KSA Data Center industry witnessing robust growth in the era of virtualization and Cloud Computing

1. KSA Data Center Market is being driven by rising investments in data centers from private sector and government support towards technology.

Saudi Arabia enjoys a strategic location between Africa and APAC that can easily connect both the regions, which is benefiting the operators to invest in a submarine cable network passing through the country. The growing adoption of smart devices and increasing demand for analytics, cloud adoption, and the growth of wireless networking technologies have led several organizations in Saudi Arabia to invest in big data and IOT technology.

2. Additionally, increasing awareness of cloud services along with adoption of Cloud first policy is fueling KSA Cloud Services Market.

Saudi’s Cloud Services market has seen a tremendous growth due to surge in online activities majorly in all workplace systems along with investments and new market entrants. The COVID-19 outbreak has considerably boosted growth of the cloud services market, owing to the accelerating demand for the cloud to support several crucial applications for efficient business operations. Additionally, new regulations such as requirement of major cloud providers like Microsoft, AWS to have their own software and data center in KSA are fueling growth. However, there is only one electricity provider in KSA while some players like Nournet have their own generators which is a restraint for market growth.

3. Demand for Data Centers has been underpinned by technological advances and this trend is likely to intensify and drive demand in the coming years. 

• The government of the KSA is focusing on e-government concept. KSA has increased its efforts to adopt cloud-computing technology and was one of the earliest countries in the region to adopt specific regulations for cloud service provider.

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• The increase in demand for online retail or e-commerce has acted as a catalyst for the data center industry. Customers want more personalized data and for this data center, services are very helpful. They help in storing and analyzing the data.
• Higher online media consumption and installation of IOT devices and sensors in manufacturing plants along with Govt. programs such as cloud first and investments in data center as well as the burgeoning demand from SMBs for cloud solutions are increasing demand for data storage.

4. Unclear Regulatory Framework, Environmental Conditions, Cyber-attacks and Power Cost are few of the challenges and bottlenecks faced in KSA Data Center Market.

• There are no standalone regulations for KSA Data Center Market, however there are multiple unclear regulations making it tough for foreign IT service providers to tap the KSA DC market.

• Setting high operating temperatures causes a negative ripple effect on the condensers or outdoor chiller units which become an overkill on the efficiency as these cooling units and associated outdoor units are oversized to compensate.

• The rising adoption of cloud services and IOT devices has increased the threat of cyberattacks. KSA ranks number two in the world in terms of data breach costs.

• KSA Data Center power consumption and cost index is considerably higher other middle east countries. The average electricity pricing in Saudi Arabia is $0.069 per kWh for industries, which is comparatively higher than other countries.