Oman’s Data Centre Investments to Reach $428 million by 2026

Investments in the data centres of Sultanate of Oman is expected to Reach $428 million by 2028, growing at a CAGR of 9.6% between 2023-28, according to a report from the US-based Arizton Advisory & Intelligence.

Oman is among the major digital hubs, driven by government digitalization initiatives, cloud-based services, the adoption of advanced technologies such as big data IoT and AI, and robust submarine cable connectivity with EMEA and APAC regions.

The rise in digital transformation strategies and the adoption of cloud computing by enterprises are likely to increase cloud server adoption in Oman.

Most data centres in Oman are equipped with N+1 redundancy UPS systems that can increase to up to 2N redundancy as per client requirements. The adoption of VRLA battery-based UPS systems dominates the market with over 90% share.

Oman has the presence of 14 submarine cables that are connected to the Asia, Europe, Middle East, and Africa (AEMEA) region. Further, due to increasing demand for digitalization, the deployment of four upcoming submarine cables such as 2Africa, India Europe Xpress (IEX), Raman, and Singapore India Gateway (SING) Cable, is expected to further boost the data centre hub in the country, the report said.

The country’s on-premises data centre is increasing, and government entities are migrating their workloads to third-party colocation data centres. For instance, Oman’s Ministry of Health also rents rack space from a third-party colocation facility.

Oman’s government set targets to increase the digital economy contribution to around 10% of the total GDP and the contribution from information technology to around 35% by 2040.

Further, the government has three free trade zones: Al Mazunah Free Zone, Salalah Free Zone, and Sohar Free Zone, and two special zones, Duqm SEZ and Knowledge Oasis Muscat (KOM). These zones provide multiple benefits to investors, including corporate tax exemption for up to 10 years, full exemption of import and export taxes, and local labor recruitment support.

Key Highlights

The increasing demand for migration to cloud platforms by various sectors have attracted local and global cloud service providers in the Oman data centre market. For instance, Global Cloud Service operators such as AWS, Microsoft, Oracle, and Google have a presence with local operators in Oman, the report said.

In December 2022, Oman’s Ministry of Transport, Communications, and Information Technology (MTCIT) signed a Memorandum of Understanding (MoU) with Amazon Web Services (AWS) for the launch of cloud service data centres in the country.

Regarding 5G connectivity, telecom operators like Omantel, Ooredoo, Nokia, Ericsson, and Vodafone are working towards deploying 5G technology in the country.

The government has launched its strategies, such as Vision 2040 and National Energy Strategy, which aim to generate around 30% of the electricity from renewable energy sources by 2030.

“In August 2022, the Ministry of Housing and Urban Planning, part of Oman Vision 2040, was involved in developing three smart cities in the country. The smart cities are expected to be developed in Salala, Nizwa, and Sohar in Oman,” the report added.