage and cooling processes. Our data centers in Dubai and Riyadh use advanced machine learning algorithms to analyze and adjust energy consumption in real-time, resulting in a 25 percent reduction in overall energy usage. Additionally, we are exploring the integration of more renewable energy sources, such as wind and solar power, to further reduce our reliance on traditional energy grids. These sustainable energy solutions not only mitigate the environmental impact of our operations but also provide a more stable and predictable energy supply, which is critical for scaling up in a region where energy costs can be volatile.
Maintaining operational efficiency as data centers expand is another challenge in the Middle East, particularly in markets like the UAE and Saudi Arabia, where the demand for digital services is growing rapidly. To address this, Gulf Data Hub has implemented advanced automation solutions across our facilities. Automation streamlines various aspects of data center management, from server deployment to network configuration, allowing us to scale quickly and efficiently. For example, our automated systems have reduced the time required for server deployment by 40 percent, enabling us to meet the increasing demands of our clients without compromising on service quality.
Security is a critical concern when scaling up data center operations in the Middle East, given the region’s complex geopolitical landscape. To mitigate security risks, Gulf Data Hub has invested heavily in AI-powered security systems that can detect and respond to threats in real-time. Our facilities in the UAE and KSA are equipped with state-of-the-art security protocols that leverage machine learning to identify patterns of suspicious activity and take proactive measures to prevent breaches. This approach has resulted in a 60% reduction in security incidents across our
data centers, ensuring that our clients’ data remains secure as we continue to expand our operations.
Finally, addressing the physical constraints of data centers, such as space and cooling capacity, is essential for scaling up in the Middle East. Gulf Data Hub has adopted innovative architectural designs and advanced cooling technologies to maximize efficiency in our facilities. For instance, we have implemented liquid cooling systems in our highdensity data centers in Dubai, which use coolant liquids to dissipate heat more efficiently than traditional air cooling methods. This technology allows us to pack more servers into a smaller physical space, optimizing our infrastructure to meet growing demand without compromising performance. Additionally, we are exploring modular data center designs that enable incremental expansion, providing the flexibility needed to scale up quickly in response to market demands.
Conclusion
The data center industry in the Middle East is at a pivotal moment, with AI driving significant advancements in efficiency, sustainability, and security. As the region continues to embrace digital transformation, the colocation market is poised for substantial growth, shaped by trends like edge computing, sustainability, and hybrid cloud adoption. However, scaling up operations in the Middle East presents unique challenges, from managing energy consumption in harsh climates to ensuring security in a complex geopolitical landscape. At Gulf Data Hub, we are committed to overcoming these challenges through innovative solutions, ensuring that we continue to lead the region in providing world-class colocation services that meet the demands of the future. By integrating AI-driven technologies, adopting sustainable practices, and leveraging advanced security measures, we are not only enhancing our operational capabilities but also contributing to the region’s broader goals of economic diversification and environmental sustainability.
Emerging Markets to watch out for in the Middle East
At W.Media, we keep a keen eye on promising emerging markets that are on their way to shine as bright as the established ones.
By Deborah Grey
The Middle East has an abundance of such markets, and in this issue, we are taking a closer look at three of them: Bahrain, Oman and Qatar.
Bahrain
Bahrain, an island kingdom located in the Persian Gulf, just off the northeastern coast of Saudi Arabia, is today emerging as one of the data center markets to watch out for in the Middle East. Bahrain offers investors proximity to three continents – Asia, Africa and Europe.
Bahrain’s Economic Development Board (EDB) which is a public agency responsible for attracting inward investment into Bahrain, spotlights this strategic location and connectivity in a document titled Better Data Centers Think Bahrain, saying, “Bahrain is connected to more than 50 countries through terrestrial & submarine fiber optic cables, global POPs and data centers.” It also showcases the
availability of power, competitive cost of doing business, as well as a favourable business and regulatory environment as reasons that make Bahrain a good data center destination.
A Cloud First strategy, and initiatives like Bahrain Economic Vision 2030, are together driving the digital transformation of this island kingdom. Other factors contributing to the growth of the market here include the advent of emerging and fast evolving technologies such as Artificial Intelligence (AI), Machine Learning (ML) and Internet of Things (IoT), as well as the need for handling Big Data, and the roll out of 5G networks.
According to Knight Frank’s Data Centers: The MENA Report, “Bahrain historically demonstrated a sixty-forty split between a retail colocation and a service provider focus, which altered in the first quarter of 2019 towards Public Cloud offerings, which now account for 67 percent of market capacity.”
As per Arizton Intelligence, the Bahrain data center market was valued at US$ 167 million in 2023, and
Bahrain
Market Size in 2023: US$ 167 million
Expected Market Size in 2028: US$ 291 million
Major players: Amazon Web Services (AWS), Batelco (Beyon Group), Tencent Cloud, Zain
Source: Arizton Intelligence
is expected to grow at a Compounded Average Growth Rate (CAGR) of over 9.7 percent, crossing US$291 million by 2029.
Oman
Oman is yet another Middle Eastern nation that is looking at digital transformation as a means to gradually modernise its economy and make it less oil-dependent. This transformation is driven by initiatives like Oman Vision 2040, which is the government’s plan for socio-economic development powered by strategic investments into education and technology to foster a culture of innovation.
The vision document aims to create infrastructure that helps improve governance, makes the economy competitive, encourages creativity and also enables a commitment to sustainability. All this, along with an increasing emphasis on data sovereignty, is fuelling the demand for data storage as well as compute power.
In its report titled Future of Data Centers in MEA 2023, JLL has listed Oman as an important secondary market witnessing investment growth and said that it is “considered one of the major regional digital hubs” and that Oman is “focusing on increasing investments in data centres by
enhancing its digital infrastructure with 5G networks.” The report further spotlights Oman’s connectivity infrastructure saying it is making “efforts to enhance international connectivity by further expanding on its 14 existing submarine cables that are connected to the Europe, Middle East, and Africa (EMEA) and Asia regions.”
According to Arizton Intelligence, the Oman data center market was valued at US$ 181 million in 2023, and is expected to reach US$ 326 million by 2029, growing at a Compounded Average Growth Rate (CAGR) of 10.30 percent during the forecast period (2024-2029).
Qatar
Qatar is one of the fastest-growing economies in the Middle East, and has been on its digital transformation journey for over a decade. Aided by government initiatives like Qatar National Vision 2030 and Smart Qatar, this Gulf nation is on track to become a major hub of business and technology. Global players have been flocking to Qatar; among them, Microsoft launched a data center region in the country in 2022.
In its Qatar Data Center Market Report, Imarc says that the Qatar data center market is projected to exhibit a growth rate (CAGR) of 10.70 percent during 2024-2032. The market in Qatar is majorly driven by the increasing internet penetration, the rising demand for cloud services, government digital transformation initiatives, the growing adoption of IoT and big data analytics, rapid expansion of multinational corporations, and continual technological advancements in data center infrastructure.
Arizton Intelligence says, “The Qatar data center market size will witness investments of USD 418.5 million by 2028, growing at a CAGR of 7.98 percent during the forecast period.”
Oman
Market Size in 2023:
US$ 181 million
Expected Market Size in 2028: US$ 326 million
Major players: Equinix, Oman Data Park, Cloud Acropolis
Source: Arizton Intelligence
Meanwhile, according to Statista, Qatar’s AI market size is expected to reach US$ 428.4 million this year. It further says that the market size is expected to show an annual growth rate (CAGR 2024-2030) of 28.66 percent, resulting in a market volume of US$ 1,943 million by 2030. Needless to say, AI will be front and center in Qatar’s digital transformation journey.
Qatar Market Size in 2023:
US$ 264 million
Expected Market Size in 2028: US$ 418.5 million
Major players: MEEZA, Ooredoo, Gulf Data Hub, Quantum Switch
Source: Arizton Intelligence
Conclusion
According to Priyanka Nagpal (Data Centre Lead, MENA), “The emerging markets of Bahrain, Qatar, and Oman are generating substantial interest in the field of data centers. These markets are drawing the attention of international tech companies seeking to diversify and establish data centers, owing to a multitude of advantageous factors.” She further explains,
“Investments in cloud services, favorable regulatory frameworks, reliable subsea cable connectivity, and robust telecom infrastructure contribute to the appeal of these markets. Furthermore, tailored incentives for economic diversification provided by the government and the presence of special economic zones are attracting tech companies to explore these markets.”
Well, we are going to keep tracking the growth in these markets, so check out the Middle East section of our news website at https://w.media/category/ middle-east-news/
What makes Saudi Arabia such an exciting DC market
As Saudi Arabia continues to diversify its economy under Saudi Vision 2030, the data center market has emerged as a critical component in the region’s technological and economic transformation.
By Stephen Beard , Global Head, Data Centers, Knight Frank Hub
This sector is poised for significant growth, driven by increased digitalisation and a robust infrastructure development plan. The region’s data center market currently totals 640 MW IT of which 124 MW IT is live and 138 MW IT is under construction. Like any emerging market, it faces its own set of strengths, weaknesses, and opportunities.
Strengths
Strategic Location: Saudi Arabia’s geographical position serves as a strategic hub connecting the East and West. This central location is advantageous for data centers that need to serve both regional and international markets. The kingdom’s connectivity to major global data routes enhances its appeal as a data center location.
Government Support: The Saudi government’s Vision 2030 emphasises technological advancement and digital infrastructure. Initiatives such as the National Industrial Development and Logistics Program (NIDLP) and investments in smart cities provide substantial support for data center development. This backing includes
financial incentives, streamlined regulations, and enhanced infrastructure.
The Vision 2030 initiative further launched the National Transformation Program (NTP) in 2016 to achieve strategic goals, such as empowering the private sector, fostering economic partnerships, and accelerating digital transformation, with specific reference to supporting data center development with the aim of improving digital infrastructure and applications related to customer service.
The Saudi Data and Artificial Intelligence Authority (SDAIA) in collaboration with the NTP, has implemented initiatives such as the National Data Index (NDI) to promote transparency, a data-driven economy and fostering open data collaboration among government, local and international entities, and businesses. SDAIA’s efforts aim to build trust in open data, encourage data sharing, and advance AI and innovation topics in the kingdom.
The adoption of a National Strategy for Data and Artificial Intelligence (NSDAI) reiterates Saudi Arabia’s commitment to leverage responsible AI in achieving its national digital transformation objectives, boosting the ICT sector’s contribution to the Kingdom’s Gross Domestic GDP.
Saudi Arabia also has a ‘Cloud First’ policy, which will fuel the growth of Cloud in the Kingdom. The policy launched in 2020 mandates, “For any new IT investment, civilian government entities should consider Cloud solutions as opposed to internal / traditional solutions.” A government initiative that is expected to grow the market supply to 1,300 MW by 2030.
Growing Digital Economy:
With a rapidly expanding digital economy, fuelled by increasing internet penetration and a young, tech-savvy population, there is a burgeoning demand for data storage and management solutions in KSA. The country’s total population of over 35 million, 3.5 times larger than the UAE - its main challenger to becoming the regional hub, includes two-thirds who are under 35, representing an age cohort of early tech adopters. The average daily mobile internet data consumption per individual in the Kingdom has also exceeded 1.2 GB, three times the global average. The rise of e-commerce, social media, cloud computing services, and the proliferation of AI all contribute to this growth, creating a substantial market for data centers.
Testament to this are the announcements made earlier this year by Ezditek and AWS. A strategic alliance between Ezditek and Gcore aims to position the KSA as a global hub for AI innovation, with a key focus on sustainability through the delivery of the capacity for AI/ GPU computing within 5 years, across nine data centers (totalling 28MW), located in Riyadh (three), Jeddah (three), and Dammam (three).
AWS has plans to invest more than US$ 5.3billion for a new cloud region in the KSA. The new AWS Region will consist of three availability zones at launch to support the growth in cloud adoption across the Kingdom.
Further, Oracle recently announced a new US$ 1.5 billion Riyadh Cloud Region to join their existing Jeddah Cloud Region and the planned Oracle Cloud Region in NEOM. This will help boost the Kingdom’s
As part of Vision 2030, Saudi Arabia is making significant investments in infrastructure, energy, transport, and telecommunications
AI economy, which is expected to reach US$ 135.2 billion by 2030.
Infrastructure Development:
As part of Vision 2030, Saudi Arabia is making significant investments in infrastructure, energy, transport, and telecommunications to support the development of data centers and efficient data management. Alongside directly supporting local investments in the telecommunications and information technology sectors, the government aims to enhance highspeed broadband coverage, targeting over 90 percent housing coverage in densely populated cities and 66 percent in other urban areas. This initiative includes partnering with the private sector, strengthening digital transformation governance through a national council, and improving regulations and partnerships with telecom operators.
Mobile internet speed in the Kingdom has now exceeded 181 mbps, twice the global average, and is now one of the top ten countries in the world for mobile internet speed. Saudi Arabia has launched high-speed internet service in 21,000 villages and immigration areas of various regions of the Kingdom, ensuring the continuity of communication services for more than 5 million people with 5G coverage in the Kingdom now increasing to 53 percent, while in Riyadh, it has exceeded 94 percent.
Resource: Saudi Arabia presents compelling advantages for data center development given its low cost of raw power (US$ 0.045/kWh) and abundance of land. The country’s substantial reserves of oil and gas enable it to offer competitively priced energy, which is a significant operational cost for data centers. This affordable power is another factor that is drawing international operators to the region. Additionally, Saudi Arabia’s vast and available land provides ample space for the construction and expansion of large-scale data centers. This availability not only supports the growth of data center operations but also offers flexibility for scaling infrastructure to meet increasing demand.
Weaknesses
Energy Dependency: While Saudi Arabia has abundant energy resources, data centers are notorious for their high energy consumption. The reliance on fossil fuels for power generation poses sustainability concerns and could lead to increased operational costs as the world shifts towards greener energy solutions. The kingdom is working to address this through renewable energy projects, but progress is ongoing.
Regulatory Challenges: Despite significant improvements, the regulatory environment in Saudi Arabia can be complex and evolving. Companies operating in the data center space may face challenges related to compliance, data sovereignty laws, and import/export restrictions on technology and equipment.
Workforce: The rapid pace of technological advancement requires a skilled workforce. Saudi Arabia faces a challenge in terms of having enough trained professionals in data center operations, cybersecurity, and IT management. This skills gap can slow down the sector’s growth and affect service quality. Additionally, the high cost of labour in Saudi Arabia, compared to other GCC countries, further exacerbates the challenge, potentially leading to increased operational expenses and impacting the overall competitiveness of the sector.
Market Competition: The data center market is becoming increasingly competitive as global and regional players enter the Saudi market. This influx of competition can drive up costs and exert pressure on local providers to enhance their service offerings and operational efficiencies.
Opportunities
Digital Transformation: The kingdom’s push towards digital transformation presents a significant opportunity for data center growth. The expansion of cloud services, big data analytics, and Internet of Things (IoT) applications creates a substantial demand for data storage and processing capabilities.
Renewable Energy Integration: There is an opportunity for data centers to integrate renewable energy sources into their operations. Saudi Arabia’s investments in solar, as seen with the Al Maktoum Solar Park in Dubai, and wind energy can provide a sustainable energy solution for data centers,
reducing dependency on fossil fuels and aligning with global sustainability trends.
Strategic Partnerships: Collaboration between local and international players can drive innovation and growth. Partnerships with global technology firms and data center operators can bring in advanced technologies and expertise, enhancing the sector’s capabilities and competitive edge.
Smart City Projects: Whilst Riyadh, Jeddah, and Dammam are the primary locations for investment, Saudi Arabia’s ambitious smart city projects, such as NEOM and King Abdullah Economic City, present a lucrative opportunity for data center providers. These projects require extensive data infrastructure to support smart technologies and digital services, creating a robust demand for high-quality data centers. Examples of such can be seen with the NEOM joint venture with Ezditek for the development of a new 36MW IT phase one data center which will host Oracle, and an 18,000sqm data center delivered by Tonomus.
In conclusion
The Saudi Arabian data center market is poised for significant growth within the coming years. In 2023, the region’s data center market size was valued at USD 1.78 billion in 2023. We believe that an additional ~750 MW of IT capacity, across cloud and AI, will need to be developed in the next five years to meet rising demands. With 19 data centers currently under construction, totalling 138 MW IT capacity, the predicted ~750 MW IT requirement should be exceeded as the KSA market is expected to reach over 1 GW by 2030; with the overall market size reaching USD 3.18 billion by 2029, growing at a CAGR of 10.13%. The KSA boasts significant strengths and opportunities paving the way for growth, and as the Kingdom continues its path toward technological advancement and economic diversification, the data center sector will play a crucial role in supporting its digital infrastructure needs.
Subsea Cable Systems Connecting the Middle East to the World
The Middle East serves as a crucial hub for global connectivity, with numerous subsea cables linking the region to Europe, Africa, and Asia. These cables facilitate data transfer, international communications, and business operations.
By Hazel Moises
Key Cable Systems and Connections
• Asia Africa Europe-1 (AAE-1): This cable system connects Asia to Africa and Europe, passing through the Middle East. It serves as a major backbone for internet traffic in the region.
• Europe India Gateway (EIG): As the name suggests, this cable connects Europe to India, passing through the Middle East. It provides a direct route for data traffic between these regions.
• 2Africa: One of the longest submarine cables in the world, 2Africa connects Africa to Europe and Asia. It passes through the
Middle East, offering significant capacity and redundancy.
• Middle East North Africa (MENA) Cable System: This system primarily focuses on connecting countries within the Middle East and North Africa, providing regional connectivity.
• Gulf Bridge International Cable System (GBICS): Another regional cable system, GBICS connects several countries in the Gulf region, including Saudi Arabia, Bahrain, Kuwait, Qatar, and the United Arab Emirates.
Recent additions
• Blue: This cable, ready for service in 2023, connects Cyprus, Greece, Italy, Israel, Libya, and Jordan.
• Saudi Vision: Another 2023 addition, this cable links various cities within Saudi Arabia.
• Red2Med: Launched in 2023, this cable connects Egypt to the Mediterranean Sea.
Cable Landing Stations in Key Markets
The following maps illustrate the number of cable landing stations in and around key Middle Eastern markets.
Upcoming Projects
Several new cables are scheduled to be ready for service between 2025 and 2026, including Africa-1, ANDROMEDA, Raman, SeaMeWe-6, and India Europe Xpress (IEX). These additions will further enhance connectivity and capacity in the region.
Key markets and their cable connections:
• Dubai, United Arab Emirates: FALCON, Fiber Optic Gulf (FOG), Tata TGN-Gulf
• Saudi Arabia: 2Africa, Africa-12024, ANDROMEDA2025, AAE-1, EIG, FALCON, FEA, GBICS/ MENA, IMEWE, IEX2025, MENA Cable System, PEACE Cable, Raman2025, SAS-1, SAS-2, Saudi Vision, SEACOM/Tata TGN-Eurasia, SeaMeWe-3, SeaMeWe-4, SeaMeWe-5, SeaMeWe-62025, Tata TGN-Gulf
• Oman: 2Africa, AAE-1, BBG, EIG, FALCON, GBICS/MENA, G2A, IEX2025, MENA Cable System, OAC, OMRAN/EPEG, POI Network, Raman2025, SeaMeWe-3, SeaMeWe-5, SeaMeWe-62025, Tata TGNGulf, Transworld (TW1)
• Bahrain: 2Africa, FALCON, FOG, GBICS/MENA, SeaMeWe-62025, Tata TGN-Gulf
• Qatar: 2Africa, AAE-1, FALCON, FOG, GBICS/MENA, Qatar-U.A.E. Submarine Cable System, SeaMeWe-62025, Tata TGN-Gulf
Dubai, United Arab Emirates
Oman
Qatar
Saudi Arabia
Bahrain
Strong increase across the Middle East in the deployment of 5G, AI/ML cloud, big data, and IoT services together with strong Government support have been strong drivers for the growth of the United Arab Emirates data centre industry. Further digital innovations such as Smart City investments are also driving the growth of digital infrastructure and networks.
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Event Brief
Saudi Arabia is a G20 economy and the largest economy in the Arab World and the Middle East. It has made strong progress in transforming its economy away from a dependence on hydrocarbon resources and through this process is attracting strong investment interest into the digital infrastructure to enable its transformation. This investment momentum is driven also by a high standard of living and the support of the country’s leaders.
Women Leading the Digital Revolution in the Middle East
The Middle East is witnessing a rapid digital transformation, and at the forefront of this revolution are a growing number of talented women. These trailblazers are breaking down barriers, challenging stereotypes, and driving innovation across various sectors. Let’s spotlight three remarkable women who are shaping the region’s digital landscape.
By Hazel Moises
Moza Al Shamsi, an Enterprise Technologies Manager at Creative Media Authority, is a visionary leader who is driving digital transformation within the government sector. With her expertise in information technology and a deep understanding of user-centric design, she has been instrumental in delivering innovative solutions and enhancing public services.
Al Shamsi’s commitment to excellence is evident in her approach to leadership. She fosters a collaborative and inclusive work environment, empowering her team to reach their full potential. Her focus on continuous professional development ensures that her organization remains at the forefront of technological advancements. As she reflects on her career journey, Al Shamsi emphasizes the importance of pursuing one’s passions and taking calculated risks. She draws inspiration from the words of Sheikh Mohammed Bin Rashid, who once said, “The biggest risk in life is not taking any risks.”
Her dedication to public service is a driving force behind her work. She believes that technology can be a powerful tool for improving the lives of citizens and promoting social progress. Al Shamsi is committed to leveraging her expertise to create a more equitable and sustainable future for all.
These pioneers are paving the way for other women to pursue careers in technology by breaking down barriers and challenging stereotypes
The contributions of these remarkable women are not only transforming industries but also inspiring the next generation of female leaders. Their success is a testament to the talent and potential of women in the tech industry.
These pioneers are paving the way for other women to pursue careers in technology by breaking down barriers and challenging stereotypes. They are role models who demonstrate that women can excel in traditionally maledominated fields.
Moreover, their work is having a significant impact on the Middle East’s digital transformation. They are helping to create a more competitive and dynamic economy by driving innovation and adopting new technologies. Their contributions are essential to the region’s economic growth and development.
Moza Al Shamsi: Driving Digital Transformation in Government
Alfhadah Albaiz, Sales Director for Communication, Media, and Telco Saudi at Accenture, is a force to be reckoned with in the tech industry. With her extensive experience and deep understanding of technology, she has been instrumental in driving transformative projects across the region.
As a certified Industry 4.0 professional and an alumna of the prestigious MISK Leadership 2030 program, Alfhadah is committed to staying at the forefront of technological advancements. Her thought leadership and insights have been showcased at numerous international and local conferences, cementing her reputation as a leading expert in the field.
Fadwa Saad AlBawardi, a Saudi Arabian Entrepreneur and AI/Strategic Planning trainer, is a true pioneer in the field of digital transformation. With over 21 years of experience, she has established herself as a trusted consultant and thought leader.
AlBawardi’s passion for technology is evident in her dedication to empowering others through education and training. She has authored numerous technical publications, including a USA Today Bestselling book, and is a regular columnist in KSA digital journals. Her expertise in AI and strategic planning has made her a sought-after speaker at international conferences, including the United Nations IGF2023 and AI for Good Summit 2024.
The Future of Women in Technology
As the Middle East continues to embrace technology, it is clear that women will play a pivotal role in shaping its future. The region is home to a growing number of talented women who are passionate about technology and eager to make a difference.
However, there is still work to be done to ensure that women have equal opportunities in the tech industry. It is essential to address gender bias, provide mentorship and training programs, and create a supportive work environment for women.
The Middle East can harness the full potential of its female talent by investing in women’s education and careers in technology. This will not only drive economic growth but also create a more inclusive and equitable society.
The pioneers featured above are inspiring examples of the incredible contributions that women can make to the field of technology. Their success is a testament to the power of diversity and the importance of empowering women to reach their full potential. Thus, it is clear that women will play
Alfhadah’s unwavering belief in the power of innovation is evident in her work. She emphasizes the importance of embracing new technologies and leveraging them to create a more connected and sustainable future. As she aptly puts it, ““Embrace innovation as a pillar of progress, for it is through the fusion of unique perspectives and groundbreaking ideas that we shape a brighter, more connected future.”
Beyond her professional accomplishments, Alfhadah is a passionate advocate for women in technology. She is an active member of the Women in Tech Saudi Chapter, where she works tirelessly to empower and inspire other women in the field. Her commitment to diversity and inclusion is a driving force behind her work.
AlBawardi’s journey is a testament to the power of perseverance and determination. As she shares, “In a world driven by innovation, my passion for the tech industry ignites from the relentless pursuit of knowledge and empowerment. As a Saudi Arabian woman entrepreneur, I am fueled by the transformative potential of technology, shaping futures through consultancy and training.”
Her commitment to education and training is not limited to her professional work. AlBawardi is a strong believer in the power of lifelong learning and encourages others to pursue their passions and develop their skills. She is a mentor to many aspiring professionals and is dedicated to helping them achieve their goals.
The pioneers featured above are inspiring examples of the incredible contributions that women can make to the field of technology
a vital role in shaping its future as the Middle East continues to embrace digital transformation.
Alfhadah Albaiz: A Visionary in Technology Leadership
Fadwa Saad AlBawardi: Empowering Through AI and Strategy
Celebrating Dubai: The Queen of the Middle East Data Center Market
This October, it’s time for W.Media’s Dubai Cloud & Datacenter Convention (CDC) and Awards. This is an exclusive day-long convention that will see participation from over 1,000 of the crème de la crème of the data center industry.
These include experts and thought leaders, including C-level executives, digital infrastructure professionals such as architects, engineers and consultants (AECs), key buyers, decision makers, data center owners and operators.
Delegates hail, not only from the United Arab Emirates (UAE), but also its neighbouring countries in the Middle East and North Africa (MENA) region. This is the third edition of the Dubai CDC.
Data Center boom in the UAE According to Arizton Advisory & Intelligence, the UAE data center market was valued at US$ 1.5 billion in 2023, and is expected to reach US$ 2.65 billion by 2029, growing at a Compounded Average Growth Rate (CAGR) of 9.95 percent during the forecast period.
Meanwhile, Mordor Intelligence estimates tthe IT capacity of the
industry in the UAE to be 429.3 MW and expects it to reach 841 MW by 2029, growing at a CAGR of 14.39 percent. It further expects the market to generate colocation revenue of USD 5,575 million in 2024, and says that this figure is projected to reach USD 12,897.9 million by 2029, growing at a CAGR of 18.26 percent during the forecast period (2024-2029).
Eye on Dubai
Dubai has been the uncrowned queen of this market. In its Data Centers | The MENA Report, Knight Frank sheds light on Dubai’s journey saying, “The creation of the Dubai Internet City (DIC) in October 2000 played a pivotal role in attracting innovative technology companies to the country. This influx served to emphasise the vital role of data centres in future business growth, and so data centre investment and development started to meet rising demand. Subsequent government initiatives, including tax incentives and regulatory frameworks, further encouraged the industry’s growth.”
It goes on to say, “During the 2010s, international data centre providers started entering the market, enhancing the quality and global connectivity of data centre services. Ambitions, of both Dubai and Abu Dhabi, to become global technology and business hubs have meant additional government support more recently. This, coupled with a focus on sustainability and innovation, is solidifying the UAE’s position as a major data centre market.”
“The city has emerged as a prominent data center destination
in the Middle East due to its strategic location, advanced infrastructure, and business-friendly policies,” says Priyanka Nagpal (Data Centre Lead, MENA, JLL). “It offers robust and reliable power and connectivity through fiber networks, which is further supported by government initiatives designed to foster the growth of AI and data center advancement. Additionally, Dubai’s position as a gateway to emerging markets in the region further enhances its appeal for companies looking to expand their digital presence,” she adds.
“W.Media has always had its eye on Dubai, as we have seen it grow and evolve into one of the most exciting data center markets in the Middle East,” says Naveen Lawrence, Director - Sales, South Asia & Middle East, W.Media. “Dubai’s passion for innovation and favourable regulatory environment make it an attractive data center destination for not just Gulf based companies, but also for cloud and data center providers from across the world,” he adds.
Dubai Cloud & Datacenter Convention and Awards 2024
This Convention is part of the wider Gulf Digital Infrastructure Week that begins on October 20, with a unique Golf Tournament where nearly 100 industry professionals will network as they tee off. The next day, W.Media will lead a Gulf Business Mission Trip where we will take select delegates to a state-of-the-art data center in Dubai. On the final day, October 22, 2024, we will hold the Dubai Cloud & Datacenter Convention and Awards at The Conrad, Dubai.
Eye on Saudi Arabia: The Fastest-growing Data Center market in the Middle East
The cloud and data center market in the Middle East is growing and evolving rapidly, and the Kingdom of Saudi Arabia (KSA) is one of the fastest growing markets in the region.
Some of the most prominent data center players here include Gulf Data Hub, GO Datacenter (Etihad Atheeb Telecom), NourNET, Mobily, etc. Oracle and Google, already have Cloud Regions in the Kingdom, while Microsoft announced in February 2023 that it was planning a Cloud Region in KSA.
According to Arizton Advisory & Intelligence, the Saudi Arabian data center market was valued at UD$ 1.7 billion in 2023, and is expected to reach US$ 3.8 billion by 2029, growing at a Compounded Average Growth Rate (CAGR) of 10.13 percent to reach an IT load capacity of 175 MW.
Meanwhile, Mordor Intelligence estimated the IT load capacity of the Saudi Arabian data center market at about 345 MW in 2024, and projected it to touch 854 MW by 2029, growing at a CAGR of 19.88 percent. It also expects the market to generate colocation revenue worth US$ 5.2 billion in 2024, and expects it to touch US$ 13.5 billion by 2029, growing at a CAGR of 20.76 percent.
What makes Saudi Arabia such an attractive Data Center destination? In its bid to move away from its traditional oil-based economy, Saudi Arabia is investing heavily into technology, telecom, smart cities and infrastructure. It is also investing in renewable energy projects like solar parks and hydrogen fuel plants. All of this creates the perfect ecosystem for the data center industry to thrive.
Today, Saudi Arabia’s capital city, Riyadh, has emerged as the foremost data center market in the kingdom. “The Riyadh data center market is rapidly growing due to cloud adoption and government support through Vision 2030, emphasizing sustainability and innovation. This has attracted international investments and partnerships, enhancing digital infrastructure,” says Priyanka Nagpal (Data Centre Lead, MENA, JLL).
Another huge market is the industrial hub of Dammam. “Dammam is strategically located with proximity to major industrial areas, and strong support for technological infrastructure. The city’s potential as a data center market is significantly bolstered by its proximity to cable landing stations which provide direct access to international fiber-optic cables, enhancing connectivity and reducing latency,” explains Nagpal.
Another potential blockbuster market is the upcoming futuristic project called NEOM, where the industrial hub named Oxagon already has one data center, and one hydrogen fuel plant. Given how tech-driven NEOM is going to become when it
is fully developed, a cloud region is also being planned for it. “NEOM’s Oxagon is an emerging submarket and has the potential to develop as a data center market. With its strategic location, innovative design, and focus on advanced technology and sustainability, it aims to attract tech investments,” says Nagpal.
Coming up: Saudi CDC
W. Media recognises the value of this fast-growing market, and will return to Riyadh for the second edition of Saudi Cloud & Datacenter Convention (CDC) on December 10, 2024. This day-long convention will be held at the Crowne Plaza Hotel in Riyadh, and is expected to draw over 300 experts and thought leaders, including C-level executives, digital infrastructure professionals including architects, engineers and consultants (AECs), key buyers, decision makers, data center owners and operators.
Hyperscale: Where to next?
By Paul Mah
What’s next for data centers? As with every technological trend, it is difficult to predict with any certainty. However, one only needs to look at the current demand drivers and the technologies making their way into data centers to glimpse what the future might hold.
My prediction? Data centers will continue to expand and become far more resource-efficient.
Multi-campus AI training
Like Pandora’s box, once opened, there’s no going back to a time before ChatGPT transformed the world. Generative AI is here to stay, and even the most sceptical among us would agree that the future will inevitably include AI in some form.
Even if AI advancements were to come to a complete halt right this moment, the changes already set
in motion would continue to ripple through industries and society –ensuring AI’s ongoing use into the foreseeable future.
As global AI usage grows, AI inference will increasingly happen on client devices like smartphones and personal computers. This trend is already underway as device makers incorporate AI capabilities into their latest gadgets. Expect inference to also grow within data centers, driven by more advanced AI systems like OpenAI’s new o1 “reasoning” model.
What about AI training? Today, a fierce competition is underway as numerous tech firms vie to develop increasingly sophisticated AIs. For those at the forefront of this race, AI training infrastructure is expanding at a breathtaking rate. Cutting-edge AI models now require training clusters with up to 100,000 GPUs, which underscores the immense computational power required.
Multiple data center campuses with up to 300,000 GPUs, directly interconnected with dense networks of
dark fiber, are being designed and built. This makes million-GPU clusters no longer improbable.
Enterprises are just as eager to embrace AI. While they are unlikely to train AI models from scratch, they are deploying private AI models tailored to their specific business needs and data sets.
More sustainable data centers
Data centers will become more efficient too. The largest tech giants are already implementing direct-tochip cooling for their AI workloads to reduce energy consumption and lower their energy bills. Expect this trend to accelerate as enterprises seek sustainable solutions for their growing computational and AI demands.
The market is ripe for liquid cooling. Over the last few months, I’ve seen and learned about liquid cooling solutions from various vendors. Liquid cooling isn’t new, but what has changed are the refinements in design and how they are productionalised for versatile, large-scale deployments.
To be clear, data center deployments with lower power demands won’t disappear, so air cooling will remain prevalent. However, a vibrant ecosystem of hybrid cooling solutions will offer more options for discerning users to move the needle on sustainability. Finally, the integration of renewable energy sources into data center operations will become standard practice, though this may take many years to fully implement.
The future of data centers is shaping up to be more than just technological advancement, but a significant shift in digital infrastructure. We are entering an era defined by unprecedented scalability, enhanced efficiency, and – I hope – a steadfast commitment to sustainability.
