One Country In The Middle East is Increasing Their Data Centres by Richie Santosdiaz
Fintech Middle East & Africa

One Country In The Middle East is Increasing Their Data Centres

The Gulf Cooperation Council (GCC) data centre market is expected to reach revenues of over $2 billion by 2025 with a cumulative revenue opportunity for data centre power infrastructure providers of $1 billion during 2019-2025, as previously highlighted by The Fintech Times. One country looking to boost its data centres is Saudi Arabia.

Managed services such as data storage, data maintenance, and remote access to applications have seen significant growth in Saudi Arabia in recent years. This is in line with Saudi Telecoms Company’s (STC) plans to build 12 new data storage facilities by 2022 to replace their legacy systems, while the country’s private sector businesses look to take advantage of the opportunity to outsource operations to reduce in-house operational costs related to managing data.

The Gulf Cooperation Council (GCC) data centre market is expected to reach revenues of over $2 billion by 2025
The Gulf Cooperation Council (GCC) data centre market is expected to reach revenues of over $2 billion by 2025 IMAGE SOURCE PROVIDED

Meanwhile, the growing volume of big data generated each year in the country is primarily driven by the implementation of a new ICT strategy; an expanded rollout of fixed broadband, fibre and 5G; the adoption of smart city initiatives, and advances in technology, e-government, and e-commerce.

The Kingdom’s burgeoning tourism sector is also increasing demand,  a result of the iconic, multi-billion dollar giga-projects announced as part of Saudi Vision 2030 such as the entertainment city of Qiddiya, the Red Sea Project, and the NEOM smart city and tourist destination, all requiring high levels of digitalisation.

Leading international construction consultancy, Linesight, is targeting Saudi Arabia’s data centre pipeline as the country works to build an economy based on technology and knowledge as laid out in its Saudi Vision 2030. Linesight has a global reach, with staff in 22 offices worldwide, including the Middle East, Europe, Asia Pacific, and the USA. The company is currently working in more than 40 countries on project developments worth more than $31 billion globally and $7 billion in the GCC. Having recently announced several new data centre contract wins in the Middle East, growing the value of its active projects to over $500 million, Riyadh-based Linesight is now preparing for an influx of new data centre contracts in the fastest-growing cloud adoption market in the region.

Ciaran McCormack is the Regional Director for Linesight Middle East
Ciaran McCormack is the Regional Director for Linesight Middle East IMAGE SOURCE PROVIDED

Ciaran McCormack, Regional Director for Linesight Middle East, said: “An increase in demand for managed services such as cloud computing and IoT will be central to the digital transformation across Saudi Arabia’s society, government, and economy. This is expected to provide a catalyst for the growth of the country’s data centre pipeline. With our expertise in cost estimation, project management, benchmarking and strategy implementation, we plan on increasing our capacity for managing data centre projects across the Kingdom.”

The country’s consumer market for mobile and internet is also driving demand for local clouds and data storage with Saudi Arabia boasting the highest number of mobile phone users than any other country in the world (188 registered mobile phones for every 100 Saudis), one of the highest social media penetrations in the world with 25 million social media users in January 2020. Meanwhile, the number of mobile subscribers stood at 43.8 million in 2019, representing a 129% penetration of the total population while the number of internet users in Saudi Arabia is forecasted to reach 36.2 million in 2025.

McCormack adds, “With Saudi Arabia’s tourism project pipeline, Vision 2030 strategy, increasing consumer demand for mobile and Internet services, and for user data to be kept and stored in the country to increase security and ensure data ownership, we anticipate that the Kingdom will continue to push for more storage facilities through data centres. This, in turn, is spurring the demand for servers, cables, networking equipment, storage space, and physical server racks and chassis, thus driving the market for the data centre infrastructure and capacity in short to medium term. Our reputation and experience as the ‘go-to’ consultants for project and cost management of data centres in the GCC with a capital value of over $1.5 billion, puts us in a good position to capitalise and contribute to Saudi Arabia’s plans to rethink it’s data centre strategy and architecture, driving demand for local clouds.”

According to data from Arizton Advisory & Intelligence, the GCC data centre market is expected to grow at a Compound Annual Growth Rate (CAGR) of over 3% during the same period, with companies including Etisalat, Khazna, Amazon Web Services (AWS), Khazna, Gulf Data Hub, and Datamount, the prominent investors. Furthermore, according to a YouGov survey, 88% of IT decision-makers such as in neighbouring United Arab Emirates (UAE) decided to increase their cloud spend in 2019.

Speaking separate about other recent announcements, McCormack said, “Government initiatives such as Saudi Vision 2030, Dubai Vision 2021, and New Kuwait Vision 2035, are expected to be the driving forces behind DC growth in the Middle East and Africa (MEA) region. This is compounded by the growth of cloud, big data, and IoT services, as well as network upgrades to support 5G. Post COVID-19, we expect further demand for data centres as businesses in the Middle East adapt to a new working environment.”

Linesight currently has several data centre projects underway in the Middle East beyond just Saudi Arabia. Linesight is one of many in the wider data centre ecosystem helping the region build its IT infrastructure and beyond.


  • Executive Economic Development Advisor (Emerging Markets) | Contributor

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