Israel Data Center Market Size

The Israel Data Center Market is experiencing significant growth, with its capacity and colocation revenue expected to expand substantially over the forecast period. The market's expansion is driven by the increasing demand for higher redundancy rates, prompting colocation service providers to develop more Tier 3 and Tier 4 facilities. These facilities are crucial in meeting the needs for reduced latency and faster data transfer rates, which are essential for the deployment of cloud-based products. The existing infrastructure, primarily consisting of Tier 3 facilities, supports the demand for modern technologies, while the anticipated growth in Tier 4 facilities is set to further bolster the market's capacity.

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Israel Data Center Market Summary
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svg icon Study Period 2017 - 2029
svg icon Market Volume (2024) 174.8 MW
svg icon Market Volume (2029) 277.2 MW
svg icon Largest Share by Tier Type Tier 3
svg icon CAGR (2024 - 2029) 9.66 %
svg icon Fastest Growing by Tier Type Tier 3

Major Players

Israel Data Center Market Major Players

*Disclaimer: Major Players sorted in no particular order

Key Players

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Israel Data Center Market Analysis

The Israel Data Center Market size is estimated at 174.8 MW in 2024, and is expected to reach 277.2 MW by 2029, growing at a CAGR of 9.66%. Further, the market is expected to generate colocation revenue of USD 573.1 Million in 2024 and is projected to reach USD 919.2 Million by 2029, growing at a CAGR of 9.91% during the forecast period (2024-2029).

USD 573.10 Million

Market Size in 2024

USD 919.2 Million

Market Size in 2029

9.3%

CAGR (2017-2023)

9.9%

CAGR (2024-2029)

IT Load Capacity

174.8 MW

Value, IT Load Capacity, 2024

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The IT load capacity of the data center market will have steady growth and is expected to reach 277.2 MW by 2029. The construction of new large-size data center facilities underway in Tel Aviv would increase IT load capacity.

Total Raised Floor Space

Sq. Ft. 0.62 M

Volume, Raised Floor Space, 2024

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The total raised floor area of the country is expected to increase to 0.9 million sq. ft by 2029. Due to technological advancement and ever-growing data transfer in the future, massive size facilities may rise.

Installed Racks

31,363

Volume, Installed Racks, 2024

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The number of installed racks is expected to reach 49,737 units by 2029. With the increasing presence of global conglomerates, the ecosystem for hyperscale facilities is growing.

# of DC Operators & DC Facilities

11 and 25

Volume, DC Facilities, 2024

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There are 25 colocation data center facilities in Israel. The region has a cable landing station for multiple major fiber cables in Israel, with technological accessibility and the availability of a commercial 5G network.

Leading Market Player

40.2%

Market Share, Med 1 I.C.-1 (1999) Ltd., 2023

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MedOne (Med1 I.C.-1 (1999) Ltd) was the leading player in the Israeli market in the historical period and rolled out four data center facilities with a capacity of 64 MW.

Tier 3 data centers accounts for majority market share in 2023, and expected to maintain dominace during forecasted period

  • Tier 3 data center facilities accounted for an IT load capacity of 62.39 MW in 2022, which is projected to exhibit a CAGR of 2.25% to reach 72.89 MW in 2029.
  • The increasing demand for higher redundancy rates is pushing colocation service providers to introduce more Tier 3 and Tier 4 facilities. The IT load capacity contributed by the existing and upcoming Tier 4 data center colocation facilities in Israel would account for about 66.98 MW by 2029, which would considerably support the overall market growth.
  • The market would witness many cloud aggregators paying attention to the rising demand by Israeli users focusing on lesser latency and faster data transfer rates for highly responsive deployment of their software and cloud-based products.
  • Tier 1 and 2 facilities were not observed in the region, as the market grows in an already developed global portfolio of data centers and fiber connectivity, highlighting how the adequate number of Tier 3 facilities is supporting the growing demand for facilitating modern technologies in Israel. The Tier 3 facilities, coupled with their associated operations and customers, would also create strong grounds for more Tier 4 facilities to surface in Israel during the forecast period.
  • Several end-user service providers, including telecommunication service providers such as Bezeq International, utilize the capabilities of Tier 3 centers to cope with the rising data traffic and networking needs in Israel.
Israel Data Center Market

Israel Data Center Industry Segmentation

Tel Aviv are covered as segments by Hotspot. Large, Massive, Medium, Mega, Small are covered as segments by Data Center Size. Tier 1 and 2, Tier 3, Tier 4 are covered as segments by Tier Type. Non-Utilized, Utilized are covered as segments by Absorption.

  • Tier 3 data center facilities accounted for an IT load capacity of 62.39 MW in 2022, which is projected to exhibit a CAGR of 2.25% to reach 72.89 MW in 2029.
  • The increasing demand for higher redundancy rates is pushing colocation service providers to introduce more Tier 3 and Tier 4 facilities. The IT load capacity contributed by the existing and upcoming Tier 4 data center colocation facilities in Israel would account for about 66.98 MW by 2029, which would considerably support the overall market growth.
  • The market would witness many cloud aggregators paying attention to the rising demand by Israeli users focusing on lesser latency and faster data transfer rates for highly responsive deployment of their software and cloud-based products.
  • Tier 1 and 2 facilities were not observed in the region, as the market grows in an already developed global portfolio of data centers and fiber connectivity, highlighting how the adequate number of Tier 3 facilities is supporting the growing demand for facilitating modern technologies in Israel. The Tier 3 facilities, coupled with their associated operations and customers, would also create strong grounds for more Tier 4 facilities to surface in Israel during the forecast period.
  • Several end-user service providers, including telecommunication service providers such as Bezeq International, utilize the capabilities of Tier 3 centers to cope with the rising data traffic and networking needs in Israel.
Hotspot
Tel Aviv
Rest of Isreal
Data Center Size
Large
Massive
Medium
Mega
Small
Tier Type
Tier 1 and 2
Tier 3
Tier 4
Absorption
Non-Utilized
Utilized
By Colocation Type
Hyperscale
Retail
Wholesale
By End User
BFSI
Cloud
E-Commerce
Government
Manufacturing
Media & Entertainment
Telecom
Other End User
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Israel Data Center Market Size Summary

The Israel Data Center Market is experiencing significant growth, driven by the increasing demand for advanced data processing and storage solutions. The market is characterized by a strong focus on Tier 3 and Tier 4 facilities, which are being developed to meet the rising needs for higher redundancy and faster data transfer rates. This growth is supported by the expanding digitalization across various sectors, including telecommunications and e-commerce, which are contributing to the surge in data traffic and mobile internet usage. The market's expansion is further bolstered by the presence of major players such as Adgar Investments and Development Ltd, Bezeq International General Partner Ltd, EdgeConneX Inc., Lian Group, and ServerFarm LLC, who are actively investing in infrastructure to enhance their service offerings.

The demand for data center services in Israel is also fueled by the increasing number of smartphone users and the penetration of mobile internet subscriptions, which necessitate efficient and robust network solutions. The market is witnessing a shift towards more sophisticated data center facilities to accommodate the growing performance demands from both consumers and businesses. As a result, the Israel Data Center Market is poised for continued expansion, with a focus on enhancing connectivity and supporting the deployment of cloud-based products and services. This growth trajectory is expected to attract further investments and developments in the region, solidifying Israel's position as a key player in the global data center landscape.

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Israel Data Center Market Size - Table of Contents

  1. 1. MARKET SEGMENTATION (INCLUDES MARKET SIZE IN VOLUME, FORECASTS UP TO 2029 AND ANALYSIS OF GROWTH PROSPECTS)

    1. 1.1 Hotspot

      1. 1.1.1 Tel Aviv

      2. 1.1.2 Rest of Isreal

    2. 1.2 Data Center Size

      1. 1.2.1 Large

      2. 1.2.2 Massive

      3. 1.2.3 Medium

      4. 1.2.4 Mega

      5. 1.2.5 Small

    3. 1.3 Tier Type

      1. 1.3.1 Tier 1 and 2

      2. 1.3.2 Tier 3

      3. 1.3.3 Tier 4

    4. 1.4 Absorption

      1. 1.4.1 Non-Utilized

      2. 1.4.2 Utilized

        1. 1.4.2.1 By Colocation Type

          1. 1.4.2.1.1 Hyperscale

          2. 1.4.2.1.2 Retail

          3. 1.4.2.1.3 Wholesale

        2. 1.4.2.2 By End User

          1. 1.4.2.2.1 BFSI

          2. 1.4.2.2.2 Cloud

          3. 1.4.2.2.3 E-Commerce

          4. 1.4.2.2.4 Government

          5. 1.4.2.2.5 Manufacturing

          6. 1.4.2.2.6 Media & Entertainment

          7. 1.4.2.2.7 Telecom

          8. 1.4.2.2.8 Other End User

Israel Data Center Market Size FAQs

The Israel Data Center Market is projected to register a CAGR of 9.66% during the forecast period (2024-2029).

Adgar Investments and Development Ltd (Adgar Data Center), Bezeq International General Partner Ltd, EdgeConneX Inc., Lian Group and ServerFarm LLC are the major companies operating in the Israel Data Center Market.

Israel Data Center Market Report Snapshots

Israel Data Center Market SIZE & SHARE ANALYSIS - GROWTH TRENDS & FORECASTS UP TO 2029