One emerging region in the Global Data Centers Market is the Middle East and Africa (MEA), as more and more storage facilities are built to cater to the booming BFSI, IT and communications industries.
In fact, the Data Center Market in the MEA Region is growing at a 10.55 percent CAGR from 2013-2018, due to factors like increased consolidation, the emergence of the region as a new outsourcing destination and higher demand for green data center services.
However, there are still some significant challenges standing in the way of more aggressive growth of the data center market in this region.
TechNavio analysts have pinpointed some key drivers and challenges in this growing market.
Consolidation of Computing Facilities
The amount of digital content is going up, so enterprises are building bigger and better computing and storage facilities. Instead of trying to manage multiple facilities across different locations, these organizations are instead consolidating facilities into a single centralized location.
As a result of consolidation, enterprises are able to manage the network’s performance efficiently and network administrators are able to share the available computing resources among the various processes.
Slow Adoption of Technology in GCC Countries
Virtualization and cloud computing are being adopted on a large scale by enterprises across the US and Europe. However, a slow adoption pattern is being witnessed across the Gulf Cooperation Council (GCC) countries as these regions are reluctant to invest and upgrade their infrastructure and network production equipment. This slow adoption is having a considerable effect on revenue in the data centers market.
New IT Outsourcing Destinations
One of the major factors contributing to the rapid growth of the Data Center Market in the MEA region is the emergence of some nations as preferred locations for outsourcing of computing and IT requirements. In the past, countries like Turkey, South Africa, and Saudi Arabia outsourced their computing and IT requirements to data center facilities abroad.
However, these counties are now witnessing an increase in the number of data center facilities being established, thereby reducing the need for outsourcing and growing the data center market as whole.
Lack of Data Center Management Expertise
Quality data center management is important for enterprises, and increased network complexity is creating demand for professional who can manage the performance of these centers efficiently. This is leading to a considerable rise in the operational costs associated with a data center, and posing a challenge to the widespread adoption of these storage solutions in the MEA region.
Adoption of Green Data Center Services
Green computing and the need for energy-efficient computing facilities are increasing among enterprises and end-users worldwide. With many restrictions being imposed from regulatory authorities on the standards of data center facilities, there has been a considerable change in the type of services being procured by enterprises and end-users.
Enterprises are bound to adopt those data center solutions that consume less power and deliver high-performance computing. Further, services such as economizer technology are reducing the operational costs of data center facilities even more, and making them an accessible storage solution for SMEs and large enterprises alike.
Need for Precision Cooling Solutions
As the complexity of network infrastructure and computing equipment increases, so too does the need for sophisticated systems to keep everything in tip-top working order. High performance cooling systems, for example, are essential for efficient functioning of data centers, especially in areas with extreme temperatures, such as in the MEA region. However, these advanced systems can also drive up the initial cost of establishing data centers.
Increased Adoption of Virtualized Computing Infrastructure
Virtualization and adoption of virtualized computing infrastructure are increasing among enterprises and end-users across the MEA region. Many countries in the region are establishing modern and speedy communication technologies as part of data center infrastructure, and virtualization enables better productivity of the network infrastructure by scheduling higher workloads on the physical hardware.
The Gulf countries are expected to display an impressive adoption pattern for data centers, due to many large enterprises setting up their data center facilities in the region because of low labor costs.
High Capital Investment
One of the biggest challenges that enterprises and data center service providers face is the need for high capital investment to establish centers in the first place. With an increase in the digital content being transmitted across enterprise networks and the emergence of cloud computing solutions in GCC countries, high-performance computing equipment must be incorporated as part of a data center.
Additionally, newly designed data centers integrate high-performance computing and storage equipment, increasing the capital investments in the establishment of data centers. Some enterprises are finding it difficult to make such huge investments and are instead outsourcing their service requirements to third-party vendors who are experts in data center service provisioning.
