Hyperscale Data Center Market Landscape 2024-2029

KEY TRENDS

Rising Procurement of Artificial Intelligence

• The AI industry is set to increase the size of hyperscale data centers significantly and propels the hyperscale data center market growth. Even though the current AI investments have not fully compensated for the growth in hyperscale data centers, the capacity of these data centers, especially for AI workloads, is expected to almost triple in the next six years.
• Countries across regions are increasingly embracing AI owing to the growing prevalence of automation and intelligent operations. Various governments in all regions are introducing numerous Artificial Intelligence (AI) strategies. For instance, In October 2023, the Global Artificial Intelligence (AI) Governance Initiative decided to provide an open, inclusive, and equitable framework for the advancement, security, and oversight of emerging AI technologies and services.
• The impact of AI on the economy is evident as major tech companies recognize the importance of leading in AI adoption. For instance, the rapid growth of ChatGPT illustrates how compelling AI can be. The widespread use of AI applications is expected to substantially increase data, requiring significant expansion of data infrastructure.
• AI adoption will impact the digital infrastructure sector similar to the public cloud services industry over the past decade. By 2040, over 80% of hyperscale capacity is projected to cater to AI applications. Businesses are developing AI strategies, with significant demand from hyperscale customers for additional capacity dedicated to AI. Additionally, digital infrastructure companies explore AI applications to optimize their operations, such as improving customer care through real-time troubleshooting and using AI-enabled analytics for network-based businesses.

Growing Procurement of the Big Data & IoT Solutions

• This increased trend in IoT usage is expected to coincide with an increase in the prevalence of AI in the future. At present, most data centers or cloud regions are being developed due to an increase in the use of AI & ML and other technologies in various sectors.
• With the increased use of new technologies, data centers need to evolve to handle the greater need for processing and storing data while considering how IoT and big data affect data centers in terms of performance, efficiency, and security.
• Big data and IoT technologies have experienced significant uptake in recent years across the globe. The rapid development of data traffic is fueled by IoT, which seamlessly links the digital and physical realms through a network of sensors.
• Various industry sectors and government entities are embracing these technologies, with the Banking, Financial Services, and Insurance (BFSI), healthcare, education, and telecom sectors all over the globe making substantial investments in big data and IoT owing to the escalating trend of digitalization. For instance, In November 2023, through a $192 million state-sponsored effort, CFE Telecomunicaciones will collaborate with Starlink to deliver satellite internet and mobile phone services, breaking down obstacles to digital isolation in rural Mexico.

Sustainable & Innovative Data Center Technologies

• Data centers are heavy consumers of energy, contributing significantly to emissions. Nevertheless, the impact of these emissions can be reduced by transitioning to sustainable energy sources such as green hydrogen and solar power.
• Most of the data is currently being stored in data centers worldwide. According to the International Energy Agency (IEA) estimation, data centers alone will consume approximately 8% of the total energy consumption by 2030.
• Latin American countries are well-positioned to embrace renewable energy, especially solar power, because of their plentiful sunlight and ability to supply electricity for rural and off-grid cell sites. This can be achieved by installing centralized solar farms or solar panels on-site. For instance, 38% of the energy used by 55% of Claro's cell sites in Brazil comes from solar power.
• Government support for green data centers across Europe is crucial in driving the region's hyperscale data center market toward a more sustainable future. European countries not only address environmental concerns but also set the stage for substantial growth in the hyperscale data center sector, as they implement stringent regulations and incentives to promote energy efficiency and renewable energy. This proactive approach ensures that the market can expand to meet the increasing demand for data storage while aligning with global sustainability goals.
• With the increasing interest in renewable energy sources, more investments in on-site power generation and PPAs are expected in all regions. This creates new chances, particularly for companies focused on renewable energy solutions. For instance, In September 2023, Solarvest Borneo Sdn Bhd, a subsidiary of the Malaysian clean energy company Solarvest Holdings Berhad, established a partnership to introduce a hyperscale green data center testbed and training program in Malaysia.

Rising Demand for Cloud-based Services

• All over the globe, many companies are embracing cloud-based services. This shift is largely being driven by a range of major cloud service providers such as Google, Amazon Web Services (AWS), Microsoft, Alibaba, Oracle, Tencent, IBM and others. These providers offer businesses the ability to store data, run software, and access computing power over the Internet, thereby eliminating the need for in-house data centers. For instance, In August 2023, Google Cloud established a new cloud region in Berlin, Germany. The Berlin-Brandenburg region, the company's second in Germany and 12th in Europe, caters to local cloud capacity needs for scalable workloads and disaster recovery. Germany's stringent data localization laws, including the GDPR and the German Federal Data Protection Act, necessitate local data storage and processing, prompting such substantial investments in local data center infrastructure.
• Latin America is an emerging marketplace for cloud adoptions and investments, with considerable participation from major cloud service providers such as Google, AWS, Microsoft, Oracle, IBM Cloud, and others.
• The European data center market is thriving due to the increased use of cloud services, driven by digital transformation, data security concerns, and the rise of edge computing. Investments in advanced infrastructure, along with a focus on sustainability and renewable energy, are key factors contributing to the dynamic expansion of data centers throughout the region and support the hyperscale data center market growth.
• The consistent growth in cloud adoption across sectors such as retail, healthcare, education, and government in APAC, fueled by factors such as the rollout of 5G and improved submarine cable connections, alongside a general shift toward cloud technology, has led to an increased demand for secure and easily transferable data. For Instance, In December 2023, Yotta Data Services unveiled an advanced GPU-based cloud on its Shakti Cloud platform, integrating Nvidia GPUs in AI and high-performance computing applications, with deployment beginning in January 2024 and scaling up to 32,768 GPUs by the end of 2025.

SEGMENTATION INSIGHTS

• Hyperscale data centers utilize a range of server types to address diverse operational needs. Blade servers are favored for their high power density and compact design, making them suitable for dense computing environments. Rack servers, known for their flexibility and ease of expansion, are frequently employed for various enterprise applications.
• In the global hyperscale data center market, operators are increasingly sourcing ODM infrastructure, with major data center operators adopting ARM-based servers and processors.
• The growing deployment of Artificial Intelligence (AI) and Machine Learning (ML) workloads will result in a rise in liquid immersion and direct-to-chip cooling in some regions.
• Data centers in Latin America are progressively adopting advanced cooling techniques, including air and liquid-based systems. This trend features innovations like liquid immersion cooling and the implementation of cutting-edge air conditioning technology by Google in its latest data center in Uruguay.
• There has been significant global growth in the establishment of Tier III and IV-certified data centers. Both private and public entities, including those in the BFSI, education, and government sectors, are securing Uptime Institute certifications for their data centers, whether in the design phase or fully developed. This reflects a strong commitment to reliability and operational excellence in data center infrastructure.
• District heating is common in Europe, where data center firms transfer heat generated from their operations to nearby offices, residences, swimming pools, and other facilities. The Nordic region is at the forefront of developing district heating systems with data centers, while Western Europe has also increased investments in this technology.

Segmentation by Infrastructure

• IT Infrastructure
• Electrical Infrastructure
• Mechanical Infrastructure
• General Construction

Segmentation by IT Infrastructure

• Server Infrastructure
• Storage Infrastructure
• Network Infrastructure

Segmentation by Electrical Infrastructure

• UPS Systems
• Generators
• Transfer Switches & Switchgear
• 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
• Liquid-based

Segmentation by General Construction

• Core & Shell Development
• Installation & Commissioning Services
• Engineering & Building Design
• Fire Detection & Suppression
• Physical Security
• DCIM/BMS Solutions

Segmentation by Tier Standards

• Tier I & Tier II
• Tier III
• Tier IV

GEOGRAPHICAL ANALYSIS

• In the global hyperscale data center market, the Americas (North America and Latin America) dominate the market in terms of investment with a market share of around 48% followed by APAC, Europe (Western Europe, Nordic, Central & Eastern Europe), and MEA (Middle East & Africa).
• In the Americas hyperscale data center market North America has the highest investment followed by Latin America.
• Europe (Western Europe, Nordic, Central & Eastern Europe) was the third largest hyperscale data center market globally. In Europe, Western Europe dominated the Hyperscale data center market in terms of investment, followed by Nordics and Central & Eastern Europe.
• In the Middle East & Africa, Saudi Arabia dominated the hyperscale data center market in terms of investment, and it was followed by South Africa, UAE, Israel, and other countries.
• The APAC was the second-largest hyperscale data center market in terms of investment across the globe. China was the largest hyperscale data center market in APAC with a market share of around 48%, followed by Japan, Australia, India, Indonesia, Hong Kong, Malaysia, and other APAC countries.

Segmentation by Geography

• North America
  • The U.S.
  • Canada
• Latin America
  • Brazil
  • Mexico
  • Chile
• Western Europe
  • The U.K.
  • Germany
  • France
  • Netherlands
  • Ireland
  • Spain
  • Other Western European Countries
• Nordics
  • Denmark
  • Sweden
  • Norway
  • Finland
• Central & Eastern Europe
  • Poland
  • Other Central & Eastern European Countries
• Middle East
  • UAE
  • Saudi Arabia
  • Israel
• Africa
  • South Africa
  • Other African Countries
• APAC
  • China
  • Hong Kong
  • Australia
  • New Zealand
  • Japan
  • India
  • South Korea
  • Taiwan
• Southeast Asia
  • Singapore
  • Indonesia
  • Malaysia
  • Thailand
  • Philippines
  • Vietnam

VENDOR LANDSCAPE

• The major hyperscale operators in the global hyperscale data center market include AWS, Microsoft, Meta, Google, Digital Realty, Chindata Group, GDS, Iron Mountain, AirTrunk, and others. For instance, in October 2023, Google decided to build a new data center at the Hunt Midwest Business Center in Kansas City. The construction of the data center will happen in four stages. It will include various additional buildings covering a space of around 1.435 million square feet.

IT INFRASTRUCTURE PROVIDERS

• Arista Networks
• Atos
• Broadcom
• Cisco Systems
• Dell Technologies
• Extreme Networks
• Fujitsu
• Hewlett Packard Enterprise (HPE)
• Hitachi Vantara
• Huawei Technologies
• IBM
• Inspur
• Inventec
• Micron Technology
• MiTAC Holdings
• NetApp
• Nimbus Data
• Nexsan (StorCentric)
• Oracle
• Pure Storage
• Pivot3
• Quanta Cloud Technology(QCT)
• Seagate Technology
• Supermicro
• Synology
• Toshiba
• Western Digital
• Wiwynn

Support Infrastructure Providers

• 3M
• ABB
• Airedale
• Alfa Laval
• Asetek
• Assa Abloy
• Bloom Energy
• Carrier
• Caterpillar
• Cummins
• Condair
• Cormant
• Cyber Power Systems
• Daikin Applied
• Delta Electronics
• Eaton
• Enlogic
• FNT Software
• Generac Power Systems
• Green Revolution Cooling (GRC)
• HITEC Power Protection
• Honeywell International
• Johnson Controls
• Kohler Energy
• KyotoCooling
• Legrand
• Mitsubishi Electric
• Munters
• Natron Energy
• NetZoom
• Nlyte Software
• Panduit
• Piller Power Systems
• Riello Elettronica
• Rolls-Royce
• Schneider Electric
• Siemens
• STULZ
• Trane
• TrippLite (Eaton)
• Vertiv
• Yanmar
• ZincFive

Construction Contractors & Subcontractors

• AECOM
• Bouygues Construction
• DPR Construction
• Holder Construction
• Jacobs
• M+W Group
• Mercury
• Arup
• AtkinsRéalis
• Aurecon
• BENTHEM CROUWEL ARCHITECTS
• CAP INGELEC
• Corgan
• Dar
• Deerns
• DSCO Group
• Edarat Group
• Fluor Corporation
• Fortis Construction
• Gensler
• Gilbane Building Company
• HDR
• ISG
• Kirby Group Engineering
• KKCG
• Laing O'Rourke
• Larsen & Toubro
• Linesight
• Mace
• Morrison Hershfield
• Mortenson
• NTT Facilities
• RED Engineering
• Royal HaskoningDHV
• Sterling and Wilson
• STO Building Group
• Syska Hennessy Group
• Turner Construction Company
• Winthrop Technologies

Data Center Investors

• Apple
• AWS (Amazon Web Services)
• CyrusOne
• Digital Realty
• Equinix
• Facebook (Meta)
• Google
• Keppel Data Centres
• Microsoft
• NTT DATA
• ST Telemedia Global Data Centres
• Vantage Data Centers
• VNET GrouP
• Africa Data Centres
• Nxtra by Airtel
• AirTrunk Operating
• Aligned Data Centers
• atNorth
• Beyond.pl
• Big Data Exchange
• Bridge Data Centres
• CDC Data Centres
• Chindata Group
• CloudHQ
• ClusterPower
• Cologix
• Compass Datacenters
• CoreSite
• DataBank
• Data4 Group
• EdgeConneX
• Etisalat
• Flexential
• GDS Services
• Global Switch
• Green Mountain AS - Data centres
• Gulf Data Hub
• HostDime
• InterNexa
• Iron Mountain
• iXAfrica Data Centres
• IXcellerate
• Moro Hub
• NEXTDC
• ODATA
• Ooredoo Group
• Orange Business
• Paratus Namibia
• QTS Data Centers
• Raxio Data Centres
• Rostelecom Data Centres
• Scala Data Centers
• Sify Technologies
• SUNeVision
• Telecom Egypt
• T5 Data Centers
• Turkcell
• wingu.africa
• Yondr
• Yotta Infrastructure.
• AdaniConneX
• KEVLINX
• Novva Data Centers
• Data First
• Khazna Data Centers
• Mobily
• Open Access Data Centres (OADC)
• center3

NEW ENTRANTS

• Ada Infrastructure
• Corscale Data Centers
• Crane Data Centers
• DHAmericas
• Edged
• Layer 9 Data Centers
• Quantum Loophole
• NE Edge
• Rowan Digital Infrastructure

KEY QUESTIONS ANSWERED