Gurugram, India, May 10, 2023 (GLOBE NEWSWIRE) -- was valued at around ~$200 Bn in 2021, boosted by the Covid-19 impact as it helped enterprises to address extensive demand and is eyeing to become a $ 450 Billion industry by 2027. Let’s Navigate the investment landscape.
A vibrant and fast-growing Data center ecosystem, aggressive investment in modernizing the infrastructure and the influx of investments from major players are listed as the major factors for the growth in the Global Data Center market. Some of the major Data center companies are Amazon, Akamai, Cisco Systems, Google, IBM, HP, Dell, Microsoft, VMware and Yahoo.
1. Skyrocketing Demand and Massive investments leading to rise of cloud infrastructure providers
- Cloud Providers offers Cloud based services to customers, such as storage, compute and networking. According to a report by Ken research, cloud infrastructure spending reached more than $140 Billion in 2020. The top Cloud providers, including Amazon Web Services, Microsoft Azure and Google Cloud accounted for majority of the spending. These Providers have made a significant amount of investment in the data center infrastructure to support the growing demand.
2. “Tech-Titans Billion Dollar Bet”: AWS, Microsoft and Google Ramp up Data Center Investments to meet surging demand
- There has been a significant investment made by major companies in the Global Data center market. For Instance, Amazon Web Services (AWS) announced plan to invest $2.8 Billion in the expansion of its data center in 2020 while Microsoft committed to spend $10 billion on data center expansion in 2021 alone. Google also plans to invest $7 billion in data centers and offices in the upcoming yeas in United States.
- Moreover, Data Center providers such as Equinix, Digital Reality and CyrusOne have also made significant investment in data center infrastructure. For example, Equinix announced an investment of $1 billion in its data center infrastructure 2019. Similarly, Digital Reality invested $ 3 billion in data center infrastructure in 2020.
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3. How Government Worldwide are fueling the growth of Data Centers with Investments
- Government has invested a lot for past few years. For instance, The US Government has been actively investing in data center infrastructure. In 2021, the Biden administration announced a $2 trillion infrastructure plan that includes funding for broadband and digital infrastructure which also include investment in data center infrastructure, Similarly, Singapore government has announced an investment of SGD 120 million in 2019 to develop a next generation data center park.
- Whereas, Chinese government announced a new policy called “Internet Data Center Industry Development and Promotion Plan”, which include the tax incentive and subsidies for the data center construction. Furthermore, the Japanese government has announced a plan to invest JPY 50 billion in data center construction over the next five years.
4. Is it All? NO. Strategic Acquisitions are also accelerating the growth in the Global Data Center Market
- Major Companies such as IBM and Dell have also made significant investment in the data center market by acquisitions. IBM announced a $34 billion acquisition of Red Hat in 2018, which has helped to expand its cloud and data center capabilities. Meanwhile, Dell has invested in number of acquisitions, including the purchase of EMC Corporation for $67 billion in 2016.
- Chindata and PDG have finished their IPOs and private placements in the Asia Pacific region. With the $161 million purchase of GPX India, Equinix expanded its portfolio with two Mumbai data centers and entered the Indian market.
- With mergers and acquisitions, Operators are also expanding their geographic reach across Europe. In order to increase its position in Southeastern Europe, Digital Realty also purchased Altus IT in the third quarter of 2020 in addition to Interxion.
Market Taxonomy
Global Data Center Market Segmentation
By type of Data Center Facilities
- Co-Location
- Managed
- Hyperscale
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By type of Co-Location
- Wholesale
- Retail
By End-User Data Center
- BFSI
- Government
- E-Commerce
- IT & Telecom
- Others
By Region basis Number of Data Centers
- North America
- Europe
- Asia-Pacific
- Middle East & Africa
- Latin America
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Global Cloud Services Market Segmentations
By type of Cloud Service
- Infrastructure as a Service (IaaS)
- Software as a Service (SaaS)
- Platform as a Service (PaaS)
By type of End-Users
- SME and BFSI
- E-Commerce, Retail and Logistics
- Media, Entertainment and Gaming
- Government
- Others
By Clients-Cloud
- Domestic Clients
- Global Clients
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Global Data Center and Cloud Services Market
According to Ken Research estimates, the Thailand Data Center and Cloud Services Market – which grew from approximately USD 440 Mn and USD 445 Mn respectively in 2017 to approximately USD 550 Mn and USD 1,390 Mn respectively in 2022. The data center and cloud services market is forecasted to grow further into USD 840 and USD 3600 Mn respectively by 2027, owing to the new government policies, Major investments, digitization, high density demand and tech savvy population.
According to Ken Research estimates, the Morocco Data Center Market – which grew from approximately USD 37.0 Mn in 2017 to approximately USD 49.0 Mn in 2022 – is forecasted to grow further into a USD 73.0 Mn opportunity by 2027F, owing to digital transformation in the country and rising investment to expand capacity. The number of internet users in Morocco increased by 2.9 million which is approximately 13% from 2019 and 2020. The market is expected to increase due to trends of a rising middle class in the country and accelerated urbanization. The IT/ITes sector is expected to hold the highest share of the market due to increasing internet consumption and the expansion of foreign IT companies in the region.
According to Ken Research estimates, Hyperscale data center market in USA generated a revenue of USD ~ Billion in 2022, expanding at a CAGR of ~14% in between 2017 and 2022. The surging growth is attributed to the increasing usage of internet, popularity of smart homes, wearables, trend of automation across industries, etc. The growth of Big Data; data coming from a number of sources that needs to be stored, processed and analysed to make informed business decisions in each and every industry. The drive to lessen energy consumption will act as a catalyst for the increased demand of energy efficient hyper-scale data centers in coming years.
KSA is the largest ICT market in the MENA, and it is well-positioned to become a technology service and cloud hub with access to international connectivity through the Red Sea and the Gulf. KSA Data Centre industry is witnessing robust growth in the era of virtualization and cloud computing. Shifts in creative media content towards Content Delivery Networks, IoT, growth of big data and the roll out of 5G is driving the demand for data consumption in KSA. Improvement in network connectivity, government support, and rapid growth in the adoption of big data, and IoT services have been strong enablers for the growth of the KSA data Center market. KSA Data Center Market is set to grow at a CAGR of 19.5% in terms of revenue generation, over the period 2021-2026F. The KSA government’s smart city initiatives, adoption of 5G, Internet of Things (IoT), Artificial Intelligence (AI) and cloud first policy are driving the demand for Data Centers.
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