Global Hyperscale Data Center Market - Outlook and Forecast 2022-2027


Market Overview

The global hyperscale data center market is projected to grow at a compound annual growth rate (CAGR) of over 5% from 2022 to 2027, exceeding USD 175 billion by 2027 compared to USD 126 billion in 2021. This growth can be attributed to the increasing digitalization, technology adoption, and reliance on online operations, making internet availability a top priority. The surge in internet usage has led to a significant increase in data generation, driving the demand for data processing and storage facilities, including data centers. Furthermore, the growing usage of social media and the widespread adoption of technology by businesses have further fueled the need for data centers globally.

In 2021 alone, more than 300 hyperscale data center projects were observed, with contributions from colocation and cloud data center operators across various emerging and mature markets worldwide. Despite the ongoing COVID-19 pandemic, the data center industry continued its growth trajectory, primarily due to the expansion of cloud service providers, content providers, and the migration of on-premises infrastructure to cloud and colocation facilities. This trend has particularly gained momentum in emerging locations such as Chile, Colombia, Saudi Arabia, UAE, Turkey, New Zealand, Belgium, Italy, Thailand, and South Korea.

Product Type

Market Report

No. of Pages

837

Release Date

June 2022

Base Year

2021

Forecast Period

2022-2027

Market Size

USD 127 billion in 2020

Market Segments

IT Infrastructure, Electrical Infrastructure, Mechanical Infrastructure, Cooling Systems, Cooling Technique, General Construction, and Geography

Region

Global

No. of Companies Mentioned

180


Sustainability has emerged as a key focus area in hyperscale data center development, with operators increasingly adopting green energy sources to power their facilities. Given the substantial power consumption of hyperscale data centers, achieving sustainable operations has become imperative.

The adoption of artificial intelligence (AI) worldwide has also had a significant impact on data centers. With organizations and governments embracing AI technologies, data center workloads have experienced substantial growth to support the high-bandwidth data traffic associated with these technologies. Consequently, there is a need for efficient cooling solutions like liquid cooling to accommodate the increasing data center rack density.

Investments in infrastructure automation and the incorporation of AI in data center operations are on the rise. Additionally, the deployment of micro-grids to power data centers has gained traction in the industry. Furthermore, data centers across major locations in the US and Europe have begun trials or implementation of innovative generator designs and alternative fuel types. Examples include the replacement of diesel generators with natural gas-powered systems, hydrogen fuel cells, and hydrotreated vegetable oil (HVO) solutions.

In terms of IT infrastructure, several trends are being observed. These include the adoption of NVMe storage, increased usage of high-capacity switches (100GbE and above), server virtualization, the uptake of ARM-based servers, and the implementation of converged and hyper-converged infrastructure solutions. These trends reflect the ever-evolving nature of the hyperscale data center market as it strives to meet the growing demands of data processing and storage.


Market Segmentation

The market is segmented based on various factors, including IT Infrastructure, Electrical Infrastructure, Mechanical Infrastructure, Cooling Systems, Cooling Technique, General Construction, Geography.

Segmentation by Infrastructure
IT Infrastructure
Electrical Infrastructure
Mechanical Infrastructure
General Construction

Segmentation by IT Infrastructure
Server
Storage
Network

Segmentation by Electrical Infrastructure
UPS Systems
Generators
Transfer Switches & Switchgears
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
Building & Engineering Design
Physical Security
DCIM/BMS

Segmentation by Geography
North America
Latin America
Western Europe
Nordic
Central & Eastern Europe
Middle East & Africa
APAC

Hydrogenated vegetable oil (HVO) has started to replace diesel fuel in European and US data centers. Kao Data Centers, Ark Data Centers, and Interxion (Digital Realty) have already made the switch in their generator systems. In June 2021, Compass Data Center announced a partnership with Foster Fuels to use HVO-based biodiesel as a replacement for diesel fuel.

Air-based cooling techniques are gaining traction due to sustainability concerns, with CRAC and CRAH systems dominating the global hyperscale data center market at a 31% market share in 2021.

Data center operators are increasingly seeking cooling units that are efficient and modular.

The procurement of 45U-48U rack cabinets is expected to increase as the design of OCP-Ready Colocation facilities supporting OCP-Rack Architecture becomes more prevalent.

Supply chain constraints have led to increased costs for data center construction and procurement, averaging $1-$2 million per MW. However, vendors and developers are working on overcoming these challenges through advanced inventory management, pre-planning, and increased market partnerships.

The cost of data center development can vary significantly, ranging from $30-$180 per square foot. China and India have the lowest development costs at around $3-$4 million per MW, while Japan, Singapore, and Switzerland have costs exceeding $10 million per MW. Hyperscale data centers experience a reduction of up to 20% in CAPEX per MW as their capacity grows.

The US and China dominated the hyperscale data center market in 2021, accounting for approximately 40% of the projects. Major companies such as Facebook, Google, Microsoft, AWS, Alibaba, Tencent, and Baidu contributed to this dominance through significant investments.

Brazil and Mexico were the leading markets for hyperscale data center investments in Latin America in 2021. Chile also emerged as a location with investments from colocation operators and the presence of Google and Microsoft.

Spain, Belgium, Norway, Sweden, Poland, Switzerland, Denmark, and Finland have made significant contributions to the European market through the development of large hyperscale data centers.

Hyperscale data center development has been observed in the Middle East, particularly in countries such as Israel, Saudi Arabia, and the UAE. Both colocation operators and global cloud service providers like Google, AWS, and Microsoft have played a role in this growth.

Africa may see future development of hyperscale data centers in Egypt, Kenya, Ethiopia, and Nigeria, but currently, South Africa leads the way with investments from operators like Africa Data Centres, Vantage Data Centers, and Teraco Data Environments.

The APAC region, including Australia, India, Japan, China, Hong Kong, Malaysia, Singapore, and Indonesia, is dominating the hyperscale data center market in terms of investments. Singapore lifted its moratorium on data center construction in 2021, but investments have spread to other Southeast Asian countries such as Indonesia, Malaysia, and Thailand. Over the next five years, Southeast Asia, South Korea, Japan, and India are expected to bring in over $100 billion in hyperscale investments. Additionally, markets in Vietnam, the Philippines, and Taiwan will witness increased activity, and cloud service providers and large technology-based firms will continue expanding capacity in China, India, Japan, South Korea, Australia, and Hong Kong.


Competitive Landscape

Data Center Infrastructure Service Providers
Infrastructure providers are increasingly focusing on efficient and sustainable infrastructure solutions, as this trend gains momentum.
The lead time and procurement costs for various infrastructure solutions are rising due to supply chain constraints.

Data Center Construction Contractors
Across multiple markets, data center construction contractors are grappling with a shortage of skilled workforce.
To facilitate the development of hyperscale data centers, construction contractors are now placing greater emphasis on utilizing recycled materials.

Data Center Investors
In order to expand their investments in hyperscale data centers, several M&A and joint venture initiatives have been observed in the market, particularly from colocation providers. For example, GDS Services has partnered with YTL to construct data centers within YTL’s data center campus in Johor, Malaysia.
Global cloud service providers such as AWS, Microsoft, and Google are investing in hyperscale data centers using a mixed strategy that combines self-built infrastructure and wholesale colocation facilities across multiple countries. This is expected to intensify competition among colocation providers in the market.

Key IT infrastructure providers profiled in this report include Cisco Systems, Dell Technologies, Hewlett Packard Enterprise (HPE), Huawei Technologies, IBM, Inspur, 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, Seagate Technology, Supermicro, Synology, Toshiba, Violin, Western Digital, Wistron (WIWYNN).

Key support infrastructure providers profiled in this report include ABB, Caterpillar, Cummins, Eaton, Legrand, Rittal, Schneider Electric, STULZ, Vertiv Group, Airedale International Air Conditioning, Alfa Laval, Asetek, Assa Abloy, Carrier, Condair, Daikin Applied, Data Aire, Delta Electronics, EAE, Generac Power Systems, Green Revolution Cooling (GRC), HITEC Power Protection, Honeywell International, Johnson Controls, KOHLER, KyotoCooling, Mitsubishi Electric, Munters, Nlyte Software, Panduit, Piller Power Systems, Riello UPS, Rolls-Royce, Siemens, Trane, Yanmar, ZincFive, 3M.

Key construction contractors profiled in this report include AECOM, DPR Construction, Holder Construction, Jacobs, M+W Group, Bouygues construction, Mercury, 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 Architecture, ISG, Kirby Group Engineering, KKCG Group, Laing O’Rourke, Larsen & Toubro (L&T), Linesight, Mace Group, Morrison Hershfield, Mortenson Construction, NTT Facilities, Red, Royal HaskoningDHV, Sterling and Wilson, Structure Tone, Syska Hennessy Group, Turner Construction, Winthrop Engineering and Contracting.

Key data center investors profiled in this report include Apple, AWS (Amazon Web Services), CyrusOne, Digital Realty, Equinix, Facebook (META), Google, Keppel Data Centres, Microsoft, NTT Global Data Centers (NTT Communications), ST Telemedia Global Data Centres, Vantage Data Centers, 21Vianet – (Century Internet Data Center), Africa Data Centres, Bharti Airtel, AirTrunk Operating, Aligned, atNorth, Beyond.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 Group, 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, SUNeVison, Tenglong Holdings Group, Telecom Egypt, T5 Data Centers, Turkcell, Wingu, Yondr, Yotta Infrastructure Solutions.

Key new entrants in the hyperscale data center market profiled in this report include AdaniConneX, Cirrus Data Solutions, Data Center First, Hickory Group, Global Technical Realty, Kevlinx, Novva, Quantum Loophole, Stratus DC Management.


Key Questions Answered

What is the projected value of the global hyperscale data center market in 2027?

The anticipated value for the global hyperscale data center market in 2027 is USD 176.43 billion.

Which region is expected to have the highest market share in the global hyperscale data center market by 2027?

By 2027, North America is predicted to hold the highest market share in the global hyperscale data center market.

What is the estimated market size of hyperscale data centers worldwide in terms of area?

The projected market size for hyperscale data centers in terms of area is 37.74 million square feet by 2027.

Who are the prominent investors in the hyperscale data center market?

Prominent investors in the global hyperscale data center market include Apple, AWS (Amazon Web Services), CyrusOne, Digital Realty, Equinix, Facebook (META), Google, and Microsoft.

What are the primary factors propelling the growth of the hyperscale data center market?

The growth of the hyperscale data center market is primarily driven by factors such as increasing adoption of cloud services, the proliferation of big data and Internet of Things (IoT) technologies, advancements in submarine cable and inland connectivity, as well as growth in mergers and acquisitions (M&A) and joint ventures.

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