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. 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 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.” 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.
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.”
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This piece was originally published in Issue 6 of w.media Cloud & Data Center Magazine
