Services by data centers have become highly sought-after, especially as organizations around the world generate staggering volume data on a daily basis. Future Market Insights (FMI) sees this as a key driver of the data center market, whose valuation is expected to reach US$ 103.05 Bn by 2021.
Technology is rapidly changing the economic landscape and creating several new opportunities for organizations to consider how they can expand their IT solutions to capitalize on emerging markets. Growing penetration of digital services across several industry verticals has resulted in the increased demand for data centers for storage, computing, and network management. This, in turn, will drive the demand for data centers.
Companies have already started investing heavily in the construction of new data centers and retrofitting existing facilities to incorporate the latest industry standards. This is expected to create attractive opportunities for growth in the near future.
The global data center market is estimated to register a CAGR of 7.4% during the forecast period of 2021-2031. FMI has forecast the IT & Telecom industry to emerge as a key end user, which is expected to account for 46.3% of the global market in 2021. However, the media & entertainment industry is expected to register growth at a higher CAGR over the forecast period.
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Key Takeaways: Data Center Market
- Data center market is forecast to exhibit 5.3% Y-o-Y growth in 2021
- The U.S. is one of the early adopters of latest technology and is expected to remain a highly lucrative market for data centers. It is expected to hold nearly 81.6% of the North America market in 2021
- U.K. will exhibit high demand for data center. The U.K. market is expected to register 8.4% Y-o-Y growth in 2021
- Germany and France will exhibit high demand. Of these, Germany is expected to account for lion’s share in Europe market
- While Japan and South Korea will remain lucrative pockets, China is projected to continue leading the data center market in East Asia
“The demand for hyperscale data centers has shot up in the last two years, as more businesses are shifting their IT infrastructure to cloud, this demand has created high growth opportunities for data center technology providers” says FMI Analyst.
Data Center Market Gaining from Digital Transformation Amid Pandemic
The health concerns are increasing around the world and causing significant business impact due to the on-going COVID-19 pandemic —particularly when it comes to delivering data. IT operations associated with data centres got drastically disrupted during this pandemic. Physically moving servers, closing buildings and opening a new space, is massively more complicated in the Covid-19 world.
However, the pandemic has pushed almost every major organization towards a path to digital transformation, as the surge in remote working calls for rapid mobilization of cloud computing to cope with a rise in demand for data. Countries have experienced exponential growth in data demand. The pandemic has underscored the importance of digital technology and data centers and has increased the adoption of data centers during the pandemic. It is also expected to witness significant growth during and post-pandemic era.
Increasing Adoption of Modular Data Centers
One of the key features of a modular data center is the ease of deployment and portability offered by it. As the product is a compilation of already prepared prefabricated modules, the speed of deployment and an option of portability has been the primary factor proliferating the demand for the same. Moreover, the compact size of modular data centers, compliments the aforementioned factors.
The introduction of micro-modular data centers and containerized modular data centers, i.e. an integration of IT infrastructure, power module and cooling solutions into one container, is also boosting the modular data centers market in various regions due to space constraints in these regions.
Who is Winning?
Some of the leading companies operating in the data centers market are IBM Corporation, Cisco System, Inc., HPE, Dell Technologies, Hitachi Ltd, NTT Communications, Schneider Electric, Comarch SA, ABB, and Huawei Technologies Co., Ltd. Companies operating in this market are focusing on various strategies to gain competitive advantage and expand their footprint.
For instance:
- In November 2020, South Korea’s KT finished the construction of Seoul’s largest hyperscape data center
- In December 2020, it was announced by the U.S. government that it plans to invest US$300 Mn in Liquid Telecom’s Africa Data Centres (ADC) to fund expansion in Kenya and South Africa
- NIT has opened its London data center in 2020 as a part of a whopping £500 Mn investment plan
More Valuable Insights on Data center Market
FMI’s report on the data center market is segmented into four major sections such as component (hardware (data center power systems, data center racks, data center servers, data center networking devices, and others), software, and service (professional services (integration & implementation, consulting, and support & maintenance) and managed services)), data center size (small data center, mid-sized data center, and large data center), industry (IT & telecom, BFSI, manufacturing, healthcare, media & entertainment, and others) and region(North America, Latin America, Europe, East Asia, South Asia & Pacific, Middle East & Africa) to help readers understand and lucrative evaluate opportunities in the data center market.
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Key questions answered in the report
- How will data center market expand until 2031?
FMI projects the global data center market to register a CAGR worth 7.4% across the 2021-2031 assessment period. Increasing penetration of cloud services is anticipated to drive the growth in a positive direction.
- Which is the most lucrative market for data centers?
North America is the most lucrative market for data centers globally and it will remain dominant through 2031. Within North America, the U.S. will account for the lion’s share due to the presence of a large number of data centers in the country.
- Who are the leading players in data center market?
Prominent players operating in the global data center landscape include Dell Technologies, IBM Corporation, Cisco Systems, HPE, Dell Technologies among others
- Which Industry is Exhibiting High Demand for Data Centers?
IT & Telecom industry is expected to remain the dominant end user for the data centers market through the forecast period. However, application in the media & entertainment sector is expected to increase at a higher rate.
- Which Size of Data Center has been Registering High Demand?
Services by small data centers are expected to remain highly sought-after through 2021-2031.