According to Arizton’s latest research report, the Israel data center market is growing at a CAGR of 13.23% during 2024-2030.
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Report Scope:
Market Size -Investment (2030): $1.39 Billion
Market Size – Area (2030): 371 Thousand Sq. Ft
Market Size – Power Capacity (2030): 89 MW
CAGR -Investment (2024-2030): 13.23%
Colocation Market Size – Revenue (2030): $295 Million
Historic Year: 2021-2023
Base Year: 2024
Forecast Year: 2025-2030
The Israel data center market is experiencing significant growth. Government initiatives like the Digital Israel project are fueling this growth, providing grants, tax exemptions, and financial incentives to attract both local and international investors. Key players include local operators such as MedOne, Bezeq International, and Bynet Data Communications, along with global giants like AWS, Microsoft, and Oracle. New entrants like Techtonic and NED are also making major investments to expand their operations in Israel. Cloud providers have established dedicated regions in strategic locations like Tel Aviv and Jerusalem, enhancing Israel’s position in the global cloud ecosystem. Notably, Salesforce’s introduction of its Hyperforce platform in Israel and MedOne’s $270 million investment in underground data centers reflect the country’s growing appeal for secure, scalable digital infrastructure. Despite geopolitical tensions, the Israel data center sector remains robust, with major developments continuing to shape its future.
Growth and Investment in Israel’s Data Center Market
Israel’s data center market is expanding, with key investment locations in Tel Aviv, Petah Tikva, and emerging cities like Jerusalem and Rosh Haayin. Business-friendly zones such as the Tel Aviv Metropolitan Area and Haifa Bay offer incentives for foreign investors, attracting high-tech and logistics companies. Industrial rents in high-demand areas range from $15 to $20 per square foot, while more affordable zones like Haifa Bay offer rates between $10 to $14.
Notable upcoming developments include MedOne’s underground data centers in Kfar Yona, Keystone’s facilities in Be’er Tuvia, and new projects by NVIDIA, Techtonic, and NED. These investments highlight the growing demand for data center space in Israel.
Israel Smart City Developments and Data Center Integration
Israel is leading the charge in smart city development, integrating technologies like IoT, AI, and big data to improve urban living. Cities like Tel Aviv and Haifa are pioneering real-time traffic management, digital services, and energy efficiency. The growing digital economy, fueled by increasing internet penetration and online services, directly impacts the data center market, driving demand for infrastructure to support smart city projects.
Key initiatives like the Digital Israel Initiative and Tel Aviv’s Smart City Lab focus on transforming public services and creating interconnected urban systems. These projects leverage data centers to enable e-governance and optimize resource management. For example, IoT devices in smart cities help monitor and manage electricity and water usage efficiently.
Israel’s data center market is supported by global technology companies such as Google, AWS, and Microsoft, whose platforms host various smart city applications. Additionally, innovations in urban transportation, such as Waze and Mobileye’s autonomous vehicles, rely on data centers for processing real-time traffic data, further enhancing Israel’s smart city landscape. The country’s focus on sustainability, innovation, and advanced infrastructure is attracting international tech investments and shaping its technological and economic future.
Data Center Cooling Systems in Israel
Israel data centers utilize advanced cooling technologies to ensure optimal performance and reliability. Most facilities implement CRAC (Computer Room Air Conditioning) units and chiller units with N+1 redundancy, ensuring backup cooling capabilities. Notable examples include Infinity’s Raanana data center, Bezeq International’s state-of-the-art facility, and MedOne’s centers, all featuring N+1 redundant CRAC units and chillers. Larger data centers are adopting more sustainable solutions, such as water-based cooling systems, with companies like Serverfarm incorporating air-cooled chillers and free cooling with CRAH. NED’s Alpha data center is pioneering direct liquid cooling (DLC) for continuous, redundant cooling, while Anan’s Afula data center utilizes highly efficient 2N water-cooled chillers with N+1 CRAH support. These advanced systems are crucial for managing high electricity consumption and ensuring high reliability across Israel’s data center infrastructure.
Why Should You Buy this Research?
This research provides a comprehensive overview of Israel’s data center market, offering insights into the investment, growth trends, and key players in the sector. Key highlights include:
Market Size and Revenue: In-depth analysis of the investment, area, power capacity, and colocation market revenue in Israel.
- Data Center Investments: Assessment of investments from colocation, hyperscale, and enterprise operators, including data center space (sq. ft.) and power capacity (MW) across major cities.
- Current Market Landscape: Detailed study of existing data centers, along with predictions for future growth.
- Facilities Coverage: 28 existing facilities and 27 upcoming facilities across 10+ cities.
- Colocation Market: Revenue forecasts (2021-2030) for colocation services, including wholesale vs. retail and pricing trends.
- Investment Breakdown: Classification of market investments by IT, power, cooling, and construction services, with sizing and forecasts.
- Market Trends: Insight into the latest trends, growth opportunities, challenges, and industry prospects.
- Key Players: Business overview and offerings of leading IT infrastructure providers, contractors, and investors.
- Research Methodology: Transparent methodology with detailed demand and supply analysis.
This research offers crucial data for understanding the potential and future direction of the Israel data center market.
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The report includes the investment in the following areas:
IT Infrastructure
- Server Infrastructure
- Storage Infrastructure
- Network Infrastructure
Electrical Infrastructure
- UPS Systems
- Generators
- Transfer Switches & Switchgears
- PDUs
- Other Electrical Infrastructure
Mechanical Infrastructure
- Cooling Systems
- Rack Cabinets
- Other Mechanical Infrastructure
Cooling Systems
- CRAC and CRAH Units
- Chillers Units
- Cooling Towers, Condensers and Dry Coolers
- Other Cooling Units
General Construction
- Core & Shell Development
- Installation & Commissioning Services
- Building & Engineering Design
- Fire Detection & Suppression Systems
- Physical Security
- Data Center Infrastructure Management (DCIM)
Tier Standard
- Tier I & II
- Tier III
- Tier IV
Vendor Landscape
IT Infrastructure Providers
- Broadcom
- Cisco
- Dell Technologies
- Fujitsu
- Hewlett Packard Enterprise
- Hitachi Vantara
- IBM
- Lenovo
- NetApp
Data Center Construction Contractors & Sub-Contractors
- Ashtrom Group
- Auerbach Halevy Architects
- Electra Group
- M+W Group
- Mercury
- Margolin Bros. Engineering & Consulting
- MiCiM
- Saan Zahav
- Skorka Architects
- Yeda Engineering
Support Infrastructure Providers
- ABB
- Caterpillar
- Cummins
- Delta Electronics
- Eaton
- ETAP
- HITEC Power Protection
- Johnson Controls
- Keysight Technologies
- Legrand
- Mitsubishi Electric
- Rittal
- Rolls-Royce
- Schneider Electric
- Siemens
- STULZ
- Vertiv
Data Center Investors
- Adgar Investments & Development
- Amazon Web Services
- Bezeq International
- Bynet Data Communications
- Compass Datacenters
- EdgeConneX
- Global Technical Realty
- MedOne
- Microsoft
- Oracle
- Serverfarm
New Entrants
- Anan
- Mega Data Centers
- MultiDC – Data Center Campus
- NED
- Serverz Data Center
- Techtonic
Key Questions Answered in the Report:
How big is the Israel data center market?
What factors are driving the Israel data center market?
What is the growth rate of the Israel data center market?
How much MW of power capacity will be added across Israel during 2025-2030?
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