The global data center market size is expected to reach revenues of around $174 billion by 2023, growing at a CAGR of about 4% in 2018–2023.

This market research report on the global data center market offers analysis on market size & forecast, market share, industry trends, growth drivers, and vendor analysis. The industry analysis report also includes insights on segmentation by electrical infrastructure (UPS systems, generators, transfer switches & switchgear, rack PDU, and other electrical infrastructure), by mechanical infrastructure (cooling systems, rack, and other infrastructure), by IT infrastructure (server, storage, and network), by tier standard (Tier I & II, Tier III, and Tier IV), by general construction (building development, installation and commissioning services, building design, physical security, and DCIM), and by geography (North America, Europe, APAC, Latin America, and MEA).

Key highlights of the global data center market:

• The major drivers of market growth is owing to the rising number of social media users, connected reality, and higher penetration of smart devices.
• Innovations in cooling systems, development of tropical and underwater facilities, and battery technology is expected to revolutionize the market landscape.
• Renewable energy source contributes to the mega data center development. Initiatives like RE100 will play a role in the use of renewable energy among data centers.
• The investments in more than 30 submarine cable projects will majorly boost data center development across developing countries, specifically in the APAC region.
• Countries such as the US, the UK, France, Germany, China, and Japan will be the major contributor towards the adoption of high-performance infrastructure that enables the processing of mission-critical workloads.

Market Overview

The increasing focus in the adoption of advanced technologies such as cloud-based services and IoT will augment the growth of the market. The construction of hyperscale facilities spanning with an area of over 200,000 square feet across the globe will create lucrative opportunities for leading vendors operating in the global data center market. Companies such as Facebook, Google, Amazon Web Services (AWS), and Microsoft are amongst the most significant companies focusing on the development of modular and hyperscale datacenter construction facilities. Colocation providers are investing millions of dollars and are focusing on the APAC and Middle East regions towards the deployment of new facilities. The increasing investments towards the development of a digital economy by laying submarine fiber cables, improving rural and urban broadband connectivity, and aiding in the establishment of new facilities that enable technological advancements will drive the demand in the global data center market. The extensive use of 4G LTE technology and upcoming 5G rollouts will increase internet penetration and stimulate the growth of the global data center market. The emergence of edge computing is one of the primary factors fostering facilities development in secondary data centers across the globe.

The increasing efforts to reduce power consumption, carbon emissions, and promote operational efficiency will attribute to the adoption of energy-efficient infrastructure in the global data center market. The leading vendors are investing in the development of design innovation, and the implementation of advanced cooling systems is propelling the growth of the market. 

Market Dynamics

The adoption of hyper-converged infrastructure will have a higher impact on the growth of the market because it enables operating software-defined datacenter (SDDC) environments. Most of the vendors in the market are involved in innovating its hyper-converged infrastructure (rack-scale system) offerings that include necessary hardware and software to process workloads with added simplicity, flexibility, scalability, and affordability. Several enterprises are focusing on the adoption of colocation spaces comprising 1-10 rack systems, will prefer to the procurement of converged or hyper-converged systems. However, it is dependent on the cost of these systems and operational needs. The use of these systems can reduce IT administrative tasks considerably. Predominant use case of hyper-converged infrastructure is virtual desktop infrastructure (VDI) solutions. However, the use of these platforms for other workloads, especially in a hybrid cloud environment is growing rapidly. Increased deployment of cloud workloads such as artificial intelligence (AI), IoT, and big data will aid the growth of converged and hyper-converged infrastructure in the global data center market during the forecast period.

Market Segmentation

This market research report includes a detailed segmentation of the market by electrical infrastructure, mechanical infrastructure, IT infrastructure, tier standard, general construction, and geography.

Market – By Electrical Infrastructure

Increase in the deployment of fuel cells might have a major negative impact on the global market

The global data center market by electrical infrastructure is divided into UPS systems, generators, transfer switches & switchgear, rack PDU, and other electrical infrastructure. UPS systems dominated the market size in 2017, growing at a CAGR of more than 6% during the forecast period. The leading infrastructure providers are procuring modular rack-level UPS systems that can support only that infrastructure with a capacity of up to 40 kW in the global data center market. Moreover, the implementation of  UPS systems per data hall with a capacity of around 2-3MW per hall to provide redundant backup power during an outage will contribute to the growth of this segment. The top operators are investing in the development of innovative UPS systems to reduce power wastage during conversion, improve their efficiency, and lower the OPEX through lesser maintenance costs. The cost of procuring lithium-ion UPS systems will continue to decline during the forecast period, growing the market for facilities UPS systems.

Market – By IT Infrastructure

Demand for mission-critical servers, all-flash arrays, hybrid storage arrays, 25/50GbE Ethernet switch ports will grow in the global data center market during the forecast period

The IT infrastructure segment is classified into the server, storage, and network. The server infrastructure occupied the majority of the market share in 2017, growing at a CAGR of around 2% during the forecast period. The top operators are focusing on the adoption of server infrastructure that best suits their workload needs. The selection of server infrastructure primarily depends on factors such as form factors, energy consumption, and virtualization technologies in the global market. In the server segment, the processor based on x86 architecture dominates the data center market with around 85% of the share. The vendors are offering servers suitable for cloud infrastructure comprising multicore processors, and high capacity memory to grow it the adoption rate in the global data center market. The companies also prefer severs that can enable them to reduce space in the facilities environment, meanwhile providing higher performance. The adoption of server infrastructure based on open community project (OCP) designs will attribute to the growth of IT infrastructure in the global data center market. This research report also includes data center market size analysis on hard disk drives (HDD), solid-state drives (SSD), all-flash array systems, hybrid array systems, and shipment of server and network switches (1/10/25/40/50/100 GbE).

Market – By Mechanical Infrastructure

The free cooling technique will grow in the US and European Continent, where water-based cooling techniques will dominate the APAC region

The mechanical infrastructure is segmented into cooling systems, rack, and other infrastructure. Cooling systems segment to dominate the market share in 2017, growing at a CAGR of over 5% during the forecast period. The use of indirect evaporative cooler and air or water-side economizers across countries with colder climatic conditions will propel the growth of this segment in the global data center market. The integration of 2N redundant cooling systems across Tier III facilities will revolutionize the global market. The leading vendors are offering Energy Star certified systems  with the in-built redundant cooling capacity to attract customers in the market. The operational metrics such as power usage effectiveness (PUE), water-usage effectiveness (WUE), and carbon usage effectiveness (CUE) are gaining immense importance in the global data center market.

Market – By General Construction

Design of sustainable facilities environment with PUE of less than 1.3 coupled with the integration of AI and remote monitoring to grow globally.

The general construction segment is categorized into building development, installation and commissioning services, building design, physical security, and DCIM. The physical security segment occupied a considerable market share in 2017, growing at a CAGR of over 9% during the forecast period. The installation of security systems that comprise sensors that are integrated with the existing DCIM solutions for real-time remote monitoring benefits will propel the growth of this segment in the global market. The facilities operators are opting for analytics of video surveillance recording and protecting facilities from EMP and lightning during natural disasters in the global market.

Market – By Tier Standards

The construction of Tier III facilities dominates the market and flexible design pattern are being followed to add more redundancy on support infrastructures in the global data center market

The tier standards are segmented into Tier I & II, Tier III, and Tier IV. Tier III standard facilities dominated the market share in 2017, growing at a CAGR of more than 5% during the forecast period. Most of the new facilities deployment in the market are of Tier III standards with a minimum of N+1 redundancy. The operators are also offering facilities that can be reconfigured with up to 2N+1 redundancy as the demand arises to sustain the competition in the global data center market. The investment in Tier III facilities is about $780 per square feet, where the construction cost varies based on the facility location. This entirely depends on the redundancy adopted by infrastructure, with a minimum of N+1. The construction of Tier IV facilities is expected to experience significant growth during the forecast period.

Market – By Geography

Latin America and MEA will experience a higher growth rate during the forecasted period

Americas occupied the largest market share in 2017, growing at a CAGR of over 2% during the forecast period. The billion-dollar investments by colocation providers, hyperscale operators, enterprises, and government agencies are propelling the demand of data centers. The US dominates the market when it comes to the adoption of innovative infrastructure solutions such as all-flash arrays, hybrid arrays, and hyper-converged infrastructure solutions. The adoption of 2N redundancy configuration will grow among UPS systems and PDUs, while generators and cooling systems are still adopting N+1 or N+N configurations in the Americas. Innovations in power sources such as lithium-ion UPS systems, DRUPS, and fuel cells will propel the development of this region in the global data center market.

Key Countries Profiled

• US
• Canada
• Western Europe
• Nordic Region
• Eastern Europe
• China & Hong Kong
• Australia
• Singapore

Key Vendor Analysis

The global data center market comprises of various vendors who control the level of competition. The market consists of multiple participants in the vendor space. The vendors in this report are categorized into three participants namely, 

• Datacenter Critical (IT) Infrastructure Providers: It includes companies that sell IT infrastructures such as server, storage, and network products.
• Datacenter Support Infrastructure Providers: It includes vendors involved in providing power, cooling, rack, security, and infrastructure management products. 
• Data Center Construction Contractors: It includes general contractors and sub-contractors engaged in the design, project management, installation and commissioning services of facilities infrastructure

Multiple innovations are carried out by vendors operating in each space. IT infrastructure vendors are focusing on providing solutions that best suits business operational environments. Power players are focusing on efficiency, cooling players focusing on reducing power consumption, and architectural firms are incorporating innovative design to gain a larger market share over the next few years.

The major vendors in the global data center market are:

• By IT Infrastructure Providers
  • HPE
  • Cisco
  • Dell Technologies
  • IBM
  • Huawei
• By Support Infrastructure Providers
  • ABB
  • Eaton
  • Rittal
  • Schneider Electric
  • STULZ
  • Vertiv
  • Caterpillar
  • Cummins
• By Facilities Operators
  • AECOM
  • DPR Construction
  • HDR Architecture
  • Holder Construction
  • Jacobs Engineering Group
  • Mercury Engineering
  • M+W Group

Other prominent vendors include Arista, Atos, Broadcom, Extreme Network, Hitachi Vantara, Inspur Group, Inventec, Juniper, Lenovo, NEC, NetApp, Oracle, Pure Storage, Quanta Computer, Super Micro Computer, Wistron,  Airedale Air Conditioning, Alfa Laval, Altima Technologies (NetZoom), Bosch Security Systems (Robert Bosch), Condair Group, Delta Group, GE, Legrand, Nlyte Software, Mitsubishi Electric Corporation, MTU On Site Energy, Socomec Group, Trane (Ingersoll Rand), Arup Group, Cap Ingelec, Corgan, CSF Group, Fluor Corporation, Fortis Construction, Gensler, Gilbane Building Co., Jones Engineering Group, KKR Investment Group, Morrison Hershfield, Mortenson Construction, Structure Tone, Syska Hennessy Group, and Whiting-Turner Contracting

Key market insights include

1. The analysis of the global data center market provides market size and growth rate for the forecast period 2018-2023.
2. It offers comprehensive insights on current industry trends, trend forecasts, and growth drivers about the global data center market.
3. The report provides the latest analysis of market share, growth drivers, challenges, and investment opportunities.
4. It offers a complete overview of market segments and the regional outlook.
5. The report provides a detailed overview of the vendor landscape, competitive analysis, and key market strategies to gain a competitive advantage.