United Arab Emirates Data Center Market SIZE & SHARE ANALYSIS - GROWTH TRENDS & FORECASTS UP TO 2030

United Arab Emirates Data Center Market Analysis

The United Arab Emirates Data Center Market size is estimated at 495.7 MW in 2025, and is expected to reach 917.7 MW by 2030, growing at a CAGR of 13.11%. Further, the market is expected to generate colocation revenue of USD 553.2 Million in 2025 and is projected to reach USD 1,327.4 Million by 2030, growing at a CAGR of 19.13% during the forecast period (2025-2030).

The UAE data center market is experiencing robust growth driven by the government's aggressive digital transformation initiatives and commitment to technological advancement. The market landscape is characterized by significant investments in data center infrastructure development and the adoption of cutting-edge technologies. The Department of Economy and Tourism (DET) at Dubai's Establishment for Small and Medium Enterprises Development has launched Concept+, a new business incubator focusing on digital technology innovation. This initiative aligns with the broader national strategy to position the UAE as a global technology hub and supports the country's vision for a knowledge-based economy.

The market is witnessing a notable shift toward sustainable and energy-efficient data center solutions. A prime example is Moro Hub's development of the world's largest green data center in Dubai, which represents a significant step toward environmental sustainability in the industry. The facility, located in the Mohammed bin Rashid Al Maktoum Solar Park, boasts a capacity exceeding 100 MW. This development showcases the UAE's commitment to combining technological advancement with environmental responsibility, setting new benchmarks for sustainable data center operations in the region.

Infrastructure quality and reliability remain key focus areas, with Tier 3 facilities dominating the market landscape. As of 2022, the UAE hosted 29 Tier 3 certified data centers, demonstrating the industry's commitment to maintaining high standards of reliability and performance. The market has also seen strategic consolidation and expansion activities, exemplified by Khazna Data Center's development of new facilities DXB2 and DXB3 in Dubai, which are set to become part of the largest network of hyperscale data centers in UAE and the Middle East and North Africa region.

The social media and digital consumption landscape in the UAE continues to shape data center requirements, with 98.99% of the total UAE population actively using social media platforms as of 2022. This high digital engagement is driving demand for enhanced data processing and storage capabilities. Major industry players are forming strategic partnerships to accelerate digital transformation, as evidenced by the collaboration between G42 Cloud and SAP to assist businesses in accelerating their cloud technology adoption. These partnerships are crucial in developing comprehensive solutions that address the evolving needs of enterprises and support the UAE's position as a regional digital hub.

United Arab Emirates Data Center Market Trends

Growing number of mobile users and expanding 5G private wireless networks, digitalization of the firms across the nation boosts the market growth

• The data traffic per smartphone is expected to witness a steep growth from 3.5 GB in 2021 to 11.2 GB in 2029, exhibiting a CAGR of 15%.
• More than 60% of all web traffic in the United Arab Emirates in 2021 was generated from mobile phones. The country's average mobile data internet speed in 2021 was about 86.8 Mbps. In the same year, 93% of the country's population were active mobile internet users. For many years, more than 50% of all web traffic in the United Arab Emirates had come from mobile devices. In 2022, mobile devices accounted for 58.51% of website traffic in the United Arab Emirates.
• In March 2022, Nokia and Etisalat UAE deployed 5G private wireless networks to enable company digital transformation and take advantage of use cases for smart cities and artificial intelligence in the Industry 4.0 era.

Smartphhone users are growing with the expansion of end-user industry applications and growth in IoT, cloud, data centers, and 5G

• The total number of smartphone users in the United Arab Emirates was 4.70 million in 2021. The number is expected to reach 11.60 million by 2029 at a CAGR of 14%.
• The increase in smartphone users may be connected to the proliferation of digital media. In the United Arab Emirates, 78% of people own at least one cellphone, and many held multiple cellphones in 2021. Compared to other nationalities, the UAE population has a smartphone penetration rate of 85%.
• The UAE telecom industry is growing with the expansion of end-user industry applications and growth in IoT, cloud, data centers, and 5G. The country is also witnessing increasing internet consumption with growth in the market. Several market companies are launching innovative internet plans to meet the rising demand for internet services and capture a vast share of customers.
• As per the Telecommunications Regulatory Authority (UAE), the United Arab Emirates had over 18.7 million active mobile phone subscribers as of March 2022.

OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT

Segment Analysis: By Data Center Size

Large Segment in UAE Data Center Market

The large-sized data center size segment dominates the UAE data center market, commanding approximately 45% market share in 2024. This significant market position is driven by the increasing adoption of Tier 3 standards in most colocation data center facilities across the UAE. These facilities are designed to allow IT components to be replaced or removed without interrupting routine data center operations. The segment's prominence is further strengthened by operators' plans to develop approximately 370 MW of IT load capacity, with most of this expansion focused on large-scale facilities to meet the growing demand for robust data center infrastructure in the region.

Mega Segment in UAE Data Center Market

The mega data center size segment is emerging as the fastest-growing segment in the UAE data center market, with projections indicating robust growth of approximately 40% between 2024 and 2029. This exceptional growth trajectory is being fueled by significant investments from international technology companies, including Amazon, Microsoft, and Oracle, which are establishing substantial data center facility presence in the UAE. The segment's expansion is particularly notable in supporting the UAE's technological advancement initiatives, with several mega data center projects under development to accommodate consistently high levels of traffic and processing demands from various sectors, including cloud services, artificial intelligence, and digital transformation initiatives.

Remaining Segments in Data Center Size Market

The market's diversity is further enhanced by massive, medium, and small data center size segments, each serving distinct market needs. The massive data centers are particularly significant in supporting the government's digital transformation initiatives and growing cloud computing demands. Medium-sized facilities play a crucial role in serving enterprise-level requirements and regional business needs, while small data centers continue to serve specific niche markets and edge computing requirements. These segments collectively contribute to creating a comprehensive data center ecosystem that caters to varying scales of operations and diverse industry requirements across the UAE.

Segment Analysis: By Tier Type

Tier 3 Segment in UAE Data Center Market

Tier 3 data centers dominate the UAE data center market, commanding approximately 84% market share in 2024. Dubai hosts the maximum number of Tier 3 data centers in the country, with a market share of nearly 48%, followed by Abu Dhabi at around 35%. The segment's prominence is driven by the optimal balance between reliability and cost-effectiveness that Tier 3 facilities offer. Major players like Khazna Data Center, Etisalat, and Equinix have significantly invested in Tier 3 certified facilities, with Khazna Data Center alone operating 14 data centers with Tier 3 certification. Currently, there are 25 data center facilities under construction being built with Tier 3 standards, with construction projected to be more concentrated in Abu Dhabi, followed by Dubai.

Tier 4 Segment in UAE Data Center Market

The Tier 4 segment is experiencing remarkable growth in the UAE data center market, with projections indicating an impressive growth rate of approximately 38% from 2024 to 2029. This robust growth is primarily driven by increasing demand for fault-tolerant facilities that can handle consistently high levels of traffic and processing demands. Currently, Injazat leads the Tier 4 certified facilities in the country through its two data center facilities in Abu Dhabi. The segment is poised for significant expansion during the forecast period, with major operators expected to contribute an additional IT load capacity of around 240 MW, demonstrating the increasing preference for high-reliability data center infrastructure in the region.

Remaining Segments in Tier Type

The Tier 1 and Tier 2 segments represent the basic level of data center infrastructure in the UAE market. These segments are primarily concentrated in Dubai, with two facilities operational in the region. However, these lower-tier facilities are experiencing minimal to no growth as businesses increasingly prefer higher-tier facilities for their enhanced reliability and performance capabilities. The limited growth in these segments reflects the market's maturation and the shift towards more sophisticated data center infrastructure, with new investments predominantly focused on higher-tier facilities.

Segment Analysis: By Absorption

Utilized Segment in UAE Data Center Market

The utilized segment dominates the UAE data center market, accounting for approximately 86% of the total IT load capacity in 2024. This significant market share is driven by the increasing adoption of cloud services, digital banking initiatives, and the rapid expansion of e-commerce platforms across the UAE. The segment's growth is further supported by the government's digital transformation initiatives and the establishment of new data center facility by major operators. The rising demand from telecom providers, cloud operators, the banking sector, and public sector agencies has contributed to the high utilization rates. Additionally, the deployment of 5G networks and IoT applications has created substantial demand for data center services, while the increasing focus on data localization requirements has further strengthened the utilized segment's position in the market.

Growth Dynamics of Non-Utilized Segment in UAE Data Center Market

The non-utilized segment represents a strategic reserve capacity in the UAE data center market, designed to accommodate future growth and expansion needs. This segment plays a crucial role in ensuring that data center operators can quickly respond to sudden increases in demand without compromising service quality. The non-utilized capacity serves as a buffer for new market entrants and supports the expansion plans of existing operators. Data center providers maintain this spare capacity to accommodate the anticipated growth in cloud computing, artificial intelligence, and other emerging technologies. The segment also reflects the industry's forward-looking approach to capacity planning, particularly in supporting the UAE's vision of becoming a leading digital economy. This strategic approach to capacity management helps maintain market stability and ensures sustainable growth in the data center sector.

United Arab Emirates Data Center Market Geography Segment Analysis

Data Center Market in Dubai

Dubai stands as the powerhouse of the UAE's data centers in UAE market, commanding approximately 50% of the country's total IT load capacity in 2024. The emirate's dominance is driven by its position as a growing knowledge-based economy hub, attracting young millennials through numerous reforms, including the Golden Visa program and robust digital infrastructure development. The Department of Economy and Tourism's launch of Concept+, a business incubator focused on digital technology, further strengthens Dubai's position in the data center Dubai landscape. The region is experiencing remarkable growth, projected to expand at nearly 19% annually from 2024 to 2029, supported by the rapid adoption of digital banking, cloud services, and e-commerce platforms. Dubai's strategic location and business-friendly environment continue to attract major international technology companies and data center companies in Dubai, fostering a dynamic ecosystem for digital transformation.

Data Center Market in Abu Dhabi

Abu Dhabi has emerged as a crucial hub for Abu Dhabi data center operations, leveraging its robust infrastructure and strategic position as the UAE's capital. The emirate's Abu Dhabi data center landscape benefits significantly from its substantial economic foundation, with Abu Dhabi contributing about two-thirds of the UAE's $400 billion economy. The government's commitment to digital transformation is evident through its showcase of more than 100 digital initiatives and projects under the theme of "Leading the Digital Future." Key players such as Equinix and Khazna are actively expanding their footprint across the emirate, with Khazna Abu Dhabi planning to launch multiple facilities during the forecast period. The region's focus on sustainable development and smart city initiatives, coupled with its strong financial sector, continues to drive demand for data center services.

Data Center Market in Rest of UAE

The Rest of UAE, comprising regions such as Al Ain, Fujairah, and Kalba, represents an emerging frontier in the country's data center landscape. These regions are witnessing increased attention from data center companies in UAE looking to expand their geographical presence and enhance network connectivity. The establishment of new facilities, such as the SmartHub Kalba facility by e&'s Carrier and Wholesale Services division, demonstrates the growing importance of these regions in serving as crucial landing points for submarine cables and telecom infrastructure. The rapid digitalization of banking services, exemplified by the National Bank of Fujairah's transformation initiatives, is driving demand for data center hosting in UAE in these regions. Additionally, these areas offer advantages in terms of land availability and potential for future expansion, making them attractive locations for new data center developments.

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We provide a complimentary and exhaustive set of data points on the country and regional level metrics that present the fundamental structure of the industry. Presented in the form of 50+ free charts, the sections cover difficult to find data on various countries on smartphone users, data traffic per smartphone, mobile and broadband data speed, fiber connectivity network, and submarine cables.