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Saudia Arabia and UAE driving data centre demand in the GCC

RIYADH, February 26, 2024

Saudi Arabia and the UAE are leading demand for cloud services across the seven GCC countries due to their governments' strategic efforts to build their digital economies, including the increasing uptake of IoT and AI.
This according to Turner & Townsend, a leading global professional services company in the construction industry, which has released its inaugural Middle East Data Centre Market Analysis, highlighting substantial growth in a market expected to double in size by decade end.
Furthermore, emerging Microsoft Azure Availability Zones in the UAE, Google collaborations, and planned AWS and Oracle Zones in Saudi Arabia are underpinning market growth. It means both Saudi Arabia and the UAE have emerged as key regional data centre hubs, each strategically positioned as a crucial gateway for data traffic between Europe, Asia, and Africa. 
Cost inflation
The report also shows year-on-year cost inflation across the Middle East, as the data centre industry continues to emerge off the back of rising demand for data storage. Riyadh is a new entrant to the index with an average cost of $10/W. Investors continue to watch with interest, as digital connectivity and investment continue to rise in support of Saudi Arabia’s national building programme and expanding range of giga-projects.
Data centre construction risk and mitigations also feature in the findings. To ensure effective design and construction of data centres, it is essential to incorporate several elements into project procurement strategies. 
This includes using tried and tested models, solidifying the programme delivery approach, investing time and resources into holistic contract management, choosing the right procurement route, engaging with the local supply chain, proactive design scheduling, and establishing a robust regulatory compliance and approval roadmap.
Attracting investments
Ajay Mangara Associate Director and Data Centre Lead, Middle East said: “We’re seeing the Middle East attract investment from major cloud providers, as the market sets to double in size by 2030. In particular, Saudi Arabia and the UAE are propelling growth with initiatives such as ‘KSA Vision 2030’ and ‘UAE Vision 2031', helping accelerate demand and attracting investment from major cloud providers.
“Global connectivity and content consumption will continue to drive data centre growth, requiring robust infrastructure and scalable solutions in the region. To maintain investment and meet demand, a proactive regulatory roadmap is key to addressing data centre design and planning challenges, and a shortage of skilled professionals. Data centre developers also must implement tried and tested models and engage with the supply chain to ensure the rapid move towards digitilisation, including smart city initiatives, and AI adoption is met.”--TradeArabia News Service


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