US Hyperscale Construction Market to reach Over $53 billion


Arizton’s recent market research report on global hyperscale data center market provides comprehensive industry analysis, trend forecasts, and competitive analysis. The study includes insights on the segmentation by IT infrastructure (server, storage, and network), electrical infrastructure (uninterruptible power supply (UPS) systems, generators, rack power distribution units (PDU), transfer switches & switchgears, and other), mechanical infrastructure (cooling systems, racks, and others), general construction (building development, installation and commissioning services building designs, physical security, and Data Center Infrastructure Management (DCIM)), and geography (APAC, MEA, Europe, North America, and Latin America).

The global hyperscale data center market is expected to grow at a CAGR of over 9% during the period 2018−2024.

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The adoption of cloud-based services by enterprises and the increased use of social media by consumers is aiding in the construction of hyperscale data center facilities. The enormous data growth is leading to increased IP traffic in both traditional and cloud data centers. It is expected that 85−90% of facilities will be cloud-based by 2023 as most B2B and B2C services will be offered via the cloud platform. The internet penetration in countries such as the US and Canada is growing at an annual rate of 1%, whereas the same is growing about 5% annually in Latin American countries. This rate is likely to increase further as the adoption of smartphones and handheld connected devices is growing, thereby increasing the data consumption rate. The growth of social media is another major factor for the rise of hyperscale data center facilities, and this is likely to continue during the forecast period.

The global hyperscale market is segmented into IT infrastructure, electrical infrastructure, mechanical infrastructure, general construction, and geography.

US leads Hyperscale Data Center Market

The US leads the hyperscale development list. Several colocation providers are rapidly expanding in the country in the last few years. In the US, around 18 data center facilities that were opened or under construction in 2018, will comprise over 25 MW of IT load capacity on full-build. The increased power consumption and the rise in carbon emission levels have driven hyperscale data center facilities to install energy-efficient infrastructure and procure renewable energy sources. Facility operators like Equinix, Digital Realty, Amazon, Google, Apple, and Microsoft have a strong commitment to investing in renewable energy.

In December 2018, Apple announced its plan to invest $10 billion in data centers across the US in the next five years.

Google also announced $13 billion in investment for offices and data centers in the US during the forecast period.

Facebook is expected to open at least 25 facilities in the US during 2018−2023.

In 2018, Facebook developed five data center facilities across the US, covering an area of around 2.3 million square feet. Also, Digital Realty recently opened four facilities across the country, which covers an area of around 900,000 square feet. In addition, the entry of new entrants such as PointOne, EdgeCore, Giga Data Center, and Archer Datacenters to develop hyperscale data center facilities is the growing demand for cloud-based service providers.

Nordic to emerge preferable Location for Hyperscale Investment

The data center market in Nordic is a rapidly growing market with multiple hyperscale operators, enterprises are the major investors in Nordic region, with Denmark is the most preferred location. The reason behind the popularity of this country is the availability of renewable resources. The European Union reached a share of 17.52% of renewable energy in gross final energy consumption, countries such Norway, Denmark, Sweden, Finland are the top renewable energy production countries. The availability of renewable energy sources to power data centers is a major attraction for developers to establish facilities in the Nordic region. Almost all facilities in the Nordic region are powered by renewable energy sources. Hyperscale operators and colocation providers are establishing data centers in the Nordic region to reduce the cost of electricity and operate facilities with minimal carbon emission. Renewable energy sources in the Nordic region are contributed by hydro and wind power. Apple, Facebook and Google are the leading investors in the region. 

China and India to dominate Hyperscale Development in APAC

The hyperscale data center facilities in the APAC region is witnessing steady growth with continued investments from colocation and cloud service providers such as AWS, Microsoft, Google, and Alibaba. There are also multiple global SaaS providers entering the market in the APAC region by constructing facilities or colocating with above-mentioned service providers. In each country, local colocation providers are also expanding their presence with the construction of additional facilities, which is propelling market growth. China and Hong Kong dominate the APAC hyperscale data center market; however, Singapore, Australia, India, and Japan are other locations. Digital Realty, ST Telemedia, Singtel, Keppel DC, Global Switch, GDS Services, NTT Communication, CtrlS, VADS BERHAD, and NextDC are the main colocation data center investors in the APAC region. New entrants such as Chayora (China) are likely to add a sizable contribution to the market during the forecast period.

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Apple, Amazon Web Services (AWS), Alibaba, Facebook, Google, Microsoft, NTT Communications, OVH, and Tencent are key and prominent vendors in the global hyperscale data center market.

The complete overview of the latest market research report on the global hyperscale data center market by Arizton is now available.

The report offers a detailed study of major trends, drivers, challenges and provides market sizing and forecast for major geographical regions and key countries.

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