Hyperscale Data Center Market - Global Outlook and Forecast 2020-2025

INDUSTRY INSIGHTS

The global hyperscale data center market size to reach USD 108 billion by 2025, growing at a CAGR of 2% during the forecast period. The global hyperscale data center market is primarily dominated by colocation, internet, and cloud data center service providers. There are also many cloud-based services providers that depend on the construction of facilities by colocation providers to colocate space on a wholesale basis. This will aid cloud providers operating worldwide to establish cloud regions, thereby serving customers quickly and efficiently. In terms of construction, hyperscale operators are investing high capital in the market annually. Also, colocation providers are building hyperscale facilities spanning over 100,000 square feet with a rack power density of up to 50 kW. 

The rapid increase in the spread of COVID-19 in March 2020, across Asian and European countries and the US will result in production and procurement delays till Q2 2020. The construction projects that were expected to be completed between March to June 2020, might be postponed by up to 3 months, depending on the return of the construction workforce to full strength and resumption of full-scale supply chain processes. The pandemic might affect new hyperscale projects that are likely to get underway in the Q2 2020, resulting a declining market scenario for 2020.

SNIPPETS

• The global hyperscale data center market witnessed around 115 new hyperscale facilities through projects opened and under construction in 2019. These projects support a minimum power capacity of 15 MW
• APAC is expected to dominate the market at over $37 billion by 2025. The growth is due to the rise in internet service consumption and data growth.
• Artificial intelligence and machine leaning to increase deployment of direct-to-chip and liquid immersion cooling solutions among data centers.
• The server segment is likely to reach over $48 billion by 2025. The growth is on account of an increases demand for servers with multicore processors and memory storage.
• The cooling systems segment is likely to grow at the CAGR of over 2.5% during the period 2019­–2025.
• The air-based cooling technique segment is projected to grow at the highest CAGR during the period. This growth is on account of increased adoption of evaporative coolers that facilitate partial cooling with indoor CRAC units.
• The India hyperscale data center market is expected to reach approx. $2.5 billion by 2025

HYPERSCALE DATA CENTER MARKET SEGMENTATION

The global hyperscale data center market research report includes a detailed segmentation by

• IT infrastructure
• Electrical infrastructure
• Mechanical infrastructure
• General construction
• Geography

INSIGHTS BY IT INFRASTRUCTURE

The demand for servers suitable for cloud computing environments will continue to grow as service providers expand their presence globally. There will be an increase in demand for servers with multicore processors, and memory will grow as the average number of virtual machines per physical server continues to rise. The US market recorded a growth of around 302% in the server market revenue with the shipment growing at around 40% in 2029. The increase in number of OCP-Ready facility will increase the procurement of ODM infrastructure among enterprise hyperscale data center operators.

Cloud servers are likely to be a major market due to the growing demand for cloud platforms in the region. The trend of adopting blade servers for high-computing infrastructure in Nordic is mostly observed among service. Enterprises in Europe are migrating from traditional HDDs-only systems to all-flash and hybrid unified storage infrastructure. Also, it is witnessed that flash data storage is mainly adopted in IT services and BFSI sectors. The increased deployment of operations related to big data and AI is supported more by flash-enabled storage systems than traditional storage powered by HDDs.

INSIGHTS BY ELECTRICAL INFRASTRUCTURE

Innovations in the OCP community have resulted in the launch of 12VDC UPS. These UPS systems constitute a rack architecture, where one UPS rack supports 6 IT racks in the hyperscale data center environment. The procurement of lithium-ion UPS systems will continue to grow among hyperscale data center operators to reduce the OPEX through low maintenance.

The generators market share will continue to grow because of continuous construction of hyperscale facilities across the globe. Several data centers in North America and the European region, where generators with high redundancy are less required, are established and powered by renewable energy sources.

The use of indirect evaporative coolers and air/water-side economizers will continue to grow in countries that experience cold climatic conditions for a minimum of 5,000 hours per year. Data centers in 

INSIGHTS BY MECHANICAL INFRASTRUCTURE

Southeast Asia, India, the Middle East, and Africa are likely to prefer chilled water systems or a combination of both air and water-based cooling techniques. The use of dual water feeds in facilities with on-site water treatment plants is gaining popularity across hyperscale deployments.

Data centers established in South Western US are incorporated with energy-efficient water-based cooling systems. The on-site water treatment plants that save a minimum of 30% of the water consumed.

The rack size of 45–48U is gaining popularity among hyperscale data center operators. In the global hyperscale data center market, the use of Open Rack Architecture released by Open Compute Projects and Open19 will gain increased traction in the market.

INSIGHTS BY GENERAL CONSTRUCTION

In the US, a majority of states provide tax incentives that includes sales tax, property tax and job-based tax incentives. To attract hyperscale investment, several states are likely to offer tax incentives during the forecast period. In Western Europe, the growing demand for data centers has increased revenue opportunities for multiple contractors and sub-contractors. However, a major challenge for several contractors in the region is the lack of skilled workforces to manage multiple hyperscale data center projects. 

Most projects are built in collaboration with global data center construction contractors and local sub-contractors. China will lead greenfield data center construction compared to Hong Kong, where brownfield developments is popular due to the space shortage during the forecast period.

INSIGHTS BY GEOGRAPHY

The major drivers for the hyperscale data center market growth and demand include rapid advancements in IoT devices, condensed cost of ownership, and the growing number of applications across several sectors. The US is the major market in the North America that is witnessing high growth in the hyperscale data center market. In North America, the development of hyperscale data centers is of Tier III and Tier IV standards.

North America has always been a strong driver for the data center construction market. Multiple hyperscale facilities are being powered by renewable energy sources to overcome issues with power consumption and carbon emission. 

In Europe, Germany continued to dominate the market, with strong contribution from the UK, Denmark, Russia, the Netherlands, Belgium, and Italy. APAC is expected to be the fastest growing market for hyperscale data center with high contribution from China, India, Australia, Singapore, Hong Kong, and India. The market has witnessed the entry of multiple new entrants in the colocation space with plans to build wholesale colocation spaces for hyperscale operators.

INSIGHTS BY VENDORS

The competition among cloud service providers to establish multiple cloud regions and increase the customer base for service offerings is driving the investments in hyperscale data center construction. Also, colocation providers are investing significantly in the hyperscale development, which is increasing the competition among themselves along with several new entrants to the market. The infrastructure data center suppliers market is becoming increasingly competitive YOY. Infrastructure suppliers are innovating their product portfolio to increase their market shares.

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

Segmentation by IT Infrastructure 

• Servers
• Storage
• Network 

By Electrical Infrastructure 

• UPS
• Generators
• Transfer Switches & Switchgears
• Rack PDUs
• Other Electrical Infrastructure 

By Mechanical Infrastructure 

• Cooling Systems
• Racks
• Building Development
• Other Mechanical Infrastructure

By General Construction

• Installation & Commissioning Services
• Building Designs
• Physical Security
• DCIM 

By Geography 

• Americas
  • US
  • Canada
  • Latin America
• EMEA
  • Nordic
  • Middle East and Africa
  • Western Europe
• APAC
  • China & Hong Kong
  • Australia & New Zealand
  • India
  • Southeast Asia
  • Rest of APAC