Hyperscale Data Center Market Is Estimated To Witness High Growth Owing To Rapid Digitalization
The Hyperscale Data Center Market is estimated to be valued at US$ 87.87 Bn in 2023 and is expected to exhibit a CAGR of 30% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Hyperscale data centers provide massive infrastructure and computing resources that can scale up to thousands of servers. These data centers offer services such as cloud infrastructure, high-performance computing and analytics as per the client's requirements. Hyperscale servers are designed to support a large number of workloads and virtual machines with enhanced computational power for data-intensive applications.
Market key trends:
One of the key trends driving the growth of the hyperscale data center market is the rapid digital transformation across various industries owing to the adoption of emerging technologies such as cloud computing, big data, artificial intelligence and IoT. There is a significant surge in data traffic due to increased social media engagement, e-commerce activities and usage of OTT platforms. This is resulting in increased demand for hyperscale infrastructure to efficiently process and store huge volumes of data. Furthermore, robust investment by leading cloud service providers such as AWS, Microsoft Azure, Google Cloud and IBM Cloud into development of large hyperscale campuses worldwide is propelling the market growth.
Porter’s Analysis
Threat of new entrants: The established infrastructure and presence of large players makes it difficult for new entrants with high capital investment required to acquire land, build facilities.
Bargaining power of buyers: Large hyperscale clients can negotiate better deals and customizations in infrastructure solutions but remain dependent on a few technology and cloud service providers.
Bargaining power of suppliers: Suppliers of critical infrastructure components like servers, network routers, storage, power backup systems have limited bargaining power due to availability of substitutes.
Threat of new substitutes: Threat is low as hyperscale infrastructure is specialized with large scale facilities to support high density servers and critical facilities that are difficult to substitute.
Competitive rivalry: Intense competition among market leaders to be preferred cloud providers by expanding capacity and geographical presence.
SWOT Analysis
Strengths: Global footprint and economies of scale. Strong expertise in design, construction and management.
Weaknesses: High capital expenditure and long payback periods. Dependence on a few large clients for revenue.
Opportunities: Growing popularity of cloud, IoT, big data analytics driving need for additional data center capacity.
Threats: Rising energy costs, land acquisition challenges, stringent regulations for setting up facilities. Intense price wars among providers.
Key Takeaways
The Global Hyperscale Data Center Market Growth is expected to witness high, exhibiting CAGR of 30% over the forecast period, due to increasing adoption of cloud-based applications and services. The North American region currently dominates the hyperscale data center market, followed by APAC and Europe.The United States and China are recognized as the countries with the highest Hyperscale data center investments growing at a significant rate.
Regional analysis Asia Pacific region is expected to grow at the fastest rate during the forecast period due to the increasing availability of inexpensive lands and favorable government regulations to attract hyperscale data center investments in countries like India and China.
Key players operating in the hyperscale data center market are Aecom, DPR Construction, Holder Construction, Jacobs, Bouygues Construction, Mercury, Arup, and Benthem Crouwel Architects. Majority of hyperscale data center capacity is owned by leading Cloud Service Providers (CSPs) including Google, Microsoft, AWS, Alibaba, Tencent, Facebook and IBM.