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The hyperscale data center market is estimated to grow at a CAGR of 26.44% between 2022 and 2027. The market size is forecasted to increase by USD 169.47 billion. The growth of the market depends on several factors, including the rising demand for data center colocation facilities, increasing reliance on hyperscale data centers for operational business needs, and a surge in cloud adoption.
This hyperscale data center market report extensively covers market segmentation by type (critical infrastructure and support infrastructure), end-user (BFSI, energy, IT, and others), and geography (North America, APAC, Europe, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The rising demand for data center colocation facilities is notably driving market growth, although factors such as the consolidation of data centers may impede market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The rising demand for data center colocation facilities is notably driving the market growth. An enterprise operating a colocation facility provides more advantages than an enterprise building its data center. Collocation reduces the CAPEX on infrastructure significantly and improves the connectivity required for operational services. Data center colocation refers to a facility that rents computing servers, storage, and network equipment. Colocation facilities help SMEs carry out operations at reduced subscription costs. The number of these facilities is rapidly growing year over year.
Many enterprises build and operate their cloud platforms. They also host these platforms using the managed services model. These enterprises can streamline the operations of their IT infrastructure to achieve better uptime and availability of resources. With the rise in the online presence of enterprises across various industries, the adoption of managed hosting services will increase during the forecast period. Local colocation and managed hosting service providers will witness high investments in hyperscale data centers, which, in turn, will drive the growth of the global hyperscale data center market during the forecast period.
The increasing focus on the construction of green data centers is a key trend shaping the market. The high power consumption and rise in carbon emissions by data centers globally are creating awareness about green data center facilities. These facilities help in increasing energy efficiency, thereby reducing carbon footprint. Some methodologies implemented in green data centers include renewable energy sources, free cooling, consolidation, and waste recycling.
The need for energy-efficient and eco-friendly data centers has led to the emergence of metrics used to calculate the efficiency of data centers, such as include PUE, carbon usage effectiveness, water usage effectiveness, and carbon intensity per unit data. PUE is used to estimate the energy consumed by data center IT equipment relative to the overall power consumed by the data center. Carbon usage effectiveness identifies the total carbon emissions by a data center. Similarly, water usage effectiveness estimates the annual water usage. Thus, the increasing focus on the construction of green data centers is expected to drive the growth of the global hyperscale data center market during the forecast period.
The consolidation of data centers is challenging market growth. Data center consolidation helps in reducing costs. For instance, consolidation reduces costs by up to 30% and power consumption by 55% while improving security by up to 35% and overall efficiency by 50%. In countries such as the US, governments are consolidating data centers to reduce operational costs and direct investments toward efficient computing platforms.
Servers are consolidated to work on single computing hardware, as virtualization boosts the operational efficiency of data center IT infrastructure. The rise in virtualization leads to consolidation and reduces the number of data centers. This hinders infrastructure sales and reduces the footprint of data centers globally. The consolidation of facilities requires time and expertise and involves high risks. Moreover, the increasing business demands further hinder consolidation. Thus, consolidation of data centers can become a major challenge for the growth of the global hyperscale data center market during the forecast period.
The market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Hyperscale Data Center Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Intel Corp. - The company offers hyperscale data centers with the Intel rack scale design. It also focuses on providing workload-optimized platforms and related products for data centers in enterprise, cloud, and communication infrastructure market segments.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the critical infrastructure segment will be significant during the forecast period. Critical infrastructure includes servers, storage, and network.
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The critical infrastructure segment was valued at USD 22.10 billion in 2017 and continued to grow until 2021. The increase in business operational demands owing to the growing adoption of cloud-based services, big data analytics, and IoT drives the demand for data center servers. Investments in server infrastructure are higher compared with other infrastructures in data centers. Enterprise storage is highly reliable, fault-tolerant, and scalable compared with traditional storage, which makes it suitable for enterprises that deal with huge volumes of data. Vendors in the market are moving toward open networking, where the infrastructure is based on Open Industry Standards. In addition, the infrastructure should be programmable using open APIs and an open ecosystem for compatible deployments. These factors will further drive the growth of the global hyperscale data center market in the critical infrastructure segment during the forecast period.
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North America is estimated to contribute 33% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
Investments in data center construction have increased, along with additional investments in sustainable power hotspots for server farm operations. The adoption of cloud computing is accelerating in the US, which is increasing the number of data centers in the country. Therefore, the construction of new data centers and renovation of the existing data centers in the US will contribute significantly to the growth of the market in North America during the forecast period.
The outbreak of the COVID-19 pandemic in 2020 fueled market growth in North America, with the rise in the adoption of the work-from-home model. The restrictions put in place by the governments of various countries significantly increased the number of digital and online transactions. This propelled the demand for automation services and solutions. For instance, in February 2020, Alphabet Inc. announced its plan to invest more than USD 10 billion in offices and data centers across the US. These factors will further drive market growth during the forecast period.
The hyperscale data center market report forecasts market growth by revenue at global, regional, & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Technavio categorizes the hyperscale data center market as a part of the global technology hardware, storage, and peripherals market within the overall global information technology market. The parent market, the global technology hardware, storage, and peripherals market, covers manufacturers of cellular phones, personal computers, servers, electronic computer components, and peripherals. It also includes data storage components, motherboards, audio and video cards, monitors, keyboards, printers, and other peripherals. Our market research report has extensively covered external factors influencing the parent market growth during the forecast period.
Hyperscale Data Center Market Scope |
|
Report Coverage |
Details |
Page number |
178 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 26.44% |
Market growth 2023-2027 |
USD 169.47 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
24.54 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
North America at 33% |
Key countries |
US, China, India, UK, and Germany |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Alphabet Inc., Amazon.com Inc., Broadcom Inc., Cisco Systems Inc., CtrlS Datacenters Ltd., CyrusOne LLC, Dell Technologies Inc., Equinix Inc., Hewlett Packard Enterprise Co., Inspur Systems Inc., Intel Corp., International Business Machines Corp., Microsoft Corp., Nippon Telegraph and Telephone Corp., NVIDIA Corp., Oracle Corp., QTS Realty Trust LLC, Schneider Electric SE, Telefonaktiebolaget LM Ericsson, and Viavi Solutions Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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