Report Overview

Expansion of data centers, the production of massive amounts of data, and the quick uptake of cloud services could boost the growth of UAE Data Center Power Market during the forecast period between 2023 and 2029.

UAE Data Center Power Market - Industry Trends & Forecast Report, 2029

UAE data center power market size was estimated at USD 1.16 billion in 2022. During the forecast period between 2023 and 2029, the UAE data center power market size is projected to grow at a CAGR of 7.24% reaching a value of USD 1.88 billion by 2029. Major growth drivers for UAE data center power market include increasing demand for cloud storage and an increasing amount of data around the UAE. Market expansion is expected to be fueled by the rise in the introduction of cutting-edge systems to reduce power consumption as well as the emergence of modular data centers. Rise in social media usage, the deepening penetration of smartphones, and a growing need for businesses to move from server room environments to data centers.

UAE Data Center Power Market – Overview

A data center is a standalone structure built within a building that houses computing hardware like servers along with other elements like network, storage, and telecommunications systems. Every organization that generates or uses data, including government agencies, educational institutions, financial institutions, retailers of all sizes, providers of online information, and social networking services, need data centers. Due to the frequent conversion of AC to DC or vice versa, both alternating current (AC) and direct current (DC) power are used in every data center.

UAE Data Center Power Market

Growth Drivers

Growing Role of IT and Telecom Sector in Data Center Setup

The IT and telecom sector is expected to dominate the vertical market in the upcoming years. As a result of the extensive use of cutting-edge technologies like IoT, cloud computing, and AI, enormous amounts of data are being generated. This information comes from the use of mobile internet, employee files, network hardware, server logs, billing activity, and social networks. As a result, in 2021, the industry was responsible for more than half of the market's sales.

Roll Out of 5G Services across Countries and Increasing Demand for Edge Centers

Mission-critical communications benefit from the quick data transfer speeds offered by 5G network connectivity. Applications for IoT, robots, and AI, among others, can all profit from 5G Live TV's extensive broadband capabilities, which facilitate quick connections. In comparison to 4G, 5G offers a significantly higher connection density, lower latency, and more bandwidth. Edge computing, which brings IT and cloud services closer to end users and devices, is becoming more and more popular with the development and expansion of 5G. Edge data centers are smaller but can support a wider range of applications because of their proximity to end users and their capacity for processing, transferring, and storing data. Edge computing is developing more quickly than ever, so its implementation calls for prompt, thoughtful responses.

Restraints

High Initial Investments

The high initial investment needed in the data center power market is a significant barrier for businesses. It is necessary to switch from outdated to modern data center components to implement modern power systems in data centers. It needs infrastructure upgrades, the installation of new hardware and software, and labor. High initial investment is necessary for this transition process. Due to this requirement, the majority of businesses, including SMEs with limited capital, frequently cannot update their data centers. When compared to the initial investment required for the deployment of conventional power solutions, energy-efficient power solutions are significantly more expensive.

Impact of COVID-19 on UAE Data Center Power Market

The COVID-19 pandemic had a significant impact on the data center power industry, particularly organizations, due to the worldwide ban on offline activities. However, the demand for data centers is being driven by the demand for software as a service (SaaS), as well as the opportunity to work from home during the pandemic. The power of the data center was critical during the COVID-19 pandemic because the amount of data consumed by various businesses and individuals increased globally. The pandemic increased the number of reliable and easily accessible data centers worldwide.

UAE Data Center Power Market

Segmental Coverage

UAE Data Center Power Market - By Component

Based on component, the UAE data center power market is segmented into Solution (Power distribution, Power monitoring, Power backup, Cabling infrastructure), Services, Design and consulting, Integration and deployment, Support and maintenance. Solution segment comprising power backup segment dominates the market share. The most crucial element for data centers is power backup because, without it, they cannot operate. It lessens unplanned outages and provides power to the data centers via battery- and UPS-stored energy. By providing power to essential equipment, also enables data centers to support critical loads during periods of power outages and to streamline their operations. As a result, backup systems in data centers can significantly reduce costs, improve dependability, and promote business continuity. Also, power backup aids in bridging the gap between a generator starting up and a mains failure.

UAE Data Center Power Market - By Size

Based on the size, the UAE data center power market is segmented into Small & Medium-sized Data Center and Large Data Center. During the forecast period, the large data center segment is expected to hold a higher market share. High-density server racks are the main feature of large data centers, which are above 25,000 square feet in size. They provide better ceiling service installation and efficient production floor operation. They employ machines called Precision Air Handling Units (PAHU) and High Energy Efficient Computer Room Air Handlers (CRAH). They also come with improved PDUs that monitor losses and maximize efficiency. Compared to mid-sized and enterprise data centers, these data centers use more power.

UAE Data Center Power Market - By Verticals

Based on verticals, the UAE data center power market is segmented into BFSI, IT and Telecommunication, Media and Entertainment, Healthcare, Government and Defense, Retail Manufacturing, and Others (Energy, Research & Academia and Transport & Logistics). In the UAE data center power market, the IT & telecommunications sub-segment is expected to grow at an exponential rate in the coming years. This growth can be attributed to emerging IT and telecom service providers' deployment of massive data center infrastructure to manage the vastly increasing amount of data. Supportive policy implementations by the government, as well as the strong presence of key players such as CtrlS Datacenters and Schneider Electric in emerging markets, are expected to have a positive impact on the segment during the forecast period.

UAE Data Center Power Market - By End User

Based on end user, the UAE data center power market is segmented into Enterprises, Colocation Providers, Cloud Providers, and Hyperscale Data Centers. Cloud providers are expected to grow at a significant rate in the market during the forecast period due to factors an increase in cloud solutions among industries concerning data storage, compression of the mode of physical infrastructure for traditional data security, increase in computing assistance, and high scalability.

UAE Data Center Power Market

Competitive Landscape

Major players operating in UAE data center power market include Schneider Electric, Verde, ABB, Eaton, Delta Electronics, Huawei, Legrand, Tripp Lite, Toshiba, and Siemens. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In March 2020, Schneider Electrics launched its first UPS category Smart-UPS lithium-ion. It is designed for local edge environments and micro data centers. The second category is APC Easy UPS 1 Ph online, which is a versatile, high-quality, and cost-effective UPS developed to handle high voltage and inconsistent power conditions. 

Scope of the Report

By Component

• Solution

1. Power distribution

2. Power monitoring

3. Power backup

4. Cabling infrastructure

• Services

1. Design and consulting

2. Integration and deployment

3. Support and maintenance

By Size

• Small and Medium-sized Data Center

• Large Data Center

By Verticals

• BFSI

• IT & Telecommunications

• Media & Entertainment

• Healthcare

• Government & Defense

• Retail Manufacturing

• Others (Energy, Research & Academia, and Transport & Logistics)

By End User

• Enterprises

• Colocation Providers

• Cloud Providers

• Hyperscale Data Centers