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Global Data Center Investment Trends and Growth Opportunities

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  • June 2022
  • Region: Global
  • Frost & Sullivan
  • ID: 5633443

Investments in Hyperscale Data Centers, Geographic Expansion, and Emerging Technologies Drive Future Growth Potential

Investments in data centers are increasing, even during the COVID-19 pandemic. This study provides an overview of the global data center industry, analyzing technological and investment trends shaping the industry's growth. The key factors driving growth include the rising popularity of hybrid colocation and hyperscale data centers, the emphasis on sustainability, the role of emerging technologies, and the data boom created by the proliferation of internet-enabled devices. The study’s analysis is segmented by type (colocation, hyperscale cloud, and enterprise) and region (Asia-Pacific, the Americas, and Europe, the Middle East, and Africa).

The study expects investments from leading hyperscale cloud providers to continue at a healthy pace over the forecast period from 2022 to 2031 (with 2021 as the base year). The growing need for hyperscale capacity from public cloud providers and over-the-top media content is forecast to fuel the colocation demand. The pandemic has accelerated the digital transformation of enterprises, creating higher demand for storage and compute capabilities. While data center providers invest heavily in building new capacity to meet demand, deploying emerging technologies like artificial intelligence and machine learning encourages providers to invest in new data center designs for enhanced efficiencies. Industry competition to address global requirements from carrier-neutral and telecommunication service providers has also intensified.

The advent of internet-enabled devices and industrial sensors expands data creation and, subsequently, the requirements for data transfer and storage, resulting in global investments in data centers to process and store information. There is also a wave of investments from special purpose acquisition companies and marquee investors in the industry. Private equity and sovereign wealth investors are essential to enabling data center providers to build new hyperscale facilities and acquire existing data centers. Private equity firms are keen to invest in large-scale facilities (a capacity of at least 50 megawatts) and builds in relatively new markets.

The study anticipates North America and Asia-Pacific as the most active hubs for data center growth. In 2021, North America was the largest market for data center investments. With robust data center construction and data creation activities, Asia-Pacific is expected to overtake North America by the end of 2026 and register more than 40% of the total market share. India, in particular, has strong potential to contribute to the data center industry growth.

Table of Contents

1. Strategic Imperatives
  • Why is it Increasingly Difficult to Grow?
  • The Strategic Imperative 8™
  • The Impact of the Top 3 Strategic Imperatives on the Data Center Industry
  • Growth Opportunities Fuel the Growth Pipeline Engine™
2. Technology Trends
  • Trend Overview
  • Hybrid Colocation - Cloud On-Ramps Fuel Hybrid Cloud Adoption
  • Sustainability - The Center of It All
  • Sustainability - The Center of It All
  • Energy Storage - The Li-ion Era
  • Hyperscale Growth - The Juggernaut Pushes On
  • Robotics - Next Phase of Data Center Automation
  • Robotics - Next Phase of Data Center Automation
  • Market Consolidation - M&As and JVs Are at an All-Time High
  • Edge Computing - Rise of Distributed Intelligence
  • Artificial Intelligence - Optimizing Data Center Performance

3. Growth Opportunity Analysis
  • Scope of Analysis
  • Segmentation
  • Growth Drivers
  • Growth Restraints
  • Forecast Assumptions
  • Investment Forecast
  • Investment Forecast Analysis
  • Investment Forecast by Segment
  • Investment Forecast by Region
  • Investment Forecast Analysis by Segment and Region

4. Growth Opportunity Analysis - Colocation
  • Investment Forecast
  • Investment Forecast by Data Center Size
  • Investment Forecast by Region
  • Investment Forecast Analysis
  • Investment Forecast Analysis by Region - Americas
  • Investment Forecast Analysis by Region - EMEA
  • Investment Forecast Analysis by Region - EMEA
  • Investment Forecast Analysis by Region - APAC
  • Investment Forecast Analysis by Region - APAC

5. Growth Opportunity Analysis - Hyperscale Cloud
  • Investment Forecast
  • Investment Forecast by Region
  • Investment Forecast Analysis

6. Growth Opportunity Analysis - Enterprise
  • Investment Forecast
  • Investment Forecast by Type
  • Investment Forecast Analysis

7. Growth Opportunity Universe
  • Growth Opportunity 1: Expanding Demand for Colocation
  • Growth Opportunity 2: Geographic Expansion for Revenue Acceleration
  • Growth Opportunity 3: Edge and Modular Data Centers for Latency Needs
  • Growth Opportunity 4: Capitalize on Cloud Growth for Revenue Diversification

8. Next Steps
  • Your Next Steps
  • List of Exhibits
  • Legal Disclaimer