HYPERSCALE DATA CENTER INDUSTRY INSIGHTS

The global hyperscale data center market size to grow from USD 100.7 billion in 2020 to USD 126.7 billion by 2026, growing at a Compound Annual Growth Rate (CAGR) of 4.02%. The US accounted for around 46% of the overall hyperscale market share.

The ongoing COVID-19 pandemic is creating a high demand for hyperscale data centers across all regions. As most global workforce shifts to remote working, hyperscale facilities are gaining high traction in the data center market. The increasing adoption of digitalization, rising investments from telecommunication & service providers, and government initiatives towards the digital economy are significant factors for the hyperscale data center market growth. In terms of hyperscale construction, Apple, Facebook, Google, AWS, Microsoft, Alibaba, Baidu, OVH, and China Telecom are some of the hyperscale data center operators investing billions of dollars in the market. 

The US is the highest contributor to hyperscale data center space, followed by China & Hong Kong, and Western Europe. Advancements in 5G installation and increased data generated due to digitization increase the demand for hyperscale facilities. Hyperscale data center growth has been highly focused on countries that offer tax incentives. The development of data centers by hyperscale operators, such as Facebook and Google, will lead to adopting OCP rack infrastructure in data centers. Hyperscale providers such as Microsoft, Facebook, Apple, Google, and Amazon Web Services (AWS) are the major investors in renewable energy initiatives. AWS has 206 renewable energy projects which include 71 wind and solar projects and 135 solar rooftops on data centers.

SNIPPETS

• In North America, the US witnessed investments in about 47 hyperscale data center projects in 2020. The major contributors were Facebook, Google, and Digital Realty, among others.
• More than 50% of enterprises in Canada use SaaS. Private cloud adoption is growing among government agencies and financial services in the country.
• The Brazil market will witness hyperscale data center investments from Equinix, Scala Data Centers, and Ascenty, among other providers, that will contribute further to the growth of the country’s hyperscale data center presence.
• Microsoft, in October 2020, announced plans to establish its first data center in Austria, a move that is expected to bring in over $2 billion in revenue for Austria.
• In the Middle East & Africa, Khazna Data center, Global Data Center Turkcell, IXAfrica, Telecom Egypt, Wingu Data Center, and Teraco Data Environments were the major hyperscale investors in 2020.
• The Ireland hyperscale data center market has witnessed investments from hyperscale operators Facebook, CyrusOne, Digital Realty, and Echelon Data Centres.
• The data center market in APAC is witnessing continued investments from cloud service providers such as AWS, Microsoft, Google, and Alibaba, and in each country, local colocation providers are also expanding their presence with the construction of additional data centers.

HYPERSCALE DATA CENTER GROWTH FACTORS

• Hyperscale data center operators are investing in improving network connectivity between the Americas, APAC, Africa, and European countries, thereby creating growth opportunities in the upcoming years.
• Increased hyperscale data center investment is taking place in regions that offer tax incentives. In 2020, Michigan announced tax incentives for data centers to attract hyperscale investments.
• The US wholesale colocation revenue accounted for around 35% of the country’s overall colocation revenue in 2020 and is expected to grow further in the forecast period. Many wholesale providers are developing hyperscale data centers to cater to future demand.
• Hyperscale operators are also using artificial intelligence (AI) to decrease power consumption and avoid outages to fuel the demand for hyperscale facilities across the globe.

HYPERSCALE DATA CENTER MARKET SEGMENTATION

This research report includes a detailed segmentation by

• IT Infrastructure
• Electrical Infrastructure
• Mechanical Infrastructure
• Cooling Systems
• Cooling Technique
• General Construction
• Geography

INSIGHTS BY IT INFRASTRUCTURE

The demand for servers suitable for cloud environments will continue to grow throughout the forecast period.

The market for server infrastructure has witnessed strong growth in the past two years. The competition between branded and ODM server suppliers will continue because multiple enterprises opt for server infrastructure based on open community designs (OCP). Server systems based on x86 architecture dominated the market with about 85% of the hyperscale data center market share. The increase in demand for server shipments will continue to grow moderately as enterprises are likely to move to the cloud or colocation platforms for their IT infrastructure operations during the forecast period.

INSIGHTS BY ELECTRICAL INFRASTRUCTURE

The global hyperscale data center market by UPS systems is expected to reach USD 3.21 billion by 2026.

UPS systems are widely adopted to provide backup power for cooling systems installed in the facility.  The adoption of lithium-ion batteries is likely to increase during the forecast period. For instance, GPX Global Systems’ data center facilities in India are equipped with Lithium-ion batteries from Eaton. The contribution from colocation providers will be high in terms of lithium-ion UPS solutions. Vendors are also continuously innovating with UPS solutions to boost efficiency and reduce cost.  With the emergence of nickel-zinc batteries and sodium-ion batteries, the adoption of 48V DC UPS systems will continue to grow depending on the effectiveness of these solutions.

INSIGHTS BY MECHANICAL INFRASTRUCTURE

In 2020, the global hyperscale data center by cooling systems market segment was valued at USD 3.41 billion.

In data center projects, the investment in cooling systems is expected to be 15–20% of the overall cost, depending on the facility design and IT load.  The facilities in Southeast Asia, China, India, Australia, the Middle East, and Africa are likely to prefer air-cooled chillers or chilled water systems or a combination of both air and water-based cooling techniques. Free cooling chillers that facilitate partial cooling using outside air are also highly preferred by several hyperscale facilities around the world. Tier IV facilities adopt the 2N+1 redundant configuration for cooling systems. For instance, Equinix’s London 10 data center facility is built with hybrid dry air coolers and chillers, with the N+2 redundancy for chillers and CRAH units with N+20% redundancy.

INSIGHTS BY COOLING SYSTEMS

The global hyperscale data center by chiller units segment is expected to witness an incremental growth of USD 0.15 billion by 2026.

Chiller units are the significant consumers of electricity in data centers that require a reliable and dedicated power supply. Most of the facilities that operate in warm climatic conditions are expected to implement free cooling chillers with smart technologies since they enable operations based on outside temperatures. The adoption of such chiller units is expected to be higher in APAC and MEA than in North America, Western Europe, Nordic, and Eastern Europe. Stack Infrastructure Chicago CHIO2 data center is equipped with N+1 redundancy of air-cooled chillers with integral free-cooling and a rack power density of 7-8 kW per rack.

INSIGHTS BY GENERAL CONSTRUCTION

The global hyperscale data center market by installation and commissioning services was valued at USD 2.62 billion in 2020.

The installation and commissioning process is carried out by engineering contractors, vendors, and data center operators. Installation and commissioning are important aspects of data center development. The growth in greenfield facilities will generate more revenues for installation and commission service providers. Installation should be carried out based on the tier design of the facility. The labor cost in developed countries is higher than that in developing countries.

INSIGHTS BY GEOGRAPHY

In 2020, the top investors in terms of investments in North America include Facebook, Apple, and Google.

The North American hyperscale data center market is leading the global hyperscale data center growth, with over 40% of the total number of hyperscale projects in the overall hyperscale industry. Virginia and Texas are the major markets for hyperscale data center operations, followed by Oregon, Ohio, Georgia, and Utah. In 2020, hyperscale data centers in North America added around 2 GW of power.

INSIGHTS BY VENDORS

HPE is the leading vendor in the server market with a share of around 16%, closely followed by Dell Technologies

Arista Networks, ATOS, Broadcom, Cisco Systems, Extreme Networks, Hewlett Packard Enterprise, Hitachi Vantara, and Huawei Technologies are some of the IT infrastructure providers in the hyperscale data center market. The hyperscale data center market is witnessing significant revenue contributions from ODM server manufacturers such as Quanta Systems (QCT), Wistron (Wiwynn), and Inventec. Vendor offerings are increasingly concentrated on the cloud, big data, artificial intelligence, and IoT-based application workloads.

The hyperscale data center market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments:

• Infrastructure
  • IT Infrastructure
  • Electrical Infrastructure
  • Mechanical Infrastructure
  • General Construction

• IT Infrastructure
  • Server
  • Storage
  • Network
• Electrical Infrastructure
  • UPS Systems
  • Generators
  • Transfer Switches & Switchgears
  • PDUs
  • Other Electrical Infrastructure
• Mechanical Infrastructure
  • Cooling Systems
  • Racks
  • Other Mechanical Infrastructure
• Cooling System
  • CRAC & CRAH Units
  • Chiller Units
  • Cooling Towers, Condensers & Dry Coolers
  • Economizers & Evaporative Coolers
  • Other Cooling Units
• Cooling Technique
  • Air-Based Cooling Technique
  • Liquid-Based Cooling Technique
• General Construction
  • Core & Shell Development
  • Installation & Commissioning Services
  • Building & Engineering Design
  • Physical Security
  • DCIM/BMS
• Geography
  • North America
    • US
    • Canada
  • Latin America
  • Western Europe
  • Nordics
  • Central & Eastern Europe
  • Middle East & Africa
  • APAC
    • China & Hong Kong
    • Australia & New Zealand
    • India
    • Japan
    • Rest of APAC
  • Southeast Asia