A data center can provide stable and reliable operating environments with advanced computing, storage and information capabilities. By 2023, the global data center industry is expected to grow further, be more dynamic and deliver optimal efficiency and resiliency.
Regional Overview
Data center spending on data and related services is strong, despite talent shortages and supply chain delays across regions. According to analysis, the Middle East and North Africa (MENA) data center market is estimated at US$3.4 billion in 2022 and is expected to reach US$10.4 billion by 2028. The MENA data center spending, including servers, network equipment and storage, would hit an estimated US$5–6 billion, up 3–5% from last year.
In the Middle East, the IT and telecom sector is driving the data center demand due to the increase in cloud adoption, data localization and maturing technologies like 5G, AI and IoT.
The Middle East is indeed on the path of rapid cloud growth in the coming years, in line with various public sector initiatives such as New Kuwait 2035’s nationwide digital roadmap, the UAE Vision 2021 towards a fully digitalized society, Bahrain’s Cloud-First policy utilizing cloud computing services and the billion-dollar plan to build a large-scale data center network across the Kingdom of Saudi Arabia.
In 2022, various initiatives have been implemented to cater to data center demand in the region. These include Nokia launching 5G private wireless networks to support enterprise digital transformation; Amazon Web Services (AWS) launching a cloud-based region in the UAE; e& opening its cable landing station and data center called SmartHub Kalba; Ooredoo Oman constructing three more state-of-the-art Tier 3 data centers with 500 rack-capacity in Barka, Salalah and Sohar; and new data centers from stc and partners unveiled in Riyadh to provide a wide range of proven and secure public cloud computing solutions.
Additionally, the African data center market is also in the midst of a remarkable growth surge, having spent a cumulative US$2 billion in building data center facilities since 2017, bringing to market more than 200 MW of fresh commercial IT load capacity. It has become one of the world’s top locations for the fastest-growing commercial data center deployments.
Unsurprisingly, North America also dominates the data center market owing to the presence of several technology giants and other large enterprises. There are over 2,750 data centers in the United States alone, which is the most of any country. The adoption of competitive strategies such as partnerships, mergers, acquisitions and joint ventures is prominent in this market.
Data Center Growth Drivers
With the digitization of existing processes, usage of digital technologies across sectors and SMEs, accelerated demand for OTT services and the new normal hybrid working model, data centers have huge pressure to collect, store, process and analyze chunks of data.
Here are some of the growth drivers that influence the data center trends for 2023:
Cloud-based solutions. The growing use of SaaS cloud solutions has generated data center market expansion opportunities. For more scalability and easier distribution of workloads across servers, there will be more migration to software-defined data centers (SDDCs). These data centers utilize virtualization technologies to recreate computing power and storage in software form. Edge computing is also one of the prominent technological developments for data centers in 2023, aiming to bring down latency and improve the overall performance of connected devices. Hybrid cloud deployments are also on the rise, where critical data and resources are managed on secure private servers and can be moved to a public server for different processing requirements.
Intelligent automation. Through integrating APIs, configuration management tools, AI and other relevant technologies to automate routine procedures like patching, updating and reporting, as well as programming all data center scheduling and monitoring tasks, data center automation will play a vital role in accessing real-time information and conducting troubleshooting of inefficiencies. In addition, automated infrastructure management (AIM) is becoming a go-to solution for increasingly complex data center infrastructures.
5G adoption. The buildout of private 5G in the cloud is already happening. This data-intensive, latency-sensitive application will further drive growth in edge and traditional data centers. This will be evident as carriers get more access to 5G spectrum and enable more industrial use cases.
Better data protection. Security is integral to the data center’s DNA. From 2023 onwards, better data protection is expected through both physical and digital security. Measures may include a zero-trust framework, perimeter defense systems, the latest data encryption, enhanced network filtering and improved biometric technology to protect, limit and secure access control.
Eco-friendly measures. By contributing to 2% of the total global greenhouse gas emissions, data centers have a significant impact on climate change and the environment. Thus, data centers are striving to be more environmentally friendly by having sustainable designs, recyclable equipment, renewable power sources and comprehensive reporting.
In Demand: Colocation Data Centers
For decades, the data center has stood at or near the center of the network, and whether it is for enterprises, telco carriers, cable operators or content service providers, the data center serves as the heart and muscle of IT.
Theoretically speaking, data centers can be built anywhere there is power and connectivity. But it is important to consider what you need from a data center and incorporate those requirements into your data center strategy.
Established colocation data centers (colos) reported strong client demand as more companies outsource their data operations to third-party providers that specialize in data center operations. This is preferred due to the proximity of the client's premises and readily accessible IT servers.
Relatively, the demand for colos is expected to surge alongside the next wave of edge computing as CSPs seek colo space to deliver low-latency services. Having said that, among the greatest investments in data centers are from colocation service providers, making colos ideal for leasing physical space, power and cooling systems of servers, as well as connections to local communication networks.
With regards to these colos — aka multi-tenant data centers — customer networks are quickly flattening and spreading out far and wide to handle the increase in data-driven demands. The interiors are interconnected to keep pace with applications like IoT management, augmented reality clusters and AI processors. To address connectivity gaps, colocation providers are using virtual networks as cloud on-ramps.
Data Center Capacity and Efficiency
As the vision for next-generation networks comes into focus, the data center industry must confront the challenges of implementation. A CommScope whitepaper detailed it as the following: server connections will go from 50G per lane to 100G; switching bandwidth will increase to 25.6T; and migration to 100G technology into 800G pluggable modules.
In the data center, capacity is a matter of checks and balances among servers, switches and connectivity, with each aspect pushing the other to be faster and less expensive.
In the Middle East, the data center market is expected to double its capacity in the next few years, driven by strong digitalization and massive cloud adoption. The region’s data center footprint is mostly concentrated in the United Arab Emirates and Saudi Arabia, among other GCC countries.
Connected to this, CommScope recommends a holistic approach in which switches, optics and fiber cabling operate as a single coordinated transmission path. How all these components will work together will dictate the network’s ability to reliably and efficiently support new and future applications.
One solution being considered is integrated colocation data centers or cloud partner ecosystems. This will result in data centers that are interconnected and collaboratively support each other by sharing assets. Through automation, data-center efficiencies can also be improved by managing thousands of servers.
For hyperscale and cloud-based facilities, the need to deliver ultra-reliable connectivity for a growing number of users, devices and applications requires the ability to deploy and manage ever-higher fiber counts. Technologies like rollable ribbons and 200-micron fiber are deployed to support the increased demand for inter-data center connectivity.
In terms of maximum energy efficiency and minimal environmental damage, green data centers are being designed and built. As suggested, future efficiency gains will need to focus on IT power, requiring additional metrics to supplement power usage effectiveness (PUE).
Survey data forecasts that larger facilities tend to have the lowest PUEs, which means they will likely be running increasingly dense and more efficient infrastructures than smaller operations.
Half of the data center operators surveyed also stated that software-defined power is one of the technological innovations that will likely deliver significant improvements in data center energy efficiency in the next five years. Other technologies will emerge, evolve and be adopted gradually, such as green hydrogen and 10-hour to 10-day storage technologies.
Moreover, the growing use of public cloud infrastructures and cloud-style enterprise IT has been accompanied by the broader adoption of multi-site resiliency, making distributed redundancy easier because network traffic and workloads can be dynamically diverted to, and lost service easily recovered at, other sites.
Adopting a systematic approach is key to handling repeated periodic upgrades within data centers, reducing the time and cost needed to plan and implement the changes.
