Israel Data Center Market - Investment Analysis & Growth Opportunities 2025-2030

MARKET OUTLOOK

The Israel data center market size will witness investments of USD 1.39 billion by 2030, growing at a CAGR of 13.23% during the forecast period. Israel is a key data center destination in the Middle East, supported by digital transformation, government demand, and international investments. The country has shown remarkable resilience amid geopolitical tensions, including ongoing conflicts, which have introduced specific challenges and considerations. Also, in 2024, the Israel data center market accounted for over 19% of the total investment in the data center market in the Middle East, making it the third-largest market in the region. From 2025 to 2030, it is projected that investments in Israel's data center market (excluding IT infrastructure) will exceed USD 4.1 billion.

Israel will continue to contribute toward the digital economy in the Middle East and act as a vital location for companies looking to grow within as well as outside of the region. The country's strategic location, advanced digital infrastructure, and encouraging government measures are projected to propel the market's growth over the projection period. Furthermore, Israel's Nimbus project alongside growing digitalization has driven a surge in hyperscale data center demand in the last two years, with AWS, Microsoft, Google, and Oracle, collocating multi-MW of capacity in the market. For instance, Oracle launched its cloud region in the Bynet Data Communications’ underground data center in Jerusalem.

KEY HIGHLIGHTS

1. The growth of the Israel data center market is expected to continue, driven by demand for cloud services, AI applications, and digital transformation. However, the future trajectory of this growth may depend on the duration and intensity of the conflict.
2. The Israeli government has been actively promoting the data center industry. It has established an ambitious target to achieve between 600 to 700 MW of data center capacity by 2030. This initiative is part of a broader strategy to enhance the country’s technological infrastructure, attract foreign investment, and meet the growing demand for digital services.
3. The physical security of data centers in Israel has long been a significant concern. The strategic importance of underground data centers has increased in response to ongoing conflicts, including the recent war in Israel. Located well below the surface, these data centers are protected from bombs, missile strikes, and other physical threats.
4. In terms of area, Tel Aviv and Petah Tikva are the prominent locations for data center investments in the Israel data center market. Jerusalem, Rosh Haayin, Tirat Carmel, and Raanana are the emerging locations that attract data center developments.

WHY SHOULD YOU BUY THIS RESEARCH?

1. Market size available in the investment, area, power capacity, and Israel colocation market revenue.
2. An assessment of the data center investment in Israel by colocation, hyperscale, and enterprise operators.
3. Data center investments in the area (square feet) and power capacity (MW) across cities in the country.
4. A detailed study of the existing Israel data center market landscape, an in-depth industry analysis, and insightful predictions about the Israel data center market size during the forecast period.
5. Snapshot of existing and upcoming third-party data center facilities in Israel
6. Facilities Covered (Existing): 28
7. Facilities Identified (Upcoming): 27
8. Coverage: 10+ Cities
9. Existing vs. Upcoming (Data Center Area)
10. Existing vs. Upcoming (IT Load Capacity)
11. Data center colocation market in Israel
12. Colocation Market Revenue & Forecast (2021-2030)
13. Wholesale vs. Retail Colocation Revenue (2021-2030)
14. Retail Colocation Pricing
15. Wholesale Colocation Pricing
16. The Israel data center landscape market investments are classified into IT, power, cooling, and general construction services with sizing and forecast.
17. A comprehensive analysis of the latest trends, growth rate, potential opportunities, growth restraints, and prospects for the market.
18. Business overview and product offerings of prominent IT infrastructure providers, construction contractors, support infrastructure providers, and investors operating in the industry.
19. A transparent research methodology and the analysis of the demand and supply aspects of the market.

VENDOR LANDSCAPE

1. The Israel data center market is predominantly led by local operators such as Adgar Investments and Development, MedOne, Bezeq International, and Bynet Data Communications, as well as global players such as EdgeConneX, Compass Datacenters, Global Technical Realty, and Serverfarm. These companies have strengthened their operations to support the increasing demand driven by digital transformation initiatives across the country.
2. All three major global cloud service providers Amazon Web Services (AWS), Google, and Microsoft have dedicated cloud regions in the country, each with three availability zones. They are capitalizing on the growing cloud adoption and the expanding digital economy. In addition, Oracle Cloud is actively increasing its presence in the Israel data center market. It plans to launch a new cloud region in Tel Aviv, with existing operations in Jerusalem, which currently has one availability zone.
3. New entrants in the Israel data center market include Techtonic, Anan, Mega Data Centers, NED, and others. Further, Kardan Israel and Geva Real Estate have launched separate business entities named Serverz Data Center and MultiDC - Data Center Campus which are also making significant investments in the market.
4. Mega Data Centers, one of the new entrants into the Israel data center market has planned to develop six data center facilities with a cumulative power capacity of over 489 MW. The first data center, MDCIL-1 Modiin is currently under development which will offer 32 MW power capacity by Q2 2025.

EXISTING VS. UPCOMING DATA CENTERS

1. Existing Facilities in the Region (Area and Power Capacity)
2. Tel Aviv
3. Other Cities
4. List of Upcoming Facilities in the Region (Area and Power Capacity)
5. Tel Aviv
6. Other Cities

REPORT COVERAGE:

This report analyses the Israel data center market share. It elaboratively analyses the existing and upcoming facilities and investments in IT, electrical, mechanical infrastructure, general construction, and tier standards. It discusses market sizing and investment estimation for different segments. The segmentation includes:

1. IT Infrastructure
2. Server Infrastructure
3. Storage Infrastructure
4. Network Infrastructure
5. Electrical Infrastructure
6. UPS Systems
7. Generators
8. Transfer Switches & Switchgears
9. PDUs
10. Other Electrical Infrastructure
11. Mechanical Infrastructure
12. Cooling Systems
13. Rack Cabinets
14. Other Mechanical Infrastructure
15. Cooling Systems
16. CRAC and CRAH Units
17. Chillers Units
18. Cooling Towers, Condensers and Dry Coolers
19. Other Cooling Units
20. General Construction
21. Core & Shell Development
22. Installation & Commissioning Services
23. Building & Engineering Design
24. Fire Detection & Suppression Systems
25. Physical Security
26. Data Center Infrastructure Management (DCIM)
27. Tier Standard
28. Tier I & II
29. Tier III
30. Tier IV

VENDOR LANDSCAPE

1. IT Infrastructure Providers: Broadcom, Cisco, Dell Technologies, Fujitsu, Hewlett Packard Enterprise, Hitachi Vantara, IBM, Lenovo, and NetApp.
2. 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, and Yeda Engineering.
3. 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 and Vertiv.
4. Data Center Investors: Adgar Investments & Development, Amazon Web Services, Bezeq International, Bynet Data Communications, Compass Datacenters, EdgeConneX, Global Technical Realty, MedOne, Microsoft, Oracle, and Serverfarm.
5. New Entrants: Anan, Mega Data Centers, MultiDC - Data Center Campus, NED, Serverz Data Center, and Techtonic.