Saudi Arabia Data Center Colocation Market: Current Analysis and Forecast (2025-2033)

Saudi Arabia Data Center Colocation Market Size & Forecast

The Saudi Arabia Data Center Colocation Market was valued at USD 496.57 million in 2024 and is expected to grow at a strong CAGR of around 11.95% during the forecast period (2025-2033F), driven by growing cloud adoption and hybrid IT strategies across industries.

Saudi Arabia Data Center Colocation Market Analysis

Data colocation is the deployment of enterprise IT equipment in a professionally operated environment that has robust infrastructure. The facilities offer 24/7 availability, high bandwidth, and disaster recovery, ensuring that organizations achieve high reliability and compliance levels, as opposed to in-house setups.

The adoption of data center colocation is encouraged by the necessity to facilitate digital transformation, migration to the cloud, and alignment with the heavy data localization demands in Saudi Arabia. Additionally, companies are designing new facilities that hold Tier III and Tier IV certifications, featuring enhanced cooling systems, power redundancy, and high-speed connectivity to achieve enterprise-level performance. Simultaneously, investments in AI-ready infrastructure and regional growth are occurring in the market, making colocation a vital supporting infrastructure for the developing digital economy in the Kingdom.

For example, on July 9, 2025, XDS DATACENTRES signed a major agreement with ICS Arabia to deliver an initial state-of-the-art 10-megawatt immersion-cooled data centre in Riyadh & Jeddah. Under the terms of the agreement, ICS Arabia will design, construct, and hand over the facility to XDS by June 2026. The project will utilize Desert Dragon’s Tier III certified infrastructure and immersion cooling technology to support high-density workloads such as AI, machine learning, blockchain, and other GPU-intensive applications. The facility will set a new benchmark for energy-efficient, high-performance computing in the region.

Saudi Arabia Data Center Colocation Market Trends

This section discusses the key market trends that are influencing the various segments of the Saudi Arabia Data Center Colocation market, as found by our team of research experts.

Rapid Expansion of Cloud & AI-Ready Facilities

The rapid growth of cloud and AI-ready facilities is one of the key trends influencing the Saudi Arabia data center colocation market. Companies are now demanding infrastructure with the ability to support high-performance workloads, including AI, machine learning, and analytics of big data. As such, operators are investing in Tier III and IV certified centers that feature high power density and cooling, as well as hyperscale readiness. The given shift is not only a contributor to cloud migration but also makes Saudi Arabia a regional center of AI-driven digital ecosystems. For instance, on January 17, 2025, Gulf Data Hub and KKR announced that funds affiliated with KKR will acquire a stake in GDH. The investment, which is subject to customary regulatory approvals, is being made through KKR’s Global Infrastructure strategy. KKR and GDH are committing to support over USD 5 billion of total investment to build out data center capacity, supporting the significant rise in hyperscale demand, AI, and digital-focused national priorities across the Gulf countries.

Saudi Arabia Data Center Colocation Industry Segmentation

This section provides an analysis of the key trends in each segment of the Saudi Arabia Data Center Colocation market report, along with forecasts at the regional and provincial levels for 2025-2033.

The retail colocation market dominated the market share in 2024.

Based on type, the market is segmented into retail colocation and wholesale colocation. Among these, the retail colocation market held the largest share in 2024 because the enterprises are shifting towards smaller but scaled footprints that are managed by service providers rather than developing expensive in-house infrastructure. Additionally, scalability enables companies to increase capacity in response to digital transformation without requiring significant initial capital. The growing need for hybrid cloud and data security is establishing retail colocation as the preferred entry mode for many organizations.

The IT and telecom segments held a considerable market share in 2024.

Based on end-use industry, the market is segmented into BFSI, IT and telecom, e-commerce and retail, government & defense, education, and others. Among these, the IT and telecom segments held a considerable market share in 2024 due to the rising demand for infrastructure with large capacity and low latency to handle cloud services, as well as the rollout of 5G and digital platforms. The requirement for secure data storage and real-time connections drives continuous investment in sophisticated colocation facilities. For example, on February 7, 2025, Salam partnered with Netskope, a global leader in security and networking, to enhance data center services in the Kingdom. This collaboration will leverage Salam’s advanced data center infrastructure and Netskope’s expertise to provide secure and reliable colocation services for businesses.

The Central Region led the market

The Central Region is home to numerous ministries of state, regulators, and corporate headquarters. Additionally, a significant number of data centre infrastructures are located in Riyadh, driven by the digital transformation of Vision 2030 and government projects. Moreover, the availability of BFSI, telecom, and multinational businesses ensures a secure, compliant, and high-capacity colocation workflow. Also, smart governance, cloud-first policies, and investments in AI adoption are compelling operators to increase their investments in Tier III and Tier IV data centers.

For example, on February 17, 2025, Etihad Etisalat Company (Mobily) announced that it would invest a substantial SAR 3.4 billion (approximately USD 905 million) in digital infrastructure in the Middle East. The announcement was made during the concluded LEAP 2025 technology conference in Riyadh. The amount would be invested in data centers, submarine cables, and fiber networks.

Saudi Arabia Data Center Colocation Industry Competitive Landscape

The Saudi Arabia Data Center Colocation market is competitive, with several global and international market players. The key players are adopting different growth strategies to enhance their market presence, such as partnerships, agreements, collaborations, new product launches, geographical expansions, and mergers and acquisitions.

Top Saudi Arabia Data Center Colocation Companies

Some of the major players in the market are solutions by stc, DataVolt, WafaiCloud, DETASAD (Detecon Al Saudia Co. Ltd.), center3, Etihad Salam Telecom Company (Salam), Sahara Net, Zenlayer, Inc., EDGNEX Data Centres by DAMAC, Etihad Etisalat Company (Mobily).

Recent Developments in the Saudi Arabia Data Center Colocation Market

• On February 13, 2025, Ooredoo Group and Iron Mountain announced a landmark strategic partnership, which will see the global leader in information management services take a minority equity stake in Ooredoo’s carrier-neutral data centre company, MENA Digital Hub. Also, to meet the rising demand for colocation, AI, Cloud services, and hyperconnectivity in the region.
• On February 10, 2025, NEOM and DataVolt signed a landmark agreement, marking a significant step toward realizing the Kingdom’s vision for a sustainable, data-driven economy in Oxagon, Red Sea coast.
  • An initial investment of USD 5 billion by DataVolt will fund the first phase of the factory’s development, expected to be operational by 2028.
  • The agreement marks a significant milestone in the expansion of KSA's digital infrastructure, reinforcing its position as the region’s leading data hub.
• On October 6, 2023, stc group signed a strategic partnership with Red Sea Global (RSG), marking a significant milestone. This agreement aims to facilitate digital transformation and empower tourist destinations along the Red Sea coast by adopting state-of-the-art communication technologies and digital services, focusing on seamless and sustained connectivity services.

Saudi Arabia Data Center Colocation Market Report Coverage

Reasons to Buy the Saudi Arabia Data Center Colocation Market Report:

• The study includes market sizing and forecasting analysis confirmed by authenticated key industry experts.
• The report briefly reviews overall industry performance at a glance.
• The report covers an in-depth analysis of prominent industry peers, primarily focusing on key business financials, type portfolios, expansion strategies, and recent developments.
• Detailed examination of drivers, restraints, key trends, and opportunities prevailing in the industry.
• The study comprehensively covers the market across different segments.

Customization Options:

The Saudi Arabia Data Center Colocation Market can further be customized as per requirements or any other market segment. Besides this, UnivDatos understands that you may have your own business needs; hence, feel free to contact us to get a report that completely suits your requirements.