Product Code: 66976
The hyperscale datacenter market is expected to grow at a CAGR of 24.25% over the forecast period (2020-2025). Hyperscale datacenters can be termed as a facility owned by the companies to offer cloud spaces for cloud computing and big data storage. It has at least 500 storage cabinets covering 10,000 Sq. Ft of space and has over 5,000 servers conected with an ultra-high-speed fiber network and offers with infrastructural cost to the end-user.
Over the years, there has been immense growth in the data center adoption across the industries for leveraging the power of cloud computing and adapt to the high volume of data generation. But the underutilization has been an issue in these datacenters, according to a study by James Hamilton, the power distribution and cooling systems cause 82% of the overall data center infrastructural cost. Advent to this, the underutilization of data center space cost the company with high CAPEX value. Recently, the larger-scale organizations have been emphasizing on reducing their CAPEX and OPEX, which is driving the adoption of hyperscale datacenters worldwide.
Moreover, Cisco has stated that the cloud data center traffic is expected to reach 19.5 zettabytes per year by 2021, while the traffic from the cloud will account for 95% of the overall datacenter traffic by the same year along with the increase in the big data and cloud computing across the industries. This is another significant factor fueling the hyperscale datacenter market.
However, the IT hyperscale infrastructure is very massive, which makes the traditional methods data traffic flow monitoring insufficient and are not cost-effective at the hyperscale level. Hence, the infrastructural and operational challenges for the companies is somewhere restricting the growth of the hyperscale datacenters market.
Scope of the Report
The scope of the study for hyperscale datacenter market has considered the companies offering hyperscale datacenters built by their own as well the IT hardware offering companies like IBM and Cisco offering hyperscale data centers for a wide range end-users across verticals globally.
Key Market Trends
IT & Telecommunication Industry to Hold Largest Market Share
- IT organizations are inclining towards offering cloud-based services such as PaaS, IaaS, and SaaS to support business operations. The cloud-based services provide flexibility and ease of operations to lead the faster adoption of their offerings and are expected to grow further in the forecast period. The companies offering SaaS have been continuously making strategic partnerships with cloud providers to offer better customer offerings.
- For instance, in April 2019, Melius Group entered into a partnership with Cobalt iron to provide its Adaptive Data Protection SaaS solution to customers in Ireland and the UK. With the partnership, the company has planned for providing SaaS with reduced cost with complying all the levels of compliance and legislation requirements.
- Further, the increase in the number of smartphone and internet users across the world is estimated to fuel the adoption of hyperscale datacenters in the telecommunication industry. According to the World Internet Stats, the global internet users in 2018 grew by over 8% to reach 4.20 billion users from the previous year.
- Further, the telecommunication companies are strategically making moves to offer cheaper subscription plans to gain market share. Virgin Mobile introduced its yearly subscription plan to reduce the customer's bill by 50% by providing three-month complimentary access to Netflix content, such initiatives resulting increase in data generation and storage infrastructure requirement and are expected to drive hyperscale datacenter adoption.
North America Region to Dominate the Market
- The overall GDP of the United States is over USD 18 trillion, in which digital economy contributes over 7.1% to it. By the end of 2018, this digital economy included over 345.66 million internet user in the country. Also, the data center industry in the region is significantly growing due to rapidly increasing IT and Telecommunication industry. According to the Cloudscene, the region consists of total 2,647 data centers, of which only 204 data centers are in Canada.
- The companies in the region are extensively investing in AI infrastructure, which demands the need for immediate processing of the vast amount of data being acquired on a real-time basis. Also, the governments in the region are taking initiatives to adopt upcoming technologies. In February 2019, the US government announced the Artificial Intelligence Initiative to prioritize AI investments in research and development, increase access to federal data and models for that research and prepare workers to adapt to the era of AI.
- Moreover, the US government has started the Data Center Optimization Initiative (DCOI) to deliver better services to the public while increasing return-on-investment to taxpayers by consolidating many data centers in the country. The consolidation process includes the process for building hyperscale data centers and to shut-off the underperforming ones. Till date, the government has closed over 3,215 data centers in the country.
The market for hyperscale datacenters is highly consolidated because of the dominance by a few key companies in the market. Also, the barrier for new entrants is high due to the requirement of the high initial cost to enter into the market. These are companies that are continuously investing in making strategic partnership and acquisition to gain more market share. Some of the recent developments by the companies are listed below.
- September 2019 - The hyperscale datacenters company AirTrunk announced the building of 20MW site in Honk Kong, China, which is expected to get completed by the end of 2020. The company mentioned that the projects are a part of its expansion plan in the Asia Pacific region.
- September 2019 - EdgeConneX, a data center solution provider, declared a partnership with Lume to leverage its Cloud Anyware services. The partnership enables the company to accomplish goals like bringing its cloud solutions to the Edge, local and highly proximate to its enterprise customers.
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Table of Contents
- 1.1 Study Assumptions
- 1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
- 4.1 Market Overview
- 4.2 Key Standards and Regulations Related to Hyperscale Datacenters
- 4.3 Technology Snapshot
- 4.4 Market Drivers
- 4.4.1 Growing Emphasis on Reduction of CAPEX & OPEX Among Large-scale Organizations
- 4.4.2 Steady Increase in Datacenter Traffic Coupled with Growth in Spending on Datacenter Technology
- 4.5 Market Challenges
- 4.5.1 Infrastructural & Operational Challenges
- 4.6 Industry Value Chain Analysis
- 4.7 Industry Attractiveness - Porter's Five Force Analysis
- 4.7.1 Threat of New Entrants
- 4.7.2 Bargaining Power of Buyers/Consumers
- 4.7.3 Bargaining Power of Suppliers
- 4.7.4 Threat of Substitute Products
- 4.7.5 Intensity of Competitive Rivalry
5 MARKET SEGMENTATION
- 5.1 By End-user
- 5.1.1 Enterprises
- 5.1.2 Colocation Providers
- 5.2 By Vertical
- 5.2.1 Media & Entertainment
- 5.2.2 BFSI
- 5.2.3 Retail & E-commerce
- 5.2.4 IT & Telecom
- 5.2.5 Other Verticals
- 5.3 Geography
- 5.3.1 North America
- 126.96.36.199 US
- 188.8.131.52 Canada
- 5.3.2 Europe
- 184.108.40.206 Germany
- 220.127.116.11 UK
- 18.104.22.168 France
- 22.214.171.124 Rest of Europe
- 5.3.3 Asia-Pacific
- 126.96.36.199 China
- 188.8.131.52 Japan
- 184.108.40.206 India
- 220.127.116.11 Rest of Asia-Pacific
- 5.3.4 Rest of the World
6 COMPETITIVE LANDSCAPE
- 6.1 Analysis Of Major Hyperscale Datacenter Operators
- 6.1.1 Amazon Web Services, Inc.
- 6.1.2 Microsoft Corporation
- 6.1.3 Alibaba Group
- 6.1.4 Alphabet Inc.
- 6.1.5 Facebook Inc.
- 6.2 Key vendor Profiles
- 6.2.1 Hewlett Packard Enterprise Co
- 6.2.2 Cisco Systems
- 6.2.3 Huawei Technologies Co.
- 6.2.4 Intel Corporation
- 6.2.5 Nvidia Corporation
- 6.2.6 Quanta Computer Inc.
- 6.2.7 IBM Corporation
- 6.2.8 Broadcom Inc.
7 INVESTMENT ANALYSIS
8 MARKET OPPORTUNITIES AND FUTURE TRENDS