Market Trends of Saudi Arabia Data Center Cooling Industry
The IT and Telecom Segment is Expected to Have Significant Market Share
- Since the Kingdom of Saudi Arabia (KSA) launched its Cloud First Policy in 2019 to accelerate cloud adoption across its public and private sectors, the country has seen a 16% growth rate in cloud services, as stated by the International Trade Association. With its ICT readiness and use of cloud computing, the Great Kingdom of Saudi Arabia is a pioneer in the MENA region. The KSA leaders have made it possible to offer more diverse services while at the same time assuring enhanced data privacy protection because they recognize that cloud computing adoption is the key to economic progress. Methodologies that match IT resources with business and application needs are prioritized to improve cloud performance and hasten the achievement of ideal business objectives.
- Official data revealed that cloud computing registrations in Saudi Arabia surged by 40% Y-o-Y in Q4 2023. Between October and December 2023, the government issued 1,759 cloud computing permits. This uptick highlights the Kingdom's ambition to establish the region as a technological hub by 2030.
- Also, this move aligns with the Saudi government's proactive stance on adopting digital technologies, fostering economic diversification, and enhancing innovation. According to the ministry report, Riyadh led the way with 1,062 registrations, trailed by Makkah with 346 and the Eastern Province with 216. Madinah issued 46 permits, while Asir granted 24.
- In terms of telecom growth, the telecom industry is expected to continue to dominate due to users' increasing adoption of 5G networks. By 2029, 5G mobile data speed is expected to increase significantly to 921 Mbps. This supports the idea that data center servers are increasing in demand. The country's adoption of 4G is also fueling growth in the country's data center market. Rapid expansion and installation of IT infrastructure are projected to boost the market's growth during the forecast period.
- As part of Vision 2030, Saudi Arabia is planning to modernize and automate its economy, and the rise of 5G mobile services in the nation is essential to this effort. Creative and disruptive applications are made possible by 5G's disruptive capabilities. Saudi Arabia will be the first among the nations in Europe, Africa, and the Middle East to make the entire 6 GHz frequency range open for WiFi use, according to the CITC. This indicates that the free airwaves available to routers for the next generation of WiFi networks have increased by 150%. Saudi Arabia has now made 2,035 MHz of spectrum available for the next generation of WiFi and other license-exempt technologies, more than any other nation in the world, by assigning 1,200 MHz of the radio spectrum for WiFi6e. Such instances in the market are expected to create more need for data centers, boosting the demand for data center cooling infrastructure manufacturers in the coming years.
Understand The Key Trends Shaping This Market
Download PDF
Liquid Cooling to Record Significant Share
- In data centers, liquid cooling offers many benefits and is an attractive option for high-performance cooling computing environments. The use of liquid cooling is more energy efficient compared to conventional air conditioning. It reduces the need for overcooling and improves the energy efficiency of data centers by providing precise temperature control.
- Liquid cooling uses space constraints and superior heat transfer properties of water or other liquids to provide efficient and cost-effective cooling of high-density racks up to 3,000 times more efficiently than air. Long proven in mainframe and gaming applications, liquid cooling is increasingly used to protect rack servers in regional data centers. Vertiv has introduced the Liebert XDU, a water-efficient liquid cooling solution designed for high-density data centers. This new generation of thermal management systems supports liquid-cooled servers and enables precise control of liquid quality, flow, and pressure.
- With destructive investments by the Saudi Arabian government in cloud computing and the country’s competitive business laws and robust technological infrastructure, the ICT industry is projected to continue expanding in the coming years. The deployment of 5G services and the development of smart cities are anticipated to increase data traffic and grow the demand for more data centers in the country.
- In addition, the Saudi Ministry of Communications and Information Technology (MCIT) has unveiled an ambitious USD 18 billion initiative to establish a network of large-scale data centers across the Kingdom. The government aims to position Saudi Arabia as the primary data center hub in the region, collaborating closely with local and international investors. This move is timely, given the nation's expanding international ties, which are set to bolster the data center industry. For instance, Tencent Holding, a Chinese internet services giant, plans to expand its cloud services in Saudi Arabia and the United Arab Emirates, focusing initially on providing cloud storage solutions to local gaming firms and later investing in AI computing capabilities, including an Arabic language model.
- Also, the growing workloads and increasing demand for high-performance computing (HPC) applications generate significant heat in data centers. The high ambient temperatures in the region can create efficiency challenges, leading to increased demand for liquid cooling solutions in the country.
- Major data center cooling solution market players are increasing their innovation and presence in Saudi Arabia. For instance, in March 2024, Accelsius and Equus Compute Solutions (ECS) joined forces, aiming to cater to the rising demand for cutting-edge liquid cooling solutions in data centers. This collaboration sees Accelsius's top-tier direct-to-chip liquid cooling technology complemented by ECS's suite of services, spanning server and rack integration, deployment, commissioning, and comprehensive technical and customer support. The focus on collaboration and innovation is poised to significantly boost market demand within Saudi Arabia's data center landscape.
