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The global hyperscale data center market was valued at US$ 107.8 billion in 2022 and is expected to reach US$ 146.9 billion by 2031, growing at a CAGR of 3.5% during the forecast period, 2023–2031.
The global hyperscale data center market is characterized by the dominance of colocation providers, followed closely by internet and cloud service providers. Cloud-based service providers rely on colocation providers for wholesale space, enabling them to quickly and efficiently establish cloud regions worldwide to serve their customers. Major hyperscale operators, including Apple, Facebook, Google, AWS, Microsoft, Alibaba, Baidu, OVH, and China Telecom, invest substantial capital in the market annually. Additionally, colocation providers are constructing hyperscale facilities spanning over 100,000 square feet with a rack power density of up to 50 kW.
Notably, significant investments in submarine cable projects are being made by service providers such as Google, Facebook, and Microsoft. These investments aim to enhance connectivity between data center facilities and consumers. Partnerships with telecommunication network infrastructure providers across various countries have been established, involving multimillion-dollar collaborations. Furthermore, many governments worldwide are actively attracting hyperscale investments to fuel the growth of their digital economies.
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Increasing Demand for Big Data and Cloud Computing
The growing adoption of big data analytics and cloud computing services across various industries is driving the demand for hyperscale data center market. These centers provide the necessary infrastructure and computing power to store, process, and analyze massive amounts of data, enabling organizations to leverage data-driven insights and enhance their operations. The increasing reliance on data-intensive applications, artificial intelligence, and machine learning further fuels the demand for hyperscale data centers.
Rising Internet Usage and Digital Transformation
With the proliferation of internet-enabled devices and the continuous expansion of the digital ecosystem, there has been a significant increase in internet usage worldwide. The growing number of users accessing online services, such as social media, e-commerce, and streaming platforms, generates vast amounts of data that need to be stored and processed. Hyperscale data centers play a crucial role in supporting this digital transformation by providing scalable and efficient infrastructure to handle the growing data traffic.
Restrain: Infrastructure Complexity and Cost
Hyperscale data centers require substantial investments in terms of infrastructure, including servers, networking equipment, cooling systems, and power supply. Building and managing such large-scale facilities with advanced technologies can be complex and costly. Additionally, the operational expenses in the hyperscale data center market, such as energy consumption and maintenance, can be substantial. The high upfront and ongoing costs associated with hyperscale data centers can act as a restraint, especially for smaller organizations or those with limited budgets.
Trend: Shift Towards Edge Computing
While hyperscale data centers have traditionally been centralized facilities located in specific regions, there is a growing trend towards edge computing. Edge computing involves bringing computational power and storage closer to the source of data generation, reducing latency and improving real-time processing capabilities. This trend in the global hyperscale data center market is driven by the increasing demand for low-latency applications, such as autonomous vehicles, Internet of Things (IoT) devices, and augmented reality/virtual reality (AR/VR) applications. As a result, there is a rise in the deployment of smaller, distributed data centers at the edge of the network, complementing the existing hyperscale facilities.
The IT infrastructure segment is set to dominate the global hyperscale data center market, projected to generate $90.88 billion in revenue by 2030. This dominance is driven by the need for robust and scalable infrastructure to support data processing and storage demands. High-performance servers, storage systems, networking equipment, and power solutions are crucial components for efficient data centers. The growth of data-intensive applications, cloud computing, and advancements in server technologies contribute to the strong demand for IT infrastructure. Its pivotal role in meeting the expanding requirements of data-driven applications and digital transformation fuels its market dominance.
By Cooling System
The Crac & Crah Units segment dominates the global hyperscale data center market for cooling systems, generating a substantial revenue of $1.18 billion in 2022. This segment is projected to maintain its dominance with a steady CAGR of 1.69% during the forecast period. Crac (Computer Room Air Conditioning) and Crah (Computer Room Air Handler) units play a crucial role in data centers by providing precise temperature and humidity control. They effectively cool and remove heat from data center environments, ensuring the optimal operation of IT equipment and maintaining performance and reliability.
The dominance of the Crac & Crah Units segment can be attributed to several factors. Hyperscale data centers handle large amounts of computing equipment that generate significant heat, making efficient cooling crucial. Crac & Crah units excel in managing heat and creating a safe operating environment for critical IT infrastructure.
By Cooling Technique
The liquid cooling technique is projected to maintain dominance in the global hyperscale data center market, with a rapid CAGR of 3.4%. This method efficiently removes heat from data center components using liquid, offering advantages over traditional air cooling. Increasing power density and heat dissipation requirements drive the preference for liquid cooling in hyperscale data centers.
The projected CAGR of 3.4% reflects the growing adoption of this advanced cooling solution, enabling optimal temperatures for critical IT infrastructure. Implementing liquid cooling enables improved energy efficiency and reduced operating costs by efficiently removing heat and minimizing the need for excessive air conditioning. This dominance highlights the effectiveness of air-based liquid cooling in meeting the demands of modern data centers and maximizing overall efficiency.
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By region, North America is projected to continue holding its dominance in the global hyperscale data center market. The region is projected to hold over 45% revenue share of the market by the end of forecast period. Wherein, the United States holds the largest market share in hyperscale data center development, followed by Canada and Latin America. The US market is witnessing the construction of approximately 45 facilities with a power capacity of 15 MW, displaying steady growth throughout the forecast period. Colocation providers are strategically targeting edge data center locations for the construction and operation of hyperscale facilities. This is driven by the presence of self-built data centers by major players such as Facebook, Apple, and Microsoft, as well as the demand for wholesale spaces from media & entertainment firms and social media organizations.
Key organizations in the global hyperscale data center market like Facebook, AWS, Google, Microsoft, and Apple are making significant capital investments in data center construction across the Americas. For example, Google has planned a $10 billion investment in data centers and offices throughout the US. Facebook is undertaking the construction and expansion of seven data centers nationwide. Google opened its Tennessee data centers in 2019, with the Alabama data center currently under construction and expected to be operational in 2020. Microsoft and AWS are actively working to establish a facility for the US government. Moreover, Microsoft, Google, AWS, Alibaba, and Tencent are collaborating to establish cloud connect solutions across multiple colocation facilities in the country. This trend is projected to continue during the forecast period, contributing substantially to market revenue.
List of Key Companies Profiled:
By Cooling System
By Cooling Technique
By General Construction
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