HYPERSCALE DATA CENTER MARKET ANALYSIS

The global hyperscale data center market size was valued at US$ 87.87 billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 30.9% from 2022 to 2030.  The massive volume of data that is generated by businesses and individuals today is one of the major drivers driving the hyperscale data center market.  The hyperscale data center market is expected to continue growing in the future as businesses expand their capacity and need to manage more data. The increasing use of managed services in enterprise IT environments is also driving the market growth.

Global Hyperscale Data Center Market: Regional Insights

North America is projected to show strong growth in the global hyperscale data center market over the forecast period. The growth of this can be attributed to presence of major companies such as SanDisk Corporation, Cisco Systems, Inc. in the region. Among with this, rise in large firms with their global expansion through collaborations and product launch is also driving growth of the market in this region.

Furthermore, Europe is also anticipated to gain promising growth in the global hyperscale data center market over the forecast period, owing to rise in adoption of cloud services, and growing need for high-performance computing as well as storage infrastructure in the region. Moreover, the stringent regulations regarding data protection needing businesses to store the data within the European Union. Thus, demand for hyperscale data centers is high in the region, which in turn is driving growth of the market.

Figure 1: Global Electric Tile Cutter Market Share (%), 2022: Regional Insights

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Global Hyperscale Data Center Market Drivers:

Increase in adoption of cloud services to boost market growth

Large organizations around the world are increasingly inclining towards cloud solutions for organizing the work on cloud platforms. Different business sectors such as IT & Telecommunication, BFSI, consumer goods & retail, government, manufacturing, and healthcare are adopting cloud computing. In IT sector the adoption of cloud computing is growing for management and storing data. Thus, the demand for hyperscale data center in turn is likely to increase in the coming future, which is expected to propel growth of the global hyperscale data center market over the forecast period.

Rise in adoption of Big Data & IoT to fuel the market pace

Growing speed of internet along with rising number of internet users is leading to large amount of data being produced and growing penetration of social media with time. Many industries such as BFSI, healthcare, hospitality, and education are witnessing rise in amount of data generated, owing to technological developments as well as initiatives of digital transformation. Moreover, the fast development of data traffic can be attributed to the Internet of Things (IoT). These factors are therefore driving the need for hyperscale data centers. Thus, the market is anticipated to show substantial growth in the near future.

Global Hyperscale Data Center Market Opportunities:

Rise in adoption of Artificial Intelligence on data center infrastructure to create substantial growth opportunities in the global hyperscale data center infrastructure market over the forecast period. Several countries around the world have begun to adopt AI for various operations. Liquid cooling is the highly adopted cooling technology utilized in High-Performance Computing (HPC) in data centers for supporting AI and ML workloads. As a result, with increasing adoption of AI in data center infrastructure, the market is anticipated to witness various opportunities.

Increasing growth of rack power density is expected to produce business opportunities in the global hyperscale data center market over the forecast period. In data center designing, capacity planning, as well as cooling and power provisioning, the rack power density is one of the most important factors. The rack power density in IT equipment has increased in past few years. Due to rise in adoption of AI, Augmented and Virtual Reality, and IoT, which are compute-intensive workloads and rise in trend of cryptocurrency mining, the data storage and processing needs are growing. This in turn is creating multiple opportunities in the global hyperscale data center market during the forecast period.

Global Hyperscale Data Center Market Trends:

Rising adoption of renewable energy is a growing trend

The number of colocation and hyperscale data centers is increasing with time. However, along with this, the consumption of energy in data centers has also increased majorly leading to carbon emissions. Thus, government of countries around the world are focused on initiatives to control the emissions and consumption of power by data centers through adoption of renewable energy. This trend is likely to support growth of the global hyperscale data center market during the forecast period.

Increasing deployment of 5G for edge data centers is another trend in the market

Data center development is mostly growing in prominent cities around the world, while it is still in the initial stages in cities that are tier II and tier III. With increasing adoption of novel technologies in smaller regions based away from major locations is growing in terms of deploying edge data center. The importance of edge data centers has increased along with emergence of 5G networks around the world. Many countries around the world are deploying 5G services. This trend is expected to continue in the global hyperscale data center market over the forecast period.

Global Hyperscale Data Center Market Restraints:

Rise in carbon emissions to limit the market growth

As the complexity of data centers increases, the energy efficiency of these data centers will grow causing high emissions of carbon. Furthermore, the demand for data centers is increasing owing to rise in cloud-based computing and IoT, which also leads to rise in carbon emissions. The carbon emissions from data centers account for nearly 0.3% of the global carbon emissions. Thus, this factor is expected to hinder growth of the global hyperscale data center market over the forecast period. However, adoption of renewable energy by data center operators is likely to aid in growth of the market.

Security concerns of data centers to impede the market growth

The security threats have worsened over time with rise in use of technology for simplifying and speeding up the service offerings. The data center security is classified in two types, physical and logical security. Physical security consists of protecting data center assets from physical damage and logical security involves securing or protecting IT infrastructure from cyber-attacks. With increasing adoption of data centers, the rate of cyber-attacks are increasing all over the world. This in turn is hindering growth of the global hyperscale data center market over the forecast period.

Figure 2: Global Electric Tile Cutter Market Share (%), By IT Infrastructure, 2022

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Global Hyperscale Data Center Market Segmentation:

The global hyperscale data center market report is segmented into IT Infrastructure, Electric Infrastructure, Mechanical Infrastructure, and General Construction.

Based on IT Infrastructure, the market is segmented into Server Infrastructure, Storage Infrastructure, and Network Infrastructure. Out of which, Server Infrastructure is expected to dominate the global market over the forecast period and this is attributed to the constant innovations by market vendors driving the adoption of various infrastructure components for server infrastructures. Modern server systems come with internal storage components that can be equipped with SSDs or HDDs or even both. These infrastructures have various advantages, and with increasing innovations adoption of server infrastructure is increasing, which is expected to propel growth of the segment.

Storage Systems segment is also expected to witness significant growth in the near future and this is owing to the growing competition in the businesses leading to rise in adoption of big data analytics. The adoption or building of technologies continues to be competitive in various industry verticals such as healthcare, BFSI, Transportation and logistics, heavy industries, and education. This is further driving the adoption of storage systems in order to offer the best service to end users. Thus, the segment is likely to gain substantial growth in the coming future.

Based on Electric Infrastructure, the market is segmented into UPS Systems, Generators, Transfer Switches & Switchgears, Power Distribution Units, and Other Electrical Infrastructure. Out of which, UPS Systems is expected to dominate the global market over the forecast period and this is attributed to the rise in adoption of VRLA battery-powered systems that are being complemented by the procurement of lithium-ion batteries. Vendors are introducing various UPS solutions, which is further driving adoption of these systems. This in turn is likely to aid in growth of this segment.

Generators segment is also expected to witness significant growth in the near future and this is owing to the rise in construction of hyperscale and large data center facilities. Data center generators having over 2MW capacity are witnessing high adoption. Moreover, several data center operators are adopting cleaner energy and efficient data center generators, which is driving growth of this segment in the market.

Based on Mechanical Infrastructure, the market is segmented into Cooling Systems, (CRAC & CRAH Units,  Chiller Units, Cooling Towers, Condensers and Dry Coolers,  Economizers & Evaporative Coolers, Other Cooling Units), Racks, Other Mechanical Infrastructure. Out of which, Cooling Systems is expected to dominate the global market over the forecast period and this is attributed to the increasing innovations in cooling systems for improved operational efficiency and decreasing consumption of power in hyperscale data center facilities. The demand for cooling systems is thus increasing all over the world, which is expected to support growth of this segment.

Racks segment is also expected to witness significant growth in the near future and this is owing to the increasing adoption of racks. Racks can be customized to offer dual power delivery. The adoption of racks in data centers depends mostly on the needs of IT infrastructure. With increasing innovations in IT infrastructures, the demand for racks is increasing in data centers, which is further fueling growth of this segment.

Based on General Construction, the market is segmented into Core & Shell Development, Installation & Commissioning Services, Engineering & Building Design, Fire Detection and Suppression, Physical Security, DCIM/BMS Solutions. Out of which, Core & Shell Development is expected to dominate the global market over the forecast period and this is attributed to the many benefits of core and shell development method for the construction process. This method speeds up the design and build process in general by defining the core and shell elements of the building first, with the fittings (what goes inside) to be determined at a later point. This allows progress to be made in the construction of other portions of the building while long-lead items for the core and shell are being designed, saving the project time and money.

Installation & Commissioning Services segment is also expected to witness significant growth in the near future and this is owing to the increased need for accurate measurement to ensure the proper function and performance of installed equipment, with the emergence of new data center sites. The installation and commissioning of data acquisition systems requires specialized expertise. It also requires detailed planning and scheduling. The demand for this segment is growing, which in turn is expected to drive growth of the market in the near future.

Global Hyperscale Data Center Market: Key Developments

In November 2022, Big Data Exchange along with PT Aplikanusa Lintasarta, and PT Indosat Tbk revealed that they will be building a new 100MW data center complex, CGK5 on 12 acres land, located in Jarawang, West Java, being the third availability zone of the company.

In March 2022, Yondr Group a leading data centers service provider, owner-operator, and developer will be expanding into the market of Malaysia with 200MW hyperscale campus, which will be developed on 72.8 acres of land.

In January 2023, Bharti Airtel Group, a telecom giant in India in collaboration with the state government of Telangana announced to invest Rs 2, 000 crore for setting up a huge hyperscale data center in Hyderabad, Telangana.

In April 2023, Colt Data Center Services, a leader in large enterprise data center and global hyperscale solutions announced that the construction of its fourth data center in Inzai, Japan has begun. This region is the most competitive regions of data center real estates for research, enterprise, and technology consumers.

Global Hyperscale Data Center Market: Key Companies Insights

The global hyperscale data center market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis. Some of the key players in the global hyperscale data center market are Aecom, DPR Construction, Holder Construction, Jacobs, M+W Group (Exyte), Bouygues Construction, Mercury, Arup, and Benthem Crouwel Architects

*Definition: Hyperscale data centers are massive, centralized facilities operated by large technology companies. They support a wide range of services from cloud computing to big data analytics and storage. They also require enormous amounts of electrical power to run their servers and cooling systems.