Global Data Center Investment Trends and Growth Opportunities

Global Data Center Investment Trends and Growth Opportunities

Investments in Hyperscale Data Centers, Geographic Expansion, and Emerging Technologies Drive Future Growth Potential

RELEASE DATE
30-Jun-2022
REGION
Global
Research Code: MG77-01-00-00-00
SKU: EG02238-GL-MT_26610
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Description

Investments in data centers are increasing, even during the COVID-19 pandemic. This Frost & Sullivan study provides an overview of the global data center industry, analyzing technological and investment trends shaping the industry's growth. The key factors driving growth include the rising popularity of hybrid colocation and hyperscale data centers, the emphasis on sustainability, the role of emerging technologies, and the data boom created by the proliferation of internet-enabled devices. The study’s analysis is segmented by type (colocation, hyperscale cloud, and enterprise) and region (Asia-Pacific, the Americas, and Europe, the Middle East, and Africa).

The study expects investments from leading hyperscale cloud providers to continue at a healthy pace over the forecast period from 2022 to 2031 (with 2021 as the base year). The growing need for hyperscale capacity from public cloud providers and over-the-top media content is forecast to fuel the colocation demand. The pandemic has accelerated the digital transformation of enterprises, creating higher demand for storage and compute capabilities. While data center providers invest heavily in building new capacity to meet demand, deploying emerging technologies like artificial intelligence and machine learning encourages providers to invest in new data center designs for enhanced efficiencies. Industry competition to address global requirements from carrier-neutral and telecommunication service providers has also intensified.

The advent of internet-enabled devices and industrial sensors expands data creation and, subsequently, the requirements for data transfer and storage, resulting in global investments in data centers to process and store information. There is also a wave of investments from special purpose acquisition companies and marquee investors in the industry. Private equity and sovereign wealth investors are essential to enabling data center providers to build new hyperscale facilities and acquire existing data centers. Private equity firms are keen to invest in large-scale facilities (a capacity of at least 50 megawatts) and builds in relatively new markets.

The study anticipates North America and Asia-Pacific as the most active hubs for data center growth. In 2021, North America was the largest market for data center investments. With robust data center construction and data creation activities, Asia-Pacific is expected to overtake North America by the end of 2026 and register more than 40% of the total market share. India, in particular, has strong potential to contribute to the data center industry growth.

Author: Gautham Gnanajothi

Table of Contents

Why is it Increasingly Difficult to Grow?

The Strategic Imperative 8™

The Impact of the Top 3 Strategic Imperatives on the Data Center Industry

Growth Opportunities Fuel the Growth Pipeline Engine™

Trend Overview

Hybrid Colocation—Cloud On-Ramps Fuel Hybrid Cloud Adoption

Hybrid Colocation—Cloud On-Ramps Fuel Hybrid Cloud Adoption (continued)

Hybrid Colocation—Cloud On-Ramps Fuel Hybrid Cloud Adoption (continued)

Sustainability—The Center of It All

Sustainability—The Center of It All

Energy Storage—The Li-ion Era

Energy Storage—The Li-ion Era (continued)

Hyperscale Growth—The Juggernaut Pushes On

Robotics—Next Phase of Data Center Automation

Robotics—Next Phase of Data Center Automation

Market Consolidation—M&As and JVs Are at an All-Time High

Edge Computing—Rise of Distributed Intelligence

Artificial Intelligence—Optimizing Data Center Performance

Scope of Analysis

Segmentation

Growth Drivers

Growth Restraints

Forecast Assumptions

Investment Forecast

Investment Forecast Analysis

Investment Forecast by Segment

Investment Forecast by Region

Investment Forecast Analysis by Segment and Region

Investment Forecast

Investment Forecast by Data Center Size

Investment Forecast by Region

Investment Forecast Analysis

Investment Forecast Analysis by Region—Americas

Investment Forecast Analysis by Region—EMEA

Investment Forecast Analysis by Region—EMEA

Investment Forecast Analysis by Region—APAC

Investment Forecast Analysis by Region—APAC

Investment Forecast

Investment Forecast by Region

Investment Forecast Analysis

Investment Forecast

Investment Forecast by Type

Investment Forecast Analysis

Growth Opportunity 1: Expanding Demand for Colocation

Growth Opportunity 1: Expanding Demand for Colocation (continued)

Growth Opportunity 2: Geographic Expansion for Revenue Acceleration

Growth Opportunity 2: Geographic Expansion for Revenue Acceleration (continued)

Growth Opportunity 3: Edge and Modular Data Centers for Latency Needs

Growth Opportunity 3: Edge and Modular Data Centers for Latency Needs (continued)

Growth Opportunity 4: Capitalize on Cloud Growth for Revenue Diversification

Growth Opportunity 4: Capitalize on Cloud Growth for Revenue Diversification (continued)

Your Next Steps

Why Frost, Why Now?

List of Exhibits

List of Exhibits (continued)

Legal Disclaimer

Investments in data centers are increasing, even during the COVID-19 pandemic. This Frost & Sullivan study provides an overview of the global data center industry, analyzing technological and investment trends shaping the industry's growth. The key factors driving growth include the rising popularity of hybrid colocation and hyperscale data centers, the emphasis on sustainability, the role of emerging technologies, and the data boom created by the proliferation of internet-enabled devices. The study’s analysis is segmented by type (colocation, hyperscale cloud, and enterprise) and region (Asia-Pacific, the Americas, and Europe, the Middle East, and Africa). The study expects investments from leading hyperscale cloud providers to continue at a healthy pace over the forecast period from 2022 to 2031 (with 2021 as the base year). The growing need for hyperscale capacity from public cloud providers and over-the-top media content is forecast to fuel the colocation demand. The pandemic has accelerated the digital transformation of enterprises, creating higher demand for storage and compute capabilities. While data center providers invest heavily in building new capacity to meet demand, deploying emerging technologies like artificial intelligence and machine learning encourages providers to invest in new data center designs for enhanced efficiencies. Industry competition to address global requirements from carrier-neutral and telecommunication service providers has also intensified. The advent of internet-enabled devices and industrial sensors expands data creation and, subsequently, the requirements for data transfer and storage, resulting in global investments in data centers to process and store information. There is also a wave of investments from special purpose acquisition companies and marquee investors in the industry. Private equity and sovereign wealth investors are essential to enabling data center providers to build new hyperscale facilities and acquire existing data centers. Private equity firms are keen to invest in large-scale facilities (a capacity of at least 50 megawatts) and builds in relatively new markets. The study anticipates North America and Asia-Pacific as the most active hubs for data center growth. In 2021, North America was the largest market for data center investments. With robust data center construction and data creation activities, Asia-Pacific is expected to overtake North America by the end of 2026 and register more than 40% of the total market share. India, in particular, has strong potential to contribute to the data center industry growth. Author: Gautham Gnanajothi
More Information
Author Gautham Gnanajothi
Industries Energy
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Is Prebook No
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WIP Number MG77-01-00-00-00