Data Center Market Analysis by Type (New Data Centers, Data Center Rebuild), by Consulting (Network Design, Security Consulting, Network Analysis, Benchmarking), by Integration (Project Management, Installation, Test & Debug), by Application & Regional Forecast to 2032

Data Center Market Outlook (2022-2032)

The global data center market is expected to be valued at around US$ 77 Bn in 2022. Revenue generation from data centers is likely to accelerate at a high CAGR of 13.8% to top US$ 279 Bn by 2032.

Demand for new data centers is likely to surge at a CAGR of 14.3%. The global ICT market was valued at around US$ 5 trillion in 2020, with data centers holding 1.38% share of the same.

Widespread proliferation of internet of things and cloud computing have provided stellar growth avenues for data centers. Both, developed and emerging economies have witnessed impressive progression of data centers with companies spending on developing new centers for data storage and deployment. Connected systems have added fuel to market growth and created ample opportunities for data center companies and data center knowledge. This will lead the market to grow 3.6x over the forecast period of 2022-2032.

Revenue Analysis of Data Centers (2017-2021) vs Market Projections (2022-2032)

• Value generation from data centers increased at a CAGR of 9.4% from 2017 to 2021.
• The South Asia & Oceania region holds a market value of around US$ 8 Bn, owing to high rate of technology adoption.
• East Asia and Europe contributed significantly to the growth of the data center space, and account for around 17% and 26% market share, respectively.
• Network design and network analysis in consulting hold market shares of 25.4% and 13%, respectively.
• The IT & telecom sector is likely to enjoy a major market share of 31% in data centers by the end of 2032.

What is expected to Drive Data Center Market Expansion?

Change in Operational Processes and Shortage of IT Staff

Data center network transformation and changing face of technology have necessitated updating and re-organizing operational processes associated with hardware and software. This alteration in operational processes has called for complete up-gradation of the management processes of organizations.

Several organizations have been adopting hyper-scale infrastructure and agile DevOps models that require substantial implementation time, consequently leading to project delays due to process re-engineering. This factor is expected to challenge the growth of the global market for data center companies and its components to some extent over the coming years.

Proliferating technological advances and digitization in data centers have increased demand for highly skilled IT workforce to manage and handle connected technology and software-defined services.

With shortage of IT staff in high-growth domains such as mobility, cloud computing, big data, internet of things, and software-defined networking, operational efficiency and crisis management in data centers have become questionable with varying uncertainties in solutions, thereby increasing the probability of function failure or system errors, in turn, constraining the growth of data center adoption.

Increased Reliance on the Virtual Space across Residential & Commercial Spaces

With growing trend of virtualization, capacity enhancement and high efficiency quotient with respect to data and information security and deployment have been in limelight. The data center industry has been significantly influenced by virtualization technologies; for example, data center in cloud computing.

Middleware virtualization, operating system virtualization, and hardware virtualization are witnessing higher demand in the data center space, given the enhanced functioning of systems using the virtualization concept. It assists the operator in a data center to carry out rapid deployment operations as well as effectively manage cooling and power challenges.

Moreover, it simplifies the management of traditional and cloud-based systems by bringing in automation in the network and various other storage devices. It also facilitates enhanced investment protection and better resource utilization, along with improving flexibility, scalability, and interoperability of the entire system, which is expected to drive the data center design market during the period of assessment.

Country-wise Analysis

How big is the Scope for Data Centers across North America?

Enhancements in Existing Information Technology Infrastructure

The North American region will continue to showcase dominance in the data center architecture space on the backdrop of increasing investments by companies coupled with availability of enhanced IT infrastructure. The region has observed increased propagation in the United States with respect to both, absorption and construction.

According to the Economic Report, the San Francisco Bay Area has become the third-largest data center industry in the U.S., with Washington DC and Dallas following. The Bay Area has around 120 data centers, and 335 service providers with nine network fabrics. Thus, North America is expected to hold a market share of 34% and is likely to be valued at US$ 87 Bn by 2032.

How will the Middle East & Africa Fare in the Data Center Industry?

Increasing Investments in Big Data Augmenting Demand

As countries in the Middle East and Africa (MEA) look forward to transform their respective economies, technology is expected to play a vital role, with cloud services being the epicenter of this transformation. Companies are also planning to invest in MEA in order to grab a significant share of the cloud computing business in the region.

• For instance, Microsoft Corporation is planning to capture Middle Eastern markets such as Abu Dhabi and Dubai to open cloud data centers in these countries.

The MEA region is likely to reach a valuation of around US$ 11 Bn by 2032.

How is the Market for Data Centers Expected to Fare across Japan?

Increasing scope of machinery, robotics and medical & scientific research

Japan is considered as a data center powerhouse, consisting numerous data center clusters offering several colocation opportunities. Significant opportunities can be grabbed in the country in the data center space, given its lucrativeness in the field of technology, machinery, robotics, medical and scientific research, and machinery.

The market in Japan for data center services is likely to expand at a CAGR of 12% over the forecast period.

Category-wise Insights

How is Growing Emphasis on Network Design Adding Value to Data Centers?

Increasing prevalence of network designing amid rapid digitization

Rising pervasiveness of network designing has accelerated the development of data centers around the globe in order to manage heavy volumes of data. This has resulted in the transformation of data center infrastructure in order to adapt to the growing volumes of data along with a variety of information transferred through various devices in the digital medium.

Digitization has tapped various aspects such as online purchasing, social network management, online banking transactions, and other finances. This, coupled with proliferating penetration of smartphones and Internet of Things (IoT), has resulted in huge volumes of data flow along with critical information on digital platforms. Network design is expected to hold a market share of 25% and likely to be valued at US$ 63 Bn by 2032.

How are New Data Centers Impacting Market Valuation?

Emergence of new Hyperscale Data Centers and Revamping of Existing Ones Encouraging Growth

Growth of new data centers is primarily driven by hyper scale data center companies who are changing way IT spaces are operated and built. In the meantime, existing data center companies are revamping their construction strategies for delivering capacity faster in larger chunks.

The ongoing shift of enterprise IT workloads, moving out of the on-premise data center to purpose-built facilities that are operated by colocation and cloud platforms providers, is one megatrend. It is expected that the valuation of new data centers is likely to reach US$ 200 Bn by 2032.

Competitive Landscape

Major companies have strong customer networks across the globe. Market frontrunners are tech giants with deep pockets, which aids them to invest heavily in development. Additionally, these players offer diversified services that are tailored as per individual customers.

Growth strategies adopted by market participants are agreements & contracts, collaborations, and new product developments to withstand their market position.

• In 2019, Qualcomm Technologies, Inc. launched an AI-based chip family named as Cloud AI 100. The ASIC family comes in a variety of thermal design and form factor points to make a different use case. This newly launched chip is heightened with refined features of AI to provide better performance for devices.

Key Segments Covered

• By Type :

  • New Data Centers
    • Internal Data Centers
    • Service Provider Data Centers
  • Data Center Rebuild

• By Application :

  • Data Centers for IT & Telecom
  • Data Centers for BFSI
  • Data Centers for Governments
  • Data Centers for Healthcare
  • Others

• By Consulting :

  • Network Design
  • Network Design & Planning
  • Security Consulting
  • Network Analysis
  • Benchmarking
  • Needs Assessment
  • Operation Assessment
  • Process Improvement

• By Integration :

  • Project Management
  • Installation
  • Test & Debug
  • Custom Software Development
  • Security Implementation
  • Change Management
  • System Configuration
  • Training & Site Preparation