The global hyperscale data center market was valued at USD 139.11 billion in 2022 and is expected to grow at a CAGR of 5.92% from 2022-2028.
KEY HIGHLIGHTS
The rise in coverage of 5G and its deployment in various regions will attract more hyperscale data center investment across the countries globally. The use of cloud computing services and applications will continue to grow, leading to the development of large hyperscale cloud-based data centers.
Governments worldwide offer incentives to attract data center investments in their countries. For instance, in the U.S., states like Virginia and Washington, DC, have seen an increase in data centers due to federal tax incentives. In Latin America, Mexico's special economic zones offer benefits like corporate tax exemptions and import/export tax exemptions. Further, the Netherlands provides tax benefits for sustainable data center investments in the European region, including renewable energy sources, cooling towers, UPS systems, and fans. The Energy Investment Deduction (EIA) program allows for up to 55% tax-free investment cost, while the Environment Investment Deduction (MIA) program can save 13%-36% for eco-friendly data centers.
Globally, major hyperscale data center market companies are prioritizing using renewable energy as their primary power source. For example, in November 2022, Google entered into a power purchase agreement (PPA) for 942 megawatts of solar power from projects in development in Texas.
Most operators in the global hyperscale data center market primarily employ free cooling solutions, and there is also a growing trend in data centers toward adopting waterless cooling systems that use free cooling chillers and indoor CRAC units.
The hyperscale data center market is likely to witness the entry of new players. For instance, Form8tion Data Centers, a new entrant in the European market formed by Thor Equities, commenced the construction of a new data center in Madrid, Spain. The operator claims its facilities will use HVO for generators and renewable energy to power the data center.
SEGMENTATION ANALYSIS
Segmentation by Infrastructure
IT Infrastructure
Electrical Infrastructure
Mechanical Infrastructure
General Construction
Segmentation by IT Infrastructure
Server Infrastructure
Storage Infrastructure
Network Infrastructure
Segmentation by Electrical Infrastructure
UPS Systems
Generators
Transfer Switches & Switchgear
PDUs
Other Electrical Infrastructure
Segmentation by Mechanical Infrastructure
Cooling Systems
Racks
Other Mechanical Infrastructure
Segmentation by Cooling System
CRAC & CRAH Units
Chiller Units
Cooling Towers, Condensers & Dry Coolers
Economizers & Evaporative Coolers
Other Cooling Units
Segmentation by Cooling Technique
Air-based Cooling Technique
Liquid-based Cooling Technique
Segmentation by General Construction
Core & Shell Development
Installation & Commissioning Services
Engineering & Building Design
Fire Detection & Suppression
Physical Security
DCIM/BMS Solutions
Segmentation by Tier Standards
Tier I & Tier II
Tier III
Tier IV
MARKET TRENDS & OPPORTUNITIES
Rising Procurement of Artificial Intelligence
The growing adoption of artificial intelligence (AI) is significantly increasing the need for hyperscale data centers. AI applications, especially those involving machine learning and deep learning, require extensive computing resources and storage. Hyperscale data centers, known for their vast storage capacity and powerful computing capabilities, provide the optimal infrastructure for efficiently handling the enormous data volumes essential for AI training and processing. Additionally, these data centers can quickly adapt to accommodate the fluctuating workloads associated with AI, playing a pivotal role in supporting the ongoing expansion and success of AI-driven technologies. Also, Google uses AI to save energy in its data centers. AI controls cooling based on temperature and humidity, which has cut energy use by 30%.
Growing Procurement of Big Data and IoT Solutions
Over time, the increase in internet speed and the growing number of users have led to a significant increase in data and the widespread use of social media. Various industries such as healthcare, banking and finance, education, and hospitality are experiencing data growth due to advancements in technology and digital transformation initiatives. For instance, In February 2022, T-Mobile, in partnership with Deutsche Telekom, announced the launch of a new solution, T-IoT, which will provide enterprises with simplified global IoT connectivity.
Automation & Intelligent Monitoring Solutions
Data center automation solutions can identify the maintenance requirements of generator systems to avoid operational failure and backup power failure during outages. The regular maintenance of generators over some time is essential since the diesel inside these systems can become polluted and affect the proper function of the systems when they are required the most. Vendors such as Carrier, Data Aire, and Menerga offer remote monitoring solutions for cooling infrastructure.
Sustainable and Innovative Data Center Technologies
The data center market has seen many changes and improvements over time. Data center operators are working to make their facilities operate more efficiently. They are also upgrading their centers by replacing old technologies with newer ones. Furthermore, operators in the hyperscale data center market are paying more attention to reducing the environmental impact, specifically carbon emissions, from their data centers. For instance, in September 2022, Equinix, in partnership with the National University of Singapore, announced its plan to test hydrogen-powered fuel cells as a source of power for its data centers in Singapore.
GEOGRAPHICAL ANALYSIS
Hyperscale Activity Dominated by North America and APAC Persists
In 2022, North America and APAC witnessed high growth of hyperscale data center investments, collectively accounting for approximately 75% of all projects. North America saw substantial investments from tech giants like Facebook, Google, Microsoft, and AWS, pouring billions of dollars into hyperscale data center development. Meanwhile, in APAC, the surge in the hyperscale data center market was driven by the likes of Alibaba, Tencent, Baidu, Microsoft, ByteDance, AWS, VIVO, China Electronics, IQIYI, China Mobile, Bilibili, and more.
European Hyperscale Growth in Multiple Nations
The hyperscale activity within the FLAP-D (Frankfurt, London, Amsterdam, Paris, and Dublin) market saw significant expansion in 2022, with colocation operators focusing on facilities exceeding 20 MW. Additionally, countries such as Spain, Belgium, Norway, Sweden, Poland, Switzerland, Denmark, and Finland saw a notable uptick in hyperscale data center investments through colocation and self-built facilities. Global and local operators' expansion efforts across Europe have been steadily on the rise.
Hyperscale Expansion Takes Hold in the Middle East
The hyperscale data center market development gained momentum in the Middle East, encompassing countries like Israel, Saudi Arabia, and the UAE. Colocation operators and the entry of global cloud service providers like Google, AWS, and Microsoft fueled this growth.
The Future of Hyperscale Data Centers in Africa
In Africa, South Africa continued to lead the hyperscale data center market in 2022, with investments from operators such as Africa Data Centres, Vantage Data Centers, and Teraco Data Environments (Digital Realty). Other areas, such as Egypt, Kenya, Ethiopia, and Nigeria, are also expected to emerge as the following destinations for hyperscale data center development on the continent.
APAC Set for Higher Hyperscale Investments
The Asia-Pacific (APAC) region is poised for explosive growth in the hyperscale data center market during the forecast period. Notably, Southeast Asia, South Korea, Japan, and India are anticipated to play a pivotal role in this surge. Significant contributors include Australia, India, Japan, China, Hong Kong, Malaysia, Singapore, and Indonesia. Although Singapore lifted its moratorium on data center construction in 2021, the focus of hyperscale investments has shifted to other Southeast Asian countries such as Indonesia, Malaysia, and Thailand. The coming years will witness an uptick in hyperscale activity in markets like Vietnam, the Philippines, and Taiwan, alongside ongoing growth in China, India, Japan, South Korea, Australia, and Hong Kong, driven by capacity expansion efforts by cloud service providers and tech giants.
Segmentation by Geography
North America
The U.S.
Canada
Latin America
Chile
Brazil
Mexico
Western Europe
The U.K.
Germany
France
Netherlands
Ireland
Spain
Other Western European Countries
Nordics
Denmark
Sweden
Norway
Finland
Central & Eastern Europe
Poland
Other Central & Eastern European Countries
Middle East
UAE
Saudi Arabia
Israel
Africa
South Africa
Other African Countries
APAC
China
Hong Kong
Australia
New Zealand
India
Japan
South Korea
Singapore
Malaysia
Thailand
Indonesia
Philippines
VENDOR LANDSCAPE
Vendors' Advancements and Challenges in the Data Center Market
In response to a growing trend, companies that provide data center infrastructure services are increasingly adopting environmentally friendly and efficient solutions. However, they are facing challenges such as supply chain issues, which are causing delays and higher procurement costs. On the construction side, companies building data centers are having trouble finding skilled workers, so they are focusing more on using recycled materials for big projects. In terms of investments, companies that offer colocation services are partnering with each other through mergers and joint ventures to expand. For example, GDS Services is teaming up with YTL to build data centers in Malaysia. At the same time, major global cloud providers like AWS, Microsoft, and Google are making significant investments in large-scale data centers. They are doing this by building their facilities and renting space from colocation providers in multiple countries. This increase in activity is making the competition among colocation providers in the market more intense.
Key Data Center IT Infrastructure Providers
Cisco Systems
Dell Technologies
Hewlett Packard Enterprise (HPE)
Huawei Technologies
IBM
Inspur
Other Prominent IT Infrastructure Providers
Arista Networks
ATOS
Broadcom
Juniper Networks
Lenovo
NetApp
Extreme Networks
Fujitsu
Hitachi Vantara
Inventec
Micron Technology
Mitac Holdings
NIMBUS Data
Oracle
Pivot3
Pure Storage
Quanta Cloud Technology (Quanta Computer)
Seagate Technology
Supermicro
Synology
Toshiba
Violin (StorCentric)
Western Digital
Wistron (WIWYNN)
Key Data Center Support Infrastructure Providers
ABB
Caterpillar
Cummins
Delta Electronics
Eaton
Legrand
Rolls-Royce
Schneider Electric
STULZ
Vertiv
Other Data Center Support Infrastructure Providers
Airedale
Alfa Laval
Asetek
Assa Abloy
Bloom Energy
Carrier
Condair
Cormant
Cyber Power Systems
Daikin Applied
Data Aire
Delta Electronics
EAE
Enlogic
FNT Software
Generac Power Systems
Green Revolution Cooling (GRC)
HITEC Power Protection
Honeywell International
Johnson Controls
KOHLER
KyotoCooling
Mitsubishi Electric
Munters
Nlyte Software (Carrier)
Natron Energy
NetZoom
Panduit
Piller Power Systems
Riello Elettronica (Riello UPS)
Siemens
Trane (Ingersoll Rand)
Tripp Lite
Yanmar (HIMOINSA)
ZincFive
3M
Key Data Center Contractors
AECOM
DPR Construction
Holder Construction
Jacobs
M+W Group (Exyte)
Bouygues Construction
Mercury
Other Data Center Contractors
Arup
Aurecon Group
BENTHEM CROUWEL ARCHITECTS
Cap Ingelec
Corgan
DAR Group
Deerns
DSCO Group
Edarat Group
Faithful+Gould
Fluor Corporation
Fortis Construction
Gensler
Gilbane Building Company
HDR
ISG
Kirby Group Engineering
KKCG Group
Laing O'Rourke
Larsen & Toubro (L&T)
Linesight
Mace
Morrison Hershfield
Mortenson
NTT Facilities
Red
Royal HaskoningDHV
Sterling and Wilson (Shapoorji Pallonji Group)
STO Building Group
Syska Hennessy Group
Turner Construction
Winthrop Engineering and Contracting
Key Data Center Investors
Apple
Amazon Web Services (AWS)
CyrusOne
Digital Realty
Equinix
Facebook (META)
Google
Keppel Data Centres
Microsoft
NTT Global Data Centers
ST Telemedia Global Data Centres
Vantage Data Centers
Other Data Center Investors
21Vianet
Africa Data Centres
Bharti Airtel (Nxtra Data)
AirTrunk Operating
Aligned
atNorth (Partners Group)
pl
Big Data Exchange
Bridge Data Centres
Canberra Data Centers
Chayora
Chindata
CloudHQ
ClusterPower
Cologix
Compass Datacenters
COPT Data Center Solutions
CoreSite Realty
DataBank
DATA4
DigiPlex (IPI Partners)
EdgeConneX
Etisalat
Flexential
GDS Services
Global Switch
Green Mountain
Gulf Data Hub
HostDime
InterNexa
Iron Mountain
IXAfrica
IXcellerate
Moro Hub
NEXTDC
ODATA
Ooredoo
Orange Business Services
Paratus Namibia
QTS Realty Trust
Raxio Group
Rostelecom Data Centers
Scala Data Centers
Sify Technologies
SUNeVision (iAdvantage)
Tenglong Holdings Group
Telecom Egypt
T5 Data Centers
Turkcell
Wingu
Yondr
Yotta Infrastructure Solutions
New Data Center Investors
AdaniConneX
Cirrus Data Solutions
Data Center First
Hickory Group
Global Technical Realty
Kevlinx
Novva
Quantum Loophole
Stratus DC Management
KEY QUESTIONS ANSWERED:
1. How big is the hyperscale data center market?
2. What is the growth rate of the global hyperscale data center market?
3. What is the estimated market size in terms of area in the global hyperscale data center market by 2028?
4. Who are the key IT infrastructure providers in the global hyperscale data center market?
5. How many MW of power capacity is expected to reach the global hyperscale data center market by 2028?
TABLE OF CONTENTS
1. REPORT COVERAGE
1.1. WHAT'S INCLUDED
1.2. SEGMENTAL COVERAGE
1.2.1. Market Segmentation by Infrastructure
1.2.2. Market Segmentation by IT Infrastructure
1.2.3. Market Segmentation by Electrical Infrastructure
1.2.4. Market Segmentation by Mechanical Infrastructure
1.2.5. Market Segmentation by Cooling System
1.2.6. Market Segmentation by Cooling Techniques
1.2.7. Market Segmentation by General Construction
1.2.8. Market Segmentation by Tier Standards
2. PREMIUM INSIGHTS
2.1. MARKET HIGHLIGHTS
2.2. MARKET TRENDS & OPPORTUNITIES
2.3. REGIONAL ANALYSIS
2.4. VENDOR LANDSCAPE
3. MARKET OPPORTUNITIES & TRENDS
3.1. RISING ADOPTION OF ARTIFICIAL INTELLIGENCE
3.2. GROWING PROCUREMENT OF BIG DATA & IOT SOLUTIONS