The hyperscale data center market is projected to be a strategically vital industry as it provides critically important cloud and IT infrastructure services. Hyperscale data centers are highly scalable server farms designed to provide massive computing capabilities and storage in order to support large technology companies such as Google, Facebook, Microsoft, and others. Hyperscale data centers offer key competitive advantages over traditional models with their highly scalable designs and lower total costs of ownership. These centers house hundreds or thousands of server racks equipped with the latest storage technologies and networking equipment to handle torrents of data originating from cloud computing, internet usage, social media networks and more. The rising global data traffic associated with rapid digital transformation and 5G deployment is fueling growth of hyperscale data centers capable of seamlessly expanding infrastructure on demand.
The Global Hyperscale Data Center Market is estimated to be valued at US$ 87.87 Bn in 2024 and is expected to exhibit a CAGR of 30.9% over the forecast period from 2024 to 2031
Key Takeaways
Key players operating in the hyperscale data center market are Aecom, DPR Construction, Holder Construction, Jacobs, M+W Group (Exyte), Bouygues Construction, Mercury, Arup, and Benthem Crouwel Architects. These companies are engaging in new projects and partnerships to address the rocketing demand from cloud and internet majors. For example, AECOM was awarded a contract by Facebook to design and build a large data center in De Pere, Wisconsin.
The Hyperscale Data Center Market Growth is rising dramatically due to the exponential of data volumes from social media, mobile devices, Internet of Things, digital content, and other applications. According to analysts, global data creation is expected to grow from 33 zettabytes in 2018 to 175 zettabytes by 2025, spurring huge investment in hyperscale infrastructure worldwide.
Hyperscale facilities are pushing technical boundaries with advances such as modular/mobile designs for rapid scalability, liquid cooling systems for higher energy efficiency, use of renewable energy, and strategic site selection. They help companies future-proof their infrastructure needs and support mission-critical workloads with 99.999% availability.
Market Trends
The adoption of edge computing architecture and distributed cloud models is a major trend, driven by the need for Hyperscale Data Center Market Size and Trends capabilities closer to enterprise locations or data source points. The aim is to reduce latency for latency-sensitive applications and workloads.
Sustainability initiatives are also gaining prominence, with hyperscale operators partnering with governments and utilities on renewable energy goals, water recycling, waste management, and green building certifications. This helps lower carbon footprint and energy costs over the long run.
Market Opportunities
The ongoing construction of mega data center campuses by hyperscale firms in strategic global markets like Europe, Asia and South America signals substantial investment potential.
Growing applications of AI, 5G, autonomous driving, and smart cities at hyperscale open new avenues for data center expansion. It is estimated that real-time 5G edge computing alone may require over $4 billion investment in edge data centers by 2026.
Impact of COVID-19 on Hyperscale Data Center Market Growth
The COVID-19 pandemic significantly impacted the hyperscale data center market worldwide. During the pandemic, remote working and online activities increased massively which boosted the demand for data storage, computing power and bandwidth. This led to increased investment in hyperscale facilities by major cloud providers and internet companies to ramp up their capacities. However, initial lockdowns and supply chain disruptions posed challenges as well. Investment decline was reported in 2020 due to delays in construction and commissioning of new data centers.
Post pandemic, demand is steadily recovering across industries as economies reopen and digital transformation accelerates. The market is expected to grow exponentially in the coming years driven by rising hyperscale deployments for cloud, big data analytics and 5G applications. While international data flow and new site selections were hindered during the health crisis, the market is realizing greater geographical diversity in the locations of new data center builds to overcome future disruptions. Sustainability is also gaining increased attention as operators focus on energy-efficient infrastructure and renewable energy integration to power their expanding networks.
North America Hyperscale Data Center Market Growth
North America, especially the United States, has been the primary region for hyperscale data center development owing to significant presence of leading cloud and internet companies. The region accounted for over 35% of the global hyperscale investment prior to the pandemic led by states like Virginia, Oregon and Illinois. With cloud adoption accelerating amid remote work waves, the growth continued post COVID-19 although new projects faced occasional delays. Powered by massive demand for infrastructure from high-performance computing to streaming services, the North American market is expected to remain a major hotspot in the coming years.
Asia Pacific Hyperscale Data Center Growth
Asia Pacific has emerged as the fastest growing regional market for hyperscale facilities in recent times on back of strong digital economies like China, India, Japan and South Korea. The market recorded impressive compound annual growth rate of around 40% during the last five years led by cloud deployments supporting applications from e-commerce to gaming. While construction was paused due to lockdowns, the demand surge during pandemic has further accelerated hyperscale expansion plans of providers across the region. Countries promoting digitalization with favorable policies are attracting major foreign investments, making Asia Pacific an attractive hyperscale investment destination for the future.
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