By Henry Sutton, Founder GDCA
Welcome to the GDCA’s blog series! We’ll bring you insights and thought-leadership pieces on the latest trends affecting the GCC data centre market. Keep an eye on our LinkedIn and website for the latest updates. We may also look to open up our blogs to outside contributors, so watch this space!
In our second blog, we’re taking a look at the key innovations and trends that are affecting the GCC data centre market of today and the future.
The technology landscape today is ever evolving, and there’s no doubt that data centres stand as the backbone of this innovation, driving the digital transformation of industries and economies alike. In the GCC region, every market is experiencing a paradigm shift in its technological, and therefore, its data centre market. The pivotal trends reshaping the GCC data centre landscape include:
1.Cloud Dominance
GCC countries are embracing cloud computing at an unprecedented rate. In Saudi, spending on public cloud services is growing at a CAGR of 25% and is predicted reach $2.5 billion by 2026 while in the UAE cloud computing is set to add 2.5% to the country’s economy in the next ten years.
Businesses are shifting from traditional data centres to cloud-based solutions, leveraging the flexibility, scalability, and cost-efficiency that the cloud offers. This shift is fostering a robust cloud ecosystem, encouraging investments in both public and private cloud infrastructure across the region.
2.Edge Computing Emergence
The rise of IoT devices and the need for real-time data processing have led to the emergence of edge computing. Indeed, according the IDC’s Global DataSphere, between 2023 and 2037 the world’s data volume is expected to double, with 192 trillion gigabytes of data forecasted to be generated globally in 2025 alone. It’s also predicted that there will be three times as many IoT connected devices as there are people on earth.
In the GCC, the demand for edge facilities is growing, driven by applications in smart cities, autonomous vehicles, and IoT-driven industries. The revenue of IoT devices alone will exhibit CAGR of 14.55% by 2028, leading to a market volume of US$1.42bn. Edge data centres, located closer to end-users, ensure low latency and high-speed data processing will therefore be vital against this backdrop.
3.Renewable Energy Growth
Sustainability is at the core of GCC development, even outside of the data centre sector. The UAE has launched its first wind farm while Saudi has announced plans to launch the world’s biggest solar power plant.
On the data centre front, Bahrain’s Beyon announced a completely clean-energy powered data centre, and the UAE’s Khazna is prioritising energy-efficient builds. This is in line with the international industry’s focus on reducing carbon footprints and increasing adoption of renewable energy sources, such as solar and wind power. The integration of green energy not only reduces operational costs but also aligns with global environmental goals, making data centres more eco-friendly – and as the GCC looks to gain its foot on the world stage, prioritising sustainability is a must.
4.Cybersecurity Imperative
As data becomes more valuable, and cybersecurity breaches more costly, the importance of cybersecurity cannot be overstated. Indeed, the average cost of cyberattacks in the GCC is $6.93m per incident – well above the global average of $4.24m.
With strict regulations and compliance standards being enforced throughout the data centre industry, the GCC must become well prepared to implement robust security protocols to ensure the confidentiality and integrity of data stored and processed within these facilities.
Luckily, GCC countries are investing heavily in cybersecurity measures to safeguard against cyber threats, and are swiftly climbing the international ‘Network Readiness’ Index – with the UAE (28), Saudi Arabia (35) and Qatar (42) all coming in within the top 50 countries most prepared against cyberattacks.
5.AI and Automation Advancements
Artificial Intelligence (AI) and automation are revolutionising the world we live in, and the GCC is a fast-adopting region. The UAE’s G42 for instance, recently partnered with ChatGPT’s creator OpenAI in a bid to bring generative AI to organisations throughout the UAE and beyond, from healthcare to financial services.
The effect in the data centre sector? Predictive analytics and AI-driven insights are enhancing efficiency by optimising cooling, energy usage, and equipment maintenance. Automation is streamlining repetitive tasks, reducing human intervention and minimising the risk of errors, thereby improving overall data centre performance and reliability.
As the use of AI and automation steadily increases in the region, it shouldn’t be surprising that this spills in the data centre sector along the way.
6.Data Sovereignty Challenges
Data sovereignty – the concept that data is subject to the laws of the country in which it is located – is a growing topic of discussion in the GCC region. Many countries have introduced data localisation laws, mandating that certain data must be stored within national borders. This trend is shaping data centre strategies, leading to the establishment of in-country facilities to comply with regulatory requirements.
At our upcoming Touchdown Middle East 2023, conference, we’ll be launching a ‘GDCA GCC Data Sovereignty and Data Flow Report’, where we’ll go into this topic in more detail.
What’s next?
The GCC data centre market is in the midst of a transformative era, driven by technological innovations, environmental consciousness, and evolving regulatory landscapes. As businesses in the region continue to digitise their operations and consumers grow ever more tech-hungry, the data centre industry will play a pivotal role in enabling this digital revolution. By staying abreast of these key trends, organisations involved in the data centre industry can navigate the evolving landscape successfully, ensuring their infrastructure is not only efficient and secure but also future-ready.
In this dynamic environment, adaptation and innovation are the keys to thriving. As the GCC data centre market continues to evolve, embracing these trends will be the gateway to a sustainable, secure, and technologically advanced digital future.
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Want more insights on the GCC data centre market? Join us at Touchdown Middle East 2023, 21st-22nd November in the Kingdom of Bahrain for the GCC’s first region-wide data centre conference.