Hyperscale Data Center Market - By Component (Solution, Service), By End-Use (Cloud Providers, Colocation Providers, Enterprises), By Application (BFSI, Government, IT & Telecom, Entertainment & Media, Retail & E-commerce) & Forecast, 2023 – 2032

Hyperscale Data Center Market Size

Hyperscale Data Center Market was valued at USD 37.4 billion in 2022 and is projected to grow at a CAGR of over 25% between 2023 and 2032. Global expansion of the data center industry is propelling the industry growth. As businesses expand internationally, the demand for robust, scalable, and geographically diverse data center facilities increases. Hyperscale data centers offer large-scale, efficient, and flexible solutions, catering to diverse industries across regions. For instance, in September 2023, Princeton Digital Group established a 22MW hyperscale data center in Greater Jakarta, (Indonesia) to provide secure & scalable capacity for hyperscale companies and enterprises in industries such as cloud, content, commerce, AI & fintech. The facility also aims to support the growing data and computational needs of the enterprises with reliable & flexible infrastructure.
 

Surging investments and initiatives for digital transformation are fueling the hyperscale data center market expansion. As companies embrace digital transformation, the need for high-performance, scalable infrastructure grows. Hyperscale data centers play a pivotal role in supporting this transformation, offering the necessary computational power, storage, and reliability. For instance, in October 2023, Microsoft invested USD 3.2 billion in Australia with a focus on expanding AI and cloud computing infrastructure in the next two years. The new investment will help Microsoft grow its data centers across Canberra, Sydney, and Melbourne by 45%.
 

Initial high investments and installation costs pose a challenge in the hyperscale data center industry. The substantial capital required for setting up and equipping these large-scale facilities can deter some organizations from entering or expanding in this market. Additionally, the complexity and time-consuming nature of building & deploying these centers result in significant upfront expenditures, making it challenging for some entities to justify or afford the initial high costs associated with hyperscale data center infrastructure.
 

Impact of COVID-19 pandemic

The COVID-19 pandemic negatively impacted industry by initially causing delays in construction & deployment due to lockdowns and supply chain disruptions. It led to a shift in IT spending, creating uncertainties, and budget constraints. While the demand for data surged, economic uncertainties affected investments, hindering the development and expansion of hyperscale data centers during the pandemic's onset.
 

Hyperscale Data Center Market Trends

The increased adoption of cloud services is a dominant trend fueling the hyperscale data center industry. As organizations shift to cloud-based operations, there is a surge in the need for extensive computing power and data storage capabilities. Hyperscale data centers, known for their ability to offer immense scalability, high performance & robust infrastructure, are essential in meeting the demands of large-scale cloud operations. These centers support diverse cloud services and applications, accommodating the growing data requirements and computational needs driven by cloud-based technologies.
 

The focus on sustainability and green data centers is an emerging trend in the hyperscale data center industry. This trend encourages the development of eco-friendly practices and technologies in hyperscale facilities, addressing the industry's energy consumption challenges while striving to reduce carbon footprints, aligning with environmental goals, and enhancing the overall efficiency & sustainability of these large-scale data centers. For instance, in September 2023, Solarvest, Centexs, Huawei, and Greenbay collaborated to launch a hyperscale green data center testbed in Malaysia, specifically in Sarawak. Their objective is to establish a testbed for eco-friendly data centers and initiate a training program focused on green technology in the region.
 

Hyperscale Data Center Market Analysis

Based on component, the market is divided into solution and service. The solution segment is expected to grow at a CAGR of around 25.5% during the forecast period. The segment is anticipated to witness growth over the forecast period due to the increasing demand for specialized services. As hyperscale facilities expand, there is a surge in the need for tailored solutions including security, networking, and managed services. Providers are expected to offer comprehensive solutions, such as robust security measures, high-speed networking solutions, and managed services, that cater to the specific needs of hyperscale data center operations, thus driving growth in this segment.
 

Based on application, the market is categorized into BFSI, retail & e-commerce, government, IT & telecom, entertainment & media, and others. The BFSI segment was valued at over USD 8.5 billion in 2022. The BFSI segment is anticipated to grow significantly in the hyperscale data center market due to stringent security, compliance requirements, and increased digital transformation efforts. BFSI firms increasingly rely on hyperscale data centers to manage vast amounts of financial data securely, enhance customer services, adopt cloud-based solutions, and meet regulatory demands. The growing reliance on digital services in the BFSI sector is driving the need for scalable and secure hyperscale data center infrastructures.
 

North America held a dominant market share of over 35% in 2022. Technological advancements, high demand for cloud services, increasing digital transformation initiatives, and the presence of major tech companies in North America drive the need for large-scale, efficient data centers. Favorable regulatory environments and rising investments in infrastructure are boosting the expansion of hyperscale data centers, positioning North America as a key hub for further market expansion. For instance, in September 2023, Scala Data Centers launched its first hyperscale data center in Tepotzotlan, Mexico. This move aims to enhance Scala's footprint and cater to the growing demand of large cloud & content providers in the region.  
 

Hyperscale Data Center Market Share

Major players operating in the hyperscale data center industry are:

• Alphabet Inc.
• Amazon Web Services
• Broadcom Ltd.
• Cisco Systems Inc.
• Dell Inc.
• Equinix Inc.
• Huawei Technologies Co., Ltd.
• IBM Corporation
• Microsoft Corporation
• Schneider Electric SE

Microsoft Corporation and Alphabet Inc. (Google) are dominant players in the global market, holding over 15% of the revenue share in 2022 due to their extensive global infrastructure, substantial investments, and innovative technologies. Both companies possess massive data center networks, offering scalable, secure, and high-performance solutions. Their robust cloud services, coupled with a commitment to cutting-edge research and development, solidify their position as leaders in hyperscale data center operations.
 

Hyperscale Data Center Industry News

• In July 2023, NTT Ltd. introduced its new hyperscale data center campus in Chennai (India), spanning six acres and boasting a total capacity of 34.8 MW across two buildings. The first facility, operational with a 17.4 MW IT load, accompanies the arrival of the MIST subsea cable system in Chennai, solidifying NTT's position in the India data center industry.
   

The hyperscale data center market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2018 to 2032, for the following segments:

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Market, By Component

• Solution
  • Cooling
  • Power
  • IT racks & enclosures
  • LV/MV distribution
  • Networking equipment
  • DCIM
• Service
  • Installation & deployment
  • Maintenance & support
  • Monitoring services

Market, By End-Use

• Cloud providers
• Colocation providers
• Enterprises

Market, By Application

• BFSI
• Retail & e-commerce
• Government
• IT & telecom
• Entertainment & media
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Netherlands
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • Singapore 
• South America
  • Brazil
  • Argentina
  • Colombia
  • Chile
• MEA
  • GCC
  • South Africa