Saudi Arabia Data Center Market SIZE & SHARE ANALYSIS - GROWTH TRENDS & FORECASTS UP TO 2030

Saudi Arabia Data Center Market Analysis

The Saudi Arabia Data Center Market size is estimated at 0.44 thousand MW in 2025, and is expected to reach 1.19 thousand MW by 2030, growing at a CAGR of 21.87%. Further, the market is expected to generate colocation revenue of USD 418.5 Million in 2025 and is projected to reach USD 1,429 Million by 2030, growing at a CAGR of 27.84% during the forecast period (2025-2030).

Saudi Arabia's data center market is experiencing transformative growth driven by the kingdom's ambitious digital transformation initiatives under Vision 2030. The government's commitment to establishing a robust data center infrastructure is evident through its recent announcement of an USD 18 billion investment plan for developing hyperscale data centers across the country. This strategic initiative aims to position Saudi Arabia as a regional computing powerhouse and digital hub, with plans to surpass 1,300 MW data center capacity before 2030. The integration of advanced technologies is particularly notable in the healthcare sector, where approximately 70% of services have adopted telemedicine solutions, and 34% of young doctors are leveraging artificial intelligence to enhance diagnostic processes.

The market is witnessing significant developments in cloud infrastructure and partnerships. A notable example is Oracle's collaboration with NEOM Tech & Digital Holding Co., establishing itself as the inaugural tenant in NEOM's hyperscale data center project. This partnership aligns with Saudi Vision 2030's objectives and demonstrates the kingdom's ability to attract major global technology players. The government has implemented favorable policies, including reduced electricity rates for cloud computing providers at 4.8 cents per kilowatt-hour, specifically designed to stimulate investment in data center and cloud computing services.

The manufacturing sector's digital transformation is creating substantial demand for data center services, with the industry expected to reach a value of USD 850 billion in 2023. This digitalization wave is part of the broader Industry 4.0 program, which aims to leverage advanced technologies for enhancing manufacturing performance and productivity. The sector's significant contribution of 13% to the GDP underscores its importance in driving data center demand and digital infrastructure development.

The increasing digital engagement of Saudi Arabia's population is creating unprecedented demand for data center services. With 19 million social media users representing 59% of the population, the kingdom demonstrates strong digital adoption. The Communications and Information Technology Commission (CITC) has taken progressive steps by making Saudi Arabia the first nation in Europe, Africa, and the Middle East to open the entire 6 GHz frequency range for WiFi use, increasing available airwaves for next-generation WiFi networks by 150%. This development has positioned Saudi Arabia as a global leader, with 2,035 MHz of spectrum available for next-generation WiFi and license-exempt technologies, surpassing all other nations worldwide.

Saudi Arabia Data Center Market Trends

Expansion of 5G coverage, increasing online purchases and increasing digital applications from the end-users drives the market growth

• The data traffic per smartphone is expected to witness a steep growth from 5.5 GB in 2023 to 18.7 GB in 2029, exhibiting a CAGR of 21.8%.
• There has been an increase in mobile data traffic since 2022, made possible by the expansion of 5G coverage. 5G services in Saudi Arabia expanded in Q4 2020, reaching seven additional cities and provinces. By 2021, 51 of Saudi Arabia's different provinces and cities had 5G connections. About 23% of the overall volume is made up of 5G hardware, including handsets. The acceleration of significant IoT deployments is expected to be swift in the coming years, including use cases like wearables for e-health, inventory trackers for logistics, monitoring of pollution, smart meters, and surveillance and tracking tools for smart manufacturing. About 12.9 million people made online purchases in 2018, up from 11.6 million in 2017. By 2022, online shoppers were expected to grow significantly and reach 19.3 million. The volume of mobile data traffic in the country is increasing as more people use the internet.
• The average amount of data used increased by 33% by 2020. In Saudi Arabia, YouTube used the most bandwidth, making up an estimated 22.5% of all daily data usage, followed by the PlayStation Network (7.8%), Snapchat (7.6%), and Netflix (8.1%).

With the expansion of digital initiatives and e-commerce activities, and improvements in 5G connections, smartphone sales are anticipated to rise in Saudi Arabia

• In 2022, smartphone penetration increased to more than 92%. In the coming years, the number of smartphone users in the Kingdom may continue to grow steadily, with an anticipated 97.1% smartphone penetration in 2025 and 36.17 million customers. Saudi Arabia is the GCC's next frontier for businesses trying to reach a new and mobile-centric consumer base.
• The country's total number of smartphone users is expected to reach 33.6 million in 2023, witness a CAGR of 1.8% during the forecast period, and reach 37 million by 2029.
• Smartphone usage has surged in the Kingdom. In 2022, the smartphone segment generated USD 2.40 billion in revenue. In 2023, the smartphone segment is anticipated to rise in volume by 1.9%. In 2022, there were 58.1 5G phones. With rising wages and employment opportunities, expansion of digital initiatives and e-commerce activities, and improvements in 5G connections, smartphone sales are anticipated to rise in Saudi Arabia, thus boosting the Kingdom's user base. Saudi Arabia's GDP expanded by 8.8% in 2022 compared to the same period the previous year. About 93% of Saudi Arabian smartphone users browse advertisements on their phones, while 91% watch videos on their devices. A huge amount of data is released daily in the Kingdom, which may boost the Saudi Arabian data center market during the forecast period. The rising purchasing power may boost smartphone sales further, thus increasing the number of smartphone users.

OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT

Segment Analysis: Data Center Size

Massive Segment in Saudi Arabia Data Center Market

The massive data center size segment dominates the Saudi Arabian market, accounting for approximately 66% of the total IT load capacity in 2024. With a current IT load capacity of around 229 MW, massive data centers are primarily concentrated in Riyadh, which hosts over 80% of these facilities, while the remaining 20% are distributed across other regions of Saudi Arabia. The segment's prominence is largely driven by the Saudi government's substantial investments in digital infrastructure development and the increasing demand for large-scale computing facilities. Etihad Etisalat Company (Mobily) leads this segment with seven massive data centers, demonstrating the strong presence of established players in the market. The segment's growth is further supported by government initiatives offering incentives and benefits related to tax, electricity, and land costs, making it an attractive proposition for data center operators.

Large Segment in Saudi Arabia Data Center Market

The large data center size segment is experiencing the most rapid growth in the Saudi Arabian market, with projections indicating a robust expansion rate of approximately 23% from 2024 to 2029. This remarkable growth trajectory is driven by several factors, including the ongoing construction of new large data center facilities in both Riyadh and other regions of Saudi Arabia. The segment's expansion is particularly notable in Riyadh, which accounts for about 70% of large data center facilities, while the remaining 30% are distributed across other regions. Saudi Telecom Company (STC) and NEOM Tech & Digital Co. are spearheading this growth with significant investments in new facilities. The segment's rapid expansion is further supported by increasing demand from global companies establishing their presence in the Kingdom and the growing need for sophisticated data processing capabilities across various industries.

Remaining Segments in Data Center Size Market

The small data center size segment continues to maintain a presence in the Saudi Arabian market, primarily serving specific niche requirements and specialized applications. These facilities are predominantly owned and operated by companies like NourNet, Detecon Al Saudia DETASAD Co. Ltd, SAHARA NET, and other regional players. While the medium and mega data center segments currently show limited activity in the market, they represent potential areas for future development as the Kingdom's digital infrastructure continues to evolve. The diversification of data center sizes ensures that the market can accommodate various business needs, from small-scale operations to enterprise-level requirements, though the focus remains predominantly on massive and large facilities.

Segment Analysis: Tier Type

Tier 3 Segment in Saudi Arabia Data Center Market

The Tier 3 segment dominates the Saudi Arabia data center market, accounting for approximately 61% of the total IT load capacity in 2024. This significant market share is driven by the majority of facilities achieving Tier 3 certification, which offers an optimal balance between reliability and cost-effectiveness. The segment's prominence is particularly notable in Riyadh, which hosts about 70% of all Tier 3 data centers, while the rest of Saudi Arabia accounts for the remaining 30%. Major market players including Etihad Etisalat Company, Saudi Telecom Company (STC), NourNet, Detecon Al Saudia DETASAD Co. Ltd, and NEOM Tech & Digital Co. have concentrated their investments in Tier 3 facilities, recognizing the growing demand for reliable and affordable data center solutions in the Kingdom.

Tier 4 Segment in Saudi Arabia Data Center Market

The Tier 4 segment is emerging as the most dynamic sector in the Saudi Arabian data center market, projected to grow at approximately 18% CAGR from 2024 to 2029. This robust growth is primarily driven by the increasing demand for mission-critical applications and the establishment of a digital economy in the country. The segment's expansion is further supported by the incorporation of major multinational corporations and the growing requirement for high-availability infrastructure to support 5G applications. Currently, there are three Tier 4 certified facilities in the country, operated by Etihad Etisalat Company (Mobily), NourNet, and Electronia, with Electronia's facility contributing significantly to the segment's capacity.

Remaining Segments in Tier Type

The Tier 1 and 2 segment represents the basic level of data center infrastructure in Saudi Arabia, primarily concentrated in Riyadh with five facilities. These lower-tier data centers continue to serve specific market needs where high availability and redundancy are not critical requirements. However, the segment is experiencing minimal growth as organizations increasingly prefer higher-tier facilities for their enhanced reliability and performance capabilities. This shift in preference reflects the broader market trend toward more sophisticated and resilient data center infrastructure solutions in line with Saudi Arabia's digital transformation goals.

Segment Analysis: Absorption

Utilized Segment in Saudi Arabia Data Center Market

The utilized segment dominates the Saudi Arabian data center market, accounting for approximately 74% of the total IT load capacity in 2024. This significant market share is driven by the increasing adoption of cloud services, digital transformation initiatives, and the expansion of 5G network connectivity across the Kingdom. The segment's growth is further supported by the rising demand from various sectors including BFSI, cloud service providers, and telecom operators. The Kingdom's position as one of the top 15 countries with the fastest average and peak download speeds globally has contributed to higher utilization rates. Additionally, the government's commitment to Vision 2030 and various digital transformation programs has created a robust ecosystem for data center utilization, particularly in key cities like Riyadh and Jeddah.

Non-Utilized Segment in Saudi Arabia Data Center Market

The non-utilized segment is projected to experience the fastest growth in the Saudi Arabian data center market, with an expected CAGR of approximately 16% from 2024 to 2029. This rapid growth is primarily attributed to the massive expansion plans for new data center facilities across the Kingdom, including the government's initiative to invest around USD 18 billion in hyperscale data centers. The segment's growth is further supported by the increasing number of international technology companies entering the Saudi market and establishing their presence. The development of smart cities, coupled with the government's push to make Saudi Arabia a regional digital hub, is creating substantial opportunities for new data center capacity. Additionally, the implementation of cloud-first policies and the growing demand for edge computing solutions are expected to drive the expansion of non-utilized capacity in the coming years.

Free With This Report

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.