China Data Center Physical Security - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

The China Data Center Physical Security Market size is estimated at USD 79.02 million in 2024, and is expected to reach USD 173.86 million by 2029, growing at a CAGR of 17.08% during the forecast period (2024-2029).

Key Highlights

• The security measures can be categorized into computer room controls, facility controls, perimeter security, and cabinet controls. The first layer of data center security detects, delays, and discourages unauthorized personnel entry at the perimeter. Upon breach of the perimeter monitoring, the second layer of defense withholds access. It is an access control system which uses card swipes or biometrics. The third layer further restricts access through diverse verification methods by monitoring all restricted areas and deploying entry restrictions such as turnstile with VCA, biometric access control devices for thumbprints, irises, or vascular patterns, and using radio frequency identification. The initial three layers ensure only authorized entry. However, additional security to restrict access comprises cabinet locking mechanisms. It addresses the fear of an 'insider threat,' such as a malicious employee.
• The upcoming IT load capacity in the country is projected to cross 3,300 MW by 2029, boosting the demand for data center racks.
• The construction of raised floor area for data centers in the country is expected to reach 11.9 million sq. ft by 2029 for under construction raised floor space.
• The country's total number of racks to be installed is expected to touch 600,000 units by 2029.
• Currently, four submarine cable projects are under construction in the country. One such submarine cable, which was estimated to start service in 2023, is Asia Direct Cable (ADC), stretching over 19000 kilometers with landing points Chongming, Lantau Island, and Shantou for planned submarine cables.

China Data Center Physical Security Market Trends

The Video Surveillance Segment Holds a Significant Share in the Market

• Data center operators use video surveillance systems to ensure security standards and regulations are met. This allows you to monitor access, detect unauthorized access, and maintain compliance. Video surveillance helps prevent malicious or erroneous data center operations and provides evidence to identify those responsible in the event of an incident.
• Video surveillance also has a powerful deterrent effect, reducing the risk of physical attacks and unauthorized access to critical data. Users can monitor all ongoing issues and events within the data center in real-time and provide up-to-date information to customers anytime and anywhere.
• The information technology sector is central to national security, the economy, and public health and safety, with businesses, governments, academia, and individuals increasingly relying on it to function. To reduce data theft and cybercrime in the country, data centers rely on video surveillance cameras.
• Additionally, factors such as increased connectivity and online shopping are likely to contribute to increased data generation and processing power. As the country's internet penetration rate increased, the number of smartphone users also increased in 2022. This means data centers will grow in size, and, as a result, the demand for preventive video surveillance will increase. Detect malicious or erroneous operations within the data center and provide evidence to identify responsible parties in the event of an incident.
• The government is focusing on improving the data center's physical security solutions to meet the market demand. The Chinese government plans to build eight computing hubs and 10 data center clusters to build a unified data center system by 2025. The project aims to channel the growing demand from the east to the data centers in the western region of the country.

The IT and Telecommunication Segment Holds the Major Share

• China is leaping ahead on the global scale for the construction of data centers, majoring in the increasing demand from enterprises to scale up their data center operations. Enterprises in the region seek reliable and stable data services for the application of IoT, 5G, and other AI-driven spurs demanding high internet computation power. Global tech giants such as Huawei Technologies Co and Apple Inc. are stepping up efforts to build data centers in Guizhou province due to its ample power resources and mild climatic conditions.
• Since the advent of the Internet, ICT has become one of the most important drivers of global development and value creation. In recent years, the ICT industry has undergone many changes due to technological advances. High growth rates are projected in this rapidly growing market. ICT companies, and virtually all companies with access to telecommunications networks, are likely to feel immediate and far-reaching impacts from these major trends currently prevalent in the telecommunications sector.
• The Chinese government is stridden into fifth-generation mobile telecommunications technology and the thriving e-commerce sector, which is leveraging the potential of internet data centers, thereby enabling IDCs to be viable investments for industry stakeholders. Further, the trend is supported by the emergence of powerhouses such as Tencent Holdings and Huawei Technologies, whose growth drives the construction of IDC facilities in the region. The country capitalizes on the demand for computing power and continues to dominate the list of the world's fastest supercomputers by number.
• Additionally, the region is encouraging the adoption of the internet in private and state businesses, thereby driving disruption in the economy and creating technological leaders. Private and public businesses' proliferation and adoption of digital payment systems drive the demand for IDC infrastructure. Further, it is expected that the increasing digital transformation of the region, demanding more information processing, would drive the construction of data centers and increase the need for data center security in the country.
• The increasing demand for streaming services, such as Douyin, Kuaishou, Iqiyi, Youku, and Tencent Video, in China has increased data consumption with their high-quality video streaming services. Netflix, a popular OTT platform with a presence in many countries, is unavailable in China.

China Data Center Physical Security Industry Overview

The market is highly fragmented due to players like Axis Communications AB, ABB Ltd, and Bosch Sicherheitssysteme GmbH, which play a vital role in upscaling the capabilities of enterprises. Market orientation leads to a highly competitive environment. The biggest retail and wholesale data center market companies have further tried to make their system secure and safe from thefts. There has been a wave of consolidation in the secondary markets as smaller players seek to scale to compete and big players scale their products in the market. For instance,

February 2024: In the latest release of the Axis operating system, AXIS OS, Axis Communications AB announced that the IEEE MAC 802.1sec security standard supports more than 200 network devices, including cameras, intercoms, and 11.8 audio speakers. Demonstrating the company's continued commitment to device and data security, Axis has become the first manufacturer of physical safety products supporting MACsec Media Access Control Security.

August 2023: Securitas signed an expanded 5-year agreement to provide data center security for Microsoft in 31 countries, solidifying a strong relationship. The global agreement includes risk management, comprehensive security technology as a system integrator, specialized safety, security resources, guarding services, and digital interfaces. Securitas ensures that the data center's physical security program remains innovative, robust, and effective. This demonstrates stability as a collaborator, assisting in navigating the challenges of Microsoft's expanding business.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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