UNITED STATES DATA CENTER MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

United States Data Center Market Size and Trends

The United States data center market is estimated to be valued at USD 36,504.3 Mn in 2024 and is expected to reach USD 93,376.4 Mn by 2031, exhibiting a compound annual growth rate (CAGR) of 14.4% from 2024 to 2031.

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The growth of the data center market in the United States can be attributed to the rising adoption of cloud computing services among enterprises of all sizes. Businesses are migrating to cloud infrastructure to benefit from advantages such as scalability, flexibility, and lower capital expenditures. Additionally, the growing importance of technologies such as big data analytics, IoT, Blockchain, and artificial intelligence is generating massive volumes of data, which is fueling the need for large data centers with high processing and storage capacity. Other factors such as an increase in mobile data usage and deployment of 5G networks will also contribute to the strong demand for data center infrastructure in the country over the coming years.

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Insights By Component: Hardware Dominates Due to its Importance in Data Transfer and Storage

In the terms of component, the hardware segment is estimated to hold the highest share of the market, accounting for 46.3% in 2024 due to its critical role in data transfer and storage infrastructure. Hardware forms the backbone of any data center, carrying out essential functions like networking, computing, and data storage. Key hardware components driving the hardware segment include routers, switches, cables, and others.

Insights By Application: Network Infrastructure Dominates Due to the Importance of Connectivity

In the terms of application, the network infrastructure segment is estimated to hold the highest share of the market, accounting for 39.4% in 2024 owing to its importance in enabling interconnectivity. At its core, a data center exists to facilitate the movement and sharing of data between vast networks of users, applications, servers and devices. Robust network infrastructure forms the foundation upon which this connectivity is built.

Insights By End User: BFSI Dominates Due to Large-Scale Digital Transformations

In the terms of end user, the BFSI segment is estimated to hold the highest share of the market, accounting for 32.4% in 2024 owing to its ambitious large-scale digital transformation programs. The banking, financial services, and insurance sector handles immense volumes of sensitive customer and transactional data, making robust and secure data management infrastructure a top priority.

Market Concentration and Competitive Landscape

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Top Strategies Followed by the United States Data Center Market Players

Established data center operators in the U.S. focus heavily on research and development activities to deliver cutting-edge infrastructure solutions. Companies like Equinix, Digital Realty, and CyrusOne invest over 10% of their annual revenues in R&D to innovate new designs for servers, storage, networking products and facility management systems. They also pursue strategic alliances with technology leaders like Cisco, Juniper, and Intel to gain early access to emerging technologies. Additionally, major players have expanded their presence across multiple U.S. cities and over 15 other countries to cater to the global clientele.

Mid-sized operators stand out by offering highly customizable and cost-optimized infrastructure packages. For example, CoreSite delivers flexibility through its fit-out solutions allowing clients to modify spaces based on evolving needs. Vantage Data Centers provides pay-as-you-go pricing models making colocation affordable for small and mid-sized firms

Emerging Startups in the United States Data Center Market

Many startups are pioneering the use of technologies like liquid cooling, battery energy storage, and artificial intelligence in data center design and management. Anthropic develops cognitive solutions to automate facility functions like capacity planning, asset management, and anomaly detection through machine learning. Other examples are GreenEdge which utilizes lithium-ion batteries and renewables for backup power and Submer which submerges servers underwater for enhanced cooling.

Sustainable startups like Puget, TerraPass, and Recurrent focus on building climate-neutral facilities powered entirely by renewable energy. Puget plans to establish a zero-carbon data center in Washington using on-site solar and wind. Recurrent reuses waste heat from servers to provide heat and hot water for nearby communities. Their innovative approaches can help major data center hubs like Silicon Valley achieve their environmental commitments.

Several startups fill critical niches in high-growth market segments. CacheNetworks provides colocation exclusively for cryptocurrency mining companies addressing their unique power and scalability needs. LiquidStack designs purpose-built quarters optimized for AI workload requirements with direct-to-chip liquid immersion cooling capabilities. 

United States Data Center Industry News

In January 2024, NTT added a new records center in India. The facility is neutral to carriers, connected with NTT's other facts center sites to lessen delays, and offers easy connections to leading public cloud carriers.

In July 2023, Akamai Technologies Inc. revealed the inauguration of three fresh cloud records middle facilities in Paris, Washington, D.C., and Chicago, accompanied with the aid of locations in Seattle, U.S. and Chennai, India. Alongside those additions, Akamai greater its cloud infrastructure by means of introducing new premium example kinds.

In August 2022, Microsoft declared the outlet of its state-of-the-art datacenter area in Qatar. This represented a full-size fulfillment because the number one hyperscale cloud company to supply pinnacle-tier offerings inside the state. These modern information centers at the moment are operational, imparting Microsoft Azure and Microsoft 365 offerings to clients.

Key Takeaways from Analyst

The data center market in the United States is expected to continue expanding over the next five years. Rising generation of data due to an increasing number of connected devices is a key driver fueling growth in this market. Furthermore, rapid adoption of cloud computing and outsourcing of data center services are prompting enterprises to expand their existing infrastructure or construct new data centers. Hyperscale cloud providers such as Amazon Web Services, Microsoft Azure, and Google Cloud Platform are aggressively investing in this market. However, factors such as high initial capital expenditures pose a challenge to market growth. The COVID-19 pandemic also disrupted on-site operations and construction of new data center buildings last year. Among regions, the West and Southwest parts of the U.S. dominated the market in 2020 due to the availability of cheap lands and stable power supply. Going forward, the South-Central region is expected to attract more investment since states like Texas offer tax and cost advantages to hyperscale data center operators.

Market Report Scope

Market Dynamics

Market Driver - Implementation of New Technologies

The data center market in the United States is witnessing marked changes owing to the widespread adoption of newer and advanced technologies across various industries. Technologies such as artificial intelligence, machine learning, internet of things, 5G networks, and edge computing are being increasingly utilized by organizations to gain operational efficiencies and deliver enhanced customer experiences. However, successful deployment of these cutting-edge solutions requires modernized infrastructure equipped to handle the specialized computing and storage demands of such workloads.

Market Restraints - Regulatory Compliance

One of the major challenges facing the United States data center market is regulatory compliance. As data privacy laws like CCPA, GDPR, and state data breach notification laws become more stringent, companies processing large volumes of customer data must ensure their data center infrastructure and operations adhere to these regulations. Protected health information, financial records, and personally identifiable information all impose additional compliance requirements that traditional data centers may struggle to meet. Demonstrating compliance can require extensive review and auditing of facilities, hardware, network security practices, and user access controls. A 2022 survey by the International Facilities Management Association found that over 60% of data center operators reported compliance as a top challenge diverting investments from infrastructure expansion plans.

Market Opportunity - Adoption of Advanced IT Solutions Across Industries

One of the biggest opportunities for the United States data center market lies in the adoption of advanced IT solutions across various industries. As technologies like AI, machine learning, IoT, Blockchain, and edge computing gain ground, organizations are facing massive data processing requirements that exceed the capabilities of traditional on-premise infrastructure. This is driving the demand for scalable, high-performance data center colocation and cloud services. As per estimates from the National Telecommunications and Information Administration, the IT load including analytics at the network edge is expected to increase more than three-fold between 2020 to 2023.

Market Segmentation

•  Component Insights (Revenue, USD, 2019 - 2031)
• • Hardware
  • Routers
  • Switches
  • Cables
  • Others
  • Software
  • Services
•  Application Insights (Revenue, USD, 2019 - 2031)
• • Network Infrastructure
  • Servers
  • Storage
•  End User Insights (Revenue, USD, 2019 - 2031)
• • BFSI
  • Healthcare
  • IT & Telecom
  • Retail & Consumer Goods
  • Energy & Utilities
  • Government & Public Sector
  • Others
• Key Players Insights
• • Amazon Web Services (AWS)
  • Microsoft Azure
  • Google Cloud Platform
  • Equinix
  • Digital Realty
  • CyrusOne
  • CoreSite Realty Corporation
  • IBM
  • Facebook (Meta)
  • Alibaba Cloud