Data Center Market SIZE & SHARE ANALYSIS - GROWTH TRENDS & FORECASTS UP TO 2030

Global Data Center Market Trends

Rising data consumption, growing number of digitalization applications, such as smart services, social networking, cashless payments, smart home automation services, and other applications drive the market's growth

• Global data consumption increased from 1.8 GB/month in 2016 to 7.6 GB/month in 2022. It is estimated to reach 26 GB/month by 2029. The growing number of digitalization applications, such as smart services, social networking, cashless payments, smart home automation services, and others, has boosted data consumption globally. A few countries, such as China and the United States, have already implemented 6G, while multiple countries are still implementing phases of 5G.
• However, in Africa, the deployment has been slow as the region plans to strengthen its 4G services first and then roll out 5G. The growing demand for online streaming services such as Netflix, Disney+, and Amazon Prime is boosting the consumption of data among users. The data consumed per smartphone increased from 1.8 GB/month in 2016 to 9.1 GB/month in 2023, which may reach 26 GB/month by 2029.
• Global data consumption is expected to grow further during the forecast period, reaching 19.2%. The leading regions in terms of data consumption are Africa, North America, and the Middle East, with 25.8%, 24.6%, and 23.9%, respectively. The increasing data consumption due to high bandwidth speeds and the growing adoption of digitalization services and IoT platforms may boost the demand for data centers globally.

Growing digitalization services such as online shopping, social networking, cab booking, digital transactions, food orders, and other services are expected to drive the market demand

• The global population was estimated at 7.91 billion in 2022, with 4.95 billion internet users and 4.62 billion active social media users. On average, global users spend around 6 hours using the internet daily. The number of users is expected to record a CAGR of 4.6% during the forecast period (2023-2029). Growing digitalization services such as online shopping, social networking, cab booking, digital transactions, food orders, and other services are expected to increase data consumption. The data consumption is expected to grow by 18.6% during the forecast period. The regions with more than 90% internet users include North America and Northern and Western Europe.
• However, Asia-Pacific leads globally in terms of the number of smartphone users. The number of smartphone users was estimated at 2,647 million in 2022, which may reach 4,456 million by 2029. The region is estimated to record a CAGR of 7.5% in terms of the number of smartphone users during the forecast period. The deployment of 5G has helped users gain access to multiple digitalization services in the region.
• The United Arab Emirates, South Korea, China, and the Netherlands are the leading countries globally, with internet speeds of 136.4 Mbps, 106.9 Mbps, 96.3 Mbps, and 94.9 Mbps, respectively. The implementation of advanced technologies in telecommunication and smart devices and the growing number of people using digitalization services are expected to drive the growth of the global data center market in the future.

OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT

Segment Analysis: Data Center Size

Mega Segment in Data Center Market

The mega data center size segment dominates the global data center market segmentation, holding approximately 33% market share in 2024, with an IT load capacity of around 15,152 MW. These facilities, containing more than 15,000 servers and spread across large areas, are primarily concentrated in the United States and Canada, with North America accounting for over 30% of the mega data center deployments. The power capacity of these facilities ranges from 10 MW to 100 MW, enabling organizations to access large amounts of internet and industrial internet data at high speed and bandwidth. Asia is expected to account for nearly 36% of the market, while Europe may account for approximately 18% during the forecast period, driven by the growing usage of cloud services for data storage and the increasing adoption of digital transformation initiatives across these regions.

Massive Segment in Data Center Market

The massive data center size segment represents the second-fastest growing segment in the market, projected to grow at approximately 10% during 2024-2029. This growth is primarily driven by the increasing usage of hyperscale facilities and cloud services across various regions. The segment's expansion is particularly notable in regions like North America, where the United States contributes more than 85% of massive data center deployments. The growth is further supported by major operators like Digital Realty Trust Inc. and DataBank, who continue to invest in massive data center facilities. The segment is witnessing significant developments in Europe and Asia-Pacific regions, with providers focusing on expanding their massive data center footprint to meet the rising demand for cloud computing and digital services.

Remaining Segments in Data Center Size Market

The large, medium, and small data center segments each serve distinct market needs and continue to play crucial roles in the overall data center infrastructure. The large segment caters to enterprises requiring substantial computing power but not at the scale of mega or massive facilities. Medium-sized data centers are particularly prevalent in developing economies, offering a balanced approach to data center deployment with more manageable operational costs. The small segment primarily serves local businesses and organizations with modest data processing needs, providing cost-effective solutions for companies that don't require extensive infrastructure. These segments collectively offer a diverse range of options for businesses of varying sizes and requirements, contributing to the market's overall growth and development.

Segment Analysis: Tier Type

Tier 3 Segment in Data Center Market

The Tier 3 segment dominates the global data center services market, holding approximately 63% market share in 2024. This significant market position is driven by the segment's comprehensive redundancy capabilities and high availability, with facilities designed to have no more than 1.6 hours of unplanned downtime per annum. Europe leads the market with substantial Tier 3 certified facilities, particularly in the United Kingdom where Slough and Greater London comprise major shares. The segment's growth is further supported by growing urbanization and greater digital penetration in emerging markets such as India and Indonesia. In India, there are around 692 million active internet users, while Indonesian banks have consistently increased their data center budgets annually, particularly focusing on Tier 3 facilities to support their expanding e-commerce sector.

Tier 4 Segment in Data Center Market

The Tier 4 segment is experiencing the most rapid growth in the data center colocation market, projected to grow at approximately 16% CAGR from 2024 to 2029. This remarkable growth is primarily driven by the segment's superior uptime guarantee of 99.995% per year, translating to less than 0.5 hours of downtime annually. The growth is particularly strong in regions with robust submarine cable deployments, which are boosting hyperscale colocation growth. The increasing adoption of cloud and digital services among regional end-user industries is expanding the scope of the B2B cloud computing service market, which in turn is boosting opportunities for Tier 4 hosting with hyperscale construction. The segment's growth is further supported by the rising demand for fault tolerance and complete redundancy for every component.

Remaining Segments in Tier Type

The Tier 1 and 2 segment represents the basic level of data center infrastructure, offering single paths for power and cooling with few redundant and backup components. These tiers primarily cater to small and medium enterprises with minimal IT load requirements and basic uptime needs. While this segment maintains a presence in the market, particularly in developing regions and for organizations with less critical operations, it sees minimal growth compared to higher tiers. The segment's role remains important for businesses requiring cost-effective solutions without the need for advanced redundancy and uptime guarantees, though the market increasingly favors higher tier classifications for more critical operations.

Segment Analysis: Absorption

Utilized Segment in Data Center Market

The utilized segment dominates the global data center market, accounting for approximately 77% of the total IT load capacity in 2024. This segment is also experiencing the strongest growth trajectory, expected to grow at nearly 12% during 2024-2029. The robust growth is primarily driven by increasing cloud adoption, with major hyperscale providers expanding their footprint across key digital markets in Europe and North America. Growing urbanization and greater digital penetration in emerging markets such as India, Vietnam, and Indonesia are also fueling the segment's expansion. The segment benefits from strategic discounts, with approximately 10% reduction in costs available for larger hyperscale cloud providers and enterprise users in the United States. The increasing trend toward renewable energy adoption is becoming a key focus area, exemplified by initiatives like Sweden's 'Node Pole' data center located near the North Pole, which leverages free cooling and hydroelectric power for green data center operations. The segment's growth is further supported by the rising utilization rates, which are expected to reach 81.1% by 2029, reflecting the increasing demand for data center services across various industries.

Non-Utilized Segment in Data Center Market

The non-utilized segment represents the available capacity in data centers that remains unused or reserved for future expansion. This segment plays a crucial role in ensuring data centers maintain sufficient headroom for unexpected demand spikes and future growth requirements. The segment is characterized by strategic capacity planning, where operators maintain a balance between current utilization and future scalability needs. Data center operators typically maintain this buffer capacity to accommodate rapid deployment requirements from hyperscale customers and enterprise clients. The segment is influenced by factors such as regional market maturity, local demand patterns, and infrastructure readiness. Private equity funds are actively promoting new data center projects across various regions, particularly in previously under-served markets including Poland, Spain, Portugal, and Italy. The segment also reflects the industry's focus on sustainable growth, with operators carefully managing their expansion plans to align with actual market demand while maintaining operational efficiency.

Data Center Market Geography Segment Analysis

Data Center Market in United States

The United States continues to maintain its position as the global leader in the data center markets, commanding approximately 35% of the global data center capacity in 2024. The country's dominance is particularly evident in Northern Virginia, which has emerged as the largest data center hotspot, leveraging its densely packed fiber backbones and strategic location. The market's strength is further reinforced by comprehensive tax benefits, with the American Society of Professional Estimators attributing 82-85% of initial capital investment to these advantages. The United States demonstrates remarkable infrastructure readiness, with tax exemptions for qualifying computer equipment purchases by data centers meeting statutory investment and employment requirements. Virginia's pioneering move to extend sales tax exemption benefits to data center colocation tenants has set a precedent for other states. The country's data center landscape is characterized by robust connectivity infrastructure, with Virginia Beach serving as the landing point for four new transoceanic fiber connection cables, enhancing international connectivity capabilities.

Data Center Market in United Arab Emirates

The United Arab Emirates is experiencing unprecedented growth in its data center sector, with a projected CAGR of approximately 15% from 2024 to 2029. The country's emergence as a digital infrastructure hub is supported by its comprehensive regulatory framework, including the establishment of the Office of Data Protection in 2017 and subsequent amendments aligned with global standards. The UAE's commitment to digital transformation is evident through its robust certification ecosystem, encompassing ANSI/TIA-942, ISO/IEC-24762, and various other international standards. The country's strategic approach to data center development is further enhanced by its Special Economic Zones (SEZs) framework, allowing each Emirate to open sectors deemed strategic for diversification. The UAE's data center landscape benefits from significant foreign investment opportunities, with 100% foreign ownership permitted and long-term renewable land access leases. The country's positioning as a regional tech hub is strengthened by complete exemption from taxes, customs, and commercial levies, making it an attractive destination for global data center colocation operators.

Data Center Market in China

China has established itself as a powerhouse in the global data center landscape, particularly notable for its computing capabilities and infrastructure development. The country's data center sector is characterized by its strong focus on technological advancement and innovation, with significant investments in hyperscale facilities. China's approach to data center development is closely aligned with its national digital transformation agenda, emphasizing sustainable growth and energy efficiency. The market benefits from comprehensive government support through various initiatives and policies designed to promote digital infrastructure development. The country's data center ecosystem is particularly strong in major metropolitan areas, with strategic deployments across different regions to ensure optimal coverage and performance. China's commitment to technological sovereignty has led to the development of advanced facilities capable of supporting the growing demands of its digital economy. The market is further strengthened by robust connectivity infrastructure and a growing emphasis on green energy solutions for data center operations.

Data Center Market in United Kingdom

The United Kingdom maintains its position as a crucial European data center hub, with London serving as a primary focus for infrastructure development. The country's data center landscape is characterized by its sophisticated infrastructure and strategic importance in the FLAP-D (Frankfurt, London/Slough, Amsterdam, Paris, Dublin) metro markets. Despite higher land costs in London, averaging around USD 150 per square foot, the market continues to attract significant investments due to its robust connectivity infrastructure and mature digital ecosystem. The UK's data center sector benefits from advanced technological capabilities and a strong emphasis on sustainability, with many facilities transitioning to renewable energy sources. The market is supported by a comprehensive regulatory framework and strong data protection standards, making it attractive to global operators. The country's data center infrastructure is particularly notable for its high-speed connectivity options and diverse range of colocation services, catering to various business requirements and technological needs.

Data Center Market in Other Countries

The global data center landscape extends well beyond the major markets, with significant developments across various regions. Countries like Germany, France, Singapore, and Japan have established themselves as important regional hubs, each offering unique advantages and specializations. Emerging markets in countries such as India, Indonesia, and Brazil are experiencing rapid growth, driven by increasing digital adoption and favorable government policies. The Nordic region, including countries like Norway and Sweden, is gaining prominence due to its natural cooling advantages and renewable energy availability. Countries in the Middle East, such as Saudi Arabia and Qatar, are making substantial investments in digital infrastructure, while nations like South Korea and Australia are focusing on technological innovation and sustainability. Each market brings its own set of advantages, whether it's Ireland's favorable business environment, Singapore's strategic location, or Malaysia's growing digital economy, contributing to the diverse and dynamic global data center ecosystem.

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