Phoenix Data Center Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2019 - 2022 |
| CAGR | 18.50 % |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Phoenix Data Center Market Analysis
The Phoenix Data Center market is valued at 606.54MW in the current year and is expected to reach a CAGR of 18.5% during the forecast period to 1933.41MW by the next five years. A data center is a specific area inside a structure or a collection of designs that house computer systems and related equipment, such as networking and storage systems.
- Greater Phoenix is an appealing location for data center development. The region's steady electricity supply and minimal proclivity for natural calamities translate into user dependability. Service stability and continuity are critical for enterprises where interruptions can cost millions of dollars or risk lives depending on the operation.
- Phoenix rounded out the top five, with $482 million in sales during the decade under consideration. Across the deals we looked at, data center space traded in the market totaled 3.2 million square feet. Notably, the Arizona market has been a popular choice for investors seeking an alternative to California. Phoenix has become a data center destination in its own right for operators wishing to construct a hub that serves the West Coast, with significantly reduced development and operational costs, tax benefits, and relatively lower disaster risk.
- Increased investor interest in data centers is driven by a strong desire for data, propelled by continuous development in cloud computing and social media and the introduction of new technologies such as 5G and driverless vehicles. Greater Phoenix has seen increased data center development for various reasons, including improved data demand.
- Real estate prices in Phoenix have surged due to scarcity of adequate land, increased demand from other businesses, and zoning constraints. As a result, land and construction costs have risen significantly, making it harder for data center operators to obtain a satisfactory return on investment.
- However, the pandemic resulted in higher network and internet traffic as a result of the work-from-home culture, more internet-based activities, and social media usage. While timelines and schedules are shrinking, data center projects are growing.
Phoenix Data Center Market Trends
Cloud computing is anticipated to hold a significant share
- The growing adoption of cloud applications, artificial intelligence (AI), and big data is driving the demand for data center construction. As more businesses and organizations shift their operations to the cloud, they require larger and more advanced data centers to support their needs.
- According to Oracle, a new Oracle Cloud Infrastructure (OCI) region will formally begin operations in Chicago in December 2022. The new region, Oracle's fourth in the US and 41st overall, is a public cloud region. The company also operates two general United States Government regions, three Department of Defense-specific United States Government regions, several United States National Security regions, a TikTok plant in Texas, and areas in Ashburn, Virginia, Phoenix, Arizona, and San Jose, California.
- For instance, the National Science Foundation launched the AI Research Institutes program in 2020. Since then, USD 360 million has been distributed to 18 colleges in 40 states through this program. An ecosystem-based strategy can generate AI ideas and bring AI entrepreneurs to market. US federal agencies proposed USD 1.7 billion for non-defense AI research and development in fiscal year 2022. According to the National Security Commission for AI, non-defense-related AI research and development should get 32 billion USD each year by 2026. This is likely to enhance the region's demand for Data Centres.
- Furthermore, the increasing need for data privacy and security drives the demand for data centers. With the rise in cyber threats and data breaches, businesses and organizations are seeking secure and reliable data storage and processing solutions, which advanced data centers can only provide.
- The growth of cloud applications, AI, and big data drives the demand for advanced data centers. As businesses and organizations increasingly rely on these technologies to support their operations, the demand for data center construction is expected to grow. This presents a significant opportunity for businesses and investors looking to enter the data center market.
Rising Adoption of Hyperscale Data Centers
- The rising adoption of hyperscale data centers is a significant driver of the data center construction market. Hyperscale data centers are large-scale facilities that are designed to support the massive amounts of data processing and storage required by modern businesses and organizations.
- For instance, in May 2023, As Prime Data Centres prepares to build its first facilities in the market, new hyperscale data centers are heading to metro Phoenix. The business intends to invest $2 billion in constructing a 210-megawatt, five-building campus in Avondale, Arizona, spanning 1.3 million square feet.
- Further, Aligned Data Centres, a leading technology infrastructure company providing innovative, sustainable, and adaptive Scale Data Centres and Build-to-Scale solutions to global hyperscale and enterprise customers, announces its planned development of PHX-05, a new data center on its flagship hyperscale campus in Arizona. The greenfield deployment is expected to match an aggressive construction timeframe in response to increased capacity demands and hyperscalers in the greater Phoenix region's interest in Aligned's intelligent and adaptable infrastructure solutions.
- The deployment of hyperscale data centers will likely increase in the future years, fuelling data center demand. This is a substantial potential for firms and investors looking to enter the data center sector, particularly in locations where cloud-based services and applications are in high demand.
Phoenix Data Center Industry Overview
The Phoenix Data Center Market is fragmented in that key vendors are utilizing inorganic growth techniques, such as mergers and acquisitions and strategic partnerships, to increase their market share. Some of the players as Digital Realty Trust, Inc., DataBank, Cyrus One, Cyxtera Technologies, Inc., and Cogent.
In May 2023, as Prime Data Centres prepares to build its first facilities in the market, new hyperscale data centers are heading to metro Phoenix. The business intends to invest $2 billion in constructing a 210-megawatt, five-building campus in Avondale, Arizona, spanning 1.3 million square feet. The first facility, which will offer 42 megawatts of vital IT power, is scheduled to open in the third quarter of 2025.
Also May 2023, QTS commenced building on its PHX2 DC5 data center in Phoenix, Arizona. The company reportedly broke ground on the plant in March; it would stretch 337,330 sq ft (31,339 sqm) on 85 acres and have a capacity of 42 MW. This is the first of a projected 280MW+ multi-building campus of data centers.
Phoenix Data Center Market Leaders
Digital Realty Trust, Inc.
DataBank
CyrusOne
Cyxtera Technologies, Inc.
Cogent
*Disclaimer: Major Players sorted in no particular order
Phoenix Data Center Market News
- November 2022: STACK Infrastructure Plans Massive New Data Centre Campus in Downtown Phoenix. STACK Infrastructure will build a 230-megawatt campus with 1.78 million square feet of data centers, continuing the developer's global expansion. This 50-acre campus will help meet the demand for cloud capacity in the rapidly growing Phoenix market.
- October 2022: Aligned Data Centres increased its commitment in Arizona by acquiring two more plots of land in Phoenix, expanding its data center sustainability strategy. With new site acquisitions for a sustainable Phoenix mega campus, Aligned continues to take advantage of Arizona's tax breaks and low prices.
Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. KEY INDUSTRY TRENDS
4.1 Smartphone Users
4.2 Data Traffic per Smartphone
4.3 Mobile Data Speed
4.4 Broadband Data Speed
4.5 Regulatory Framework
4.6 Value Chain Analysis
5. MARKET OUTLOOK
5.1 IT Load Capacity
5.2 Raised Floor Space
5.3 Number of Racks
6. MARKET SEGMENTATION
6.1 By DC Size
6.1.1 Small
6.1.2 Medium
6.1.3 Large
6.1.4 Massive
6.1.5 Mega
6.2 By Tier Type
6.2.1 Tier 1 & 2
6.2.2 Tier 3
6.2.3 Tier 4
6.3 By Absorption
6.3.1 Utilized
6.3.1.1 By Colocation Type
6.3.1.1.1 Retail
6.3.1.1.2 Wholesale
6.3.1.1.3 Hyperscale
6.3.1.2 By End User
6.3.1.2.1 Cloud & IT
6.3.1.2.2 Telecom
6.3.1.2.3 Media & Entertainment
6.3.1.2.4 Government
6.3.1.2.5 BFSI
6.3.1.2.6 Manufacturing
6.3.1.2.7 E-Commerce
6.3.1.2.8 Other End User
6.3.2 Non-Utilized
7. COMPETITVE LANDSCAPE
7.1 Company Profiles
7.1.1 Digital Realty Trust, Inc.
7.1.2 DataBank
7.1.3 PhoenixNAP
7.1.4 CyrusOne
7.1.5 Cyxtera Technologies, Inc.
7.1.6 Vantage Data Center
7.1.7 Iron Mountain
7.1.8 Cyxtera Technologies, Inc.
7.1.9 Expedient
7.1.10 Evocative
7.1.11 Flexential
7.1.12 Evoque
7.1.13 H5 Data centers
7.1.14 Cogent
7.1.15 EdgeCore
7.1.16 EdgeConneX, Inc.
7.2 Market share analysis (In terms of MW)
7.3 List of Companies
Phoenix Data Center Industry Segmentation
A data center is a physical room, building, or facility that holds IT infrastructure used to construct, run, and provide applications and services and store and manage the data connected with those applications and services.
The Phoenix Data Center Market is segmented by DC Size (Small, Medium, Large, Massive, Mega), Tier Type (Tier 1&2, Tier 3, Tier 4), Absorption (Utilized (Colocation Type (Retail, Wholesale, Hyperscale), End User ( Cloud & IT, Telecom, Media & Entertainment, Government, BFSI, Manufacturing, E-Commerce)), and Non-Utilized).
The market sizes and forecasts are provided in terms of value (MW) for all the above segments.
Frequently Asked Questions
What is the current Pheonix Data Center Market size?
The Pheonix Data Center Market is projected to register a CAGR of 18.5% during the forecast period (2024-2029)
Who are the key players in Pheonix Data Center Market?
Digital Realty Trust, Inc., DataBank, CyrusOne, Cyxtera Technologies, Inc. and Cogent are the major companies operating in the Pheonix Data Center Market.
What years does this Pheonix Data Center Market cover?
The report covers the Pheonix Data Center Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Pheonix Data Center Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Phoenix Data Center Industry Report
Statistics for the 2024 Phoenix Data Center market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Phoenix Data Center analysis includes a market forecast outlook to for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
