Hyperscale Data Center Market Analysis by Solution (Software, Storage, and Server); by User Type (Cloud, Colocation, and Enterprise); and by Industry (IT and Telecom, BFSI, Government, Energy, and Utilities, Retail & Manufacturing, Healthcare, and Others) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035
Buy Now Report ID: 4912 | Published Date: May 02, 2023
Hyperscale Data Center Market size is estimated to reach ~USD 1786.7 Billion by the end of 2035 by growing at a CAGR of ~29.32% over the forecast period, i.e., 2023 – 2035. In addition to this, in the year 2022, the market size of the hyperscale data center market was ~USD 81.67 Billion. The growth of the market can be attributed to the growing volume of digital businesses worldwide owing to augmenting investment in digital transformation together with the rising need for data centers to enhance productivity, reduce operational costs and increase customer experiences. For instance, as per estimations, the direct digital transformation investment is anticipated to hit nearly USD 7 trillion with a CAGR of 18% from 2020 to 2023 as companies have been strategizing & investing to become future enterprises that are digital at scale.
Furthermore, factors that are believed to fuel the market growth of hyperscale data centers include the unprecedented growth in storage demand, driven by the increasing amount of video-intensive content, collaboration, multi-generational investments, and many other digital transformation applications together with developing infrastructure that is scalable and can maintain a high level of security. For instance, Broadcom Inc., the market leader in hyperscale video storage connectivity, in October 2022 announced the expansion of its silicon, software, and hardware storage connectivity products with enhanced performance, capabilities, and power. This expanded product portfolio is intended to aid hyperscale data centers to manage and maintain the storage connectivity they need to deliver video storage at scale. Additionally, the growing demand for hyperscale data centers over enterprise data centers by large companies owing to its economies of scale and custom engineering is predicted to present the potential for market expansion over the projected period.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~29.32% |
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Base Year Market Size (2022) |
~ USD 81.67 Billion |
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Forecast Year Market Size (2035) |
~ USD 1786.7 Billion |
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Regional Scope |
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Growth Drivers
Challenges
The global hyperscale data center market is segmented and analyzed for demand and supply by user type into cloud, colocation, and enterprise. Out of the three types of users hyperscale data centers, the cloud segment is estimated to gain the largest market share of about ~58% in the year 2035. The growth of the segment can be attributed to the rising growth in the field of cloud computing as it facilitates data backup, disaster recovery, software development and testing, big data analytics, and many other advantages to large and small enterprises worldwide. For instance, it was observed that cloud computing spending rose by ~35% year-over-year in 2021. The spending in 2020 was recorded to be around USD 140 billion whereas it reached around USD 191.5 billion in 2021. Moreover, over 50% of enterprises are expected to use industry cloud platforms to accelerate their business initiatives by 2027. Hence, all these factors are anticipated to boost the segment growth in the upcoming years.
The global hyperscale data center market is also segmented and analyzed for demand and supply by solution into software, storage, and server. Amongst these three segments, the server segment is expected to garner a significant share of around ~46% in the year 2035, owing to the increasing focus placed by digital businesses on achieving optimized workload management with speed, agility, and security without having to deal with the challenges of training, integration and deployment, support, and maintenance. This, as a result, is anticipated to create numerous opportunities for the growth of the segment in the coming years.
Our in-depth analysis of the global hyperscale data center market includes the following segments:
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By Solution |
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By User Type |
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By Industry |
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The market share of hyperscale data centers in North America, amongst the market in all the other regions, is projected to be the largest with a share of about ~35% by the end of 2035. The growth of the market can be attributed majorly to the growing digitalization in the region as well as the strong existence of companies with the broadest data center footprint together with the increasing investment in advanced technologies in the North American region. It was found that over 50% of the world's hyperscale data centers were located in the U.S. in 2021. Moreover, the base of many large bid-data producing companies, including Microsoft, Amazon, Google, IBM, and Meta along with their expanding facilities of cloud provision is further expected to boost the market growth.
The Asia Pacific hyperscale data center market is estimated to be the second largest, registering a share of about ~24% by the end of 2035. The growth of the market can be attributed majorly to the growing base of big data-producing companies in the region together with the rising need to store, manage and process these vast volumes of data. As per research, it was found that in 2021, China was the next biggest contributor to hyperscale data center capacity after the US across the globe, and accounted for nearly 15% of the overall hyperscale data centers operated in that year.
Further, the market in Europe, amongst the market in all the other regions, is projected to hold a majority of the share by the end of 2035. The increasing investment in the field of technology as well as the growing development of IT infrastructure to promote digital transformation and growth of the region besides the rise in the number of data centers is estimated to boost the regional market growth in the upcoming years.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Abhishek Verma, Hetal Singh
Ans: The increasing digital transformation of businesses, as well as the increasing adoption of technologies such as big data, cloud computing, AI, and others with prospering data centers, are the major factors driving the market growth
Ans: The market size of hyperscale data centers is anticipated to attain a CAGR of ~29.32% over the forecast period, i.e., 2023 – 2035.
Ans: The need for a huge amount of capital investment as well as high reliability on automation are estimated to be the growth hindering factors for the market expansion.
Ans: The market in the North American region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Ans: The major players in the market are Chindata Group, NVIDIA Corporation, Yotta Infrastructure, Amazon.com, Inc., SanDisk Corporation, and Hewlett Packard Enterprise Company.
Ans: The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue-generating capacity, and the new products being launched into the market by the company.
Ans: The market is segmented by solution, user type, industry, and by region.
Ans: The cloud segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
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