Data Center Market is Forecast to Grow at the CAGR of 10.20% in the Forecast Period

The data center market is growing at a high CAGR because of the increasing number of data centers due to rising investment by the government as well as large enterprises into IT infrastructure along with the rapid shift of businesses towards a cloud environment

A recent study conducted by the strategic consulting and market research firm,Report Ocean, revealed that the data center market was worth USD 206.2 billion in the year 2021. It is estimated to grow at a CAGR of 10.20%, earning revenue of around USD 404.9 billion by the end of 2022. The growth of the data center market is attributed to the increasing number of data centers due to rising investment by the government as well as large enterprises into IT infrastructure along with the rapid shift of businesses towards a cloud environment. Furthermore, the rising penetration of 5G and the adoption of advanced technologies such as AI, IoT, machine learning, big data, etc., is also propelling the growth of the data center market. However, high risks of hacking and cybersecurity threats may act as a huge restraining factor for the market growth.

Rising Demand Among SMEs is Propelling the Growth of the Data Center Market

The data center market is segmented into large enterprises and small & medium enterprises, based on enterprise. The large enterprise's segment holds the highest share in the market owing to the rising integration of advanced business tools such as data analytics and big data, which influences their need for storage of large volumes of data being generated every day. As a result, multinational corporations often opt for enterprise data centers with advanced data security, which acts as a major driving factor for this segments growth.

Increasing Adoption of Advanced Technologies is Supporting the Data Center Market Growth

The increasing penetration of data-generating devices such as smartphones, wearable devices, IoT sensors, remote patient monitoring devices, along with the adoption of advanced technologies such as artificial intelligence, machine learning, big data, etc., is significantly propelling the growth of the data center market. The businesses are deploying data analytical tools to process and manage large volumes of data that can provide insights and trends regarding their business performance, market trends, the customer wants, etc., which is anticipated to drive the market growth in the forecast period.

Data Center Market - By End-User

Based on end-user, the data center market is segmented into BFSI, IT & telecom, government, energy & utilities, and others. The BFSI segment accounts for the largest market share owing to the increasing dependence on internet banking and the growing penetration of online payment applications and mobile wallets. Furthermore, the need for the BFSI sector to keep its operations going 24x7 to keep the trade and economic activities going is also playing a crucial role in propelling the growth of the data center market.

Data Center Market - Regional Insights

Geographically, the data center market is segmented into North America, Europe, Asia-Pacific, Latin America, Middle-East & Africa. North America dominates the data center market. However, the Asia-Pacific region is projected to witness the highest CAGR during the forecast period. Countries like Singapore, China, India, etc., are significantly investing in the IT infrastructure and construction of new data centers to manage the ever-growing volume of data in their respective region. Furthermore, a high number of small and medium-sized enterprises and the rising adoption of cloud computing among them is also presenting lucrative growth opportunities to the data center market in the Asia-Pacific region.

Impact of COVID-19 on Data Center Market

The unprecedented COVID-19 outbreak offered significant growth opportunities to the data center market. Although the market was initially halted by the lockdown due to obstruction in the construction of data centers owing to social distancing norms and shortage of hardware components. However, the rise in the adoption of cloud computing, mainly because of the growing work from home culture and increasing popularity of mobile streaming apps is anticipated to present lucrative growth opportunities to the data center market in the forecast period.

Competitive Landscape

The leading market players of the data center market are Equinix, Digital Realty, NTT Communications, China Telecom, Telehouse/KDDI, Coresite, Verizon, Cyxtera Technologies, China Unicom, Amazon Web Services, 365 Data Centers, CoreSite Realty Corporation, CyrusOne, Inc., Lumen Technologies, Inc., DuPont Fabros Technology, Inc., SUPERNAP, QTS Realty Trust, Inc., Microsoft Corporation, and other prominent players.

The market is highly concentrated and dominated by global players such as AWS, NTT Communications, Microsoft, etc. However, the regional players are also emerging and targeting SMEs with their economic offerings to expand their market. The companies offer a wide range of services such as colocation, hardware installation and maintenance, data backup and archiving, etc., to grab a larger share in the market. Furthermore, the adoption of competitive strategies such as partnerships, mergers, acquisitions, joint ventures, etc., is also prominent in this market.

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The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the data center market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the data center market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market.