$432bn to go into data centre construction

Continued high levels of technology deployment worldwide will result in a proliferation of data created, driving the need for data processing and storage capacity.

By João Marques Lima

Founder and Editor, The Tech Capital

3 Mins

February 10, 2021 | 12:29 PM GMT

As much as US$432.14 billion will be invested in the data centre market by 2025, up from $244.74 billion in 2019, a CAGR of 9.9%, Frost & Sullivan forecasts.

Increased investments by data centre operators, increased deployment and usage of IoT and Big Data, the adoption of a hybrid model with cloud and traditional data centres, and strong growth in emerging economies will serve as key market drivers. 

The think tank also says that the Asia-Pacific region will become the largest market by 2025, followed by North America and EMEA.

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Edge computing, 5G revolution, and the increasing adoption of artificial intelligence (AI) will drive data centre activity, providing tremendous opportunities to its market participants, such as:

•          Edge Computing: Connected devices, connected living/homes, AI, gaming and video streaming, autonomous cars, and virtual and augmented reality will propel edge data centers.

•          Artificial Intelligence: Surging AI usage in data centers will lead to demand for advanced electronics and specialists in AI-based solutions for data center applications and architecture.

•          New Capabilities: As data processing takes place close to the source, the processing time reduces. This will augument technologies like autonomous vehicles, smart devices and sensors, augmented reality, etc.

•          Geographic Expansion and Partnerships: Market participants need to focus on high-growth, emerging markets, like India and Southeast Asia, where data creation is still in the nascent stage and data center construction in its infancy. Similarly, partnerships with colocation and cloud service providers will give equipment manufacturers access to new data center construction markets, providing them the much-needed boost.

Manoj Shankar, research analyst, energy and environment practice, Frost & Sullivan, said: “The move from enterprise to cloud and colocation data centers will gain momentum because companies can reduce capital and operational costs by avoiding investments in hardware or software infrastructure and reducing maintenance and space requirements. 

“Additionally, 5G will move processing closer to the point of data collection, leading to increased deployment of micro and edge data centers and driving investments in new and next-generation data center technologies.”

Shankar continued to explain that onsite cloud data centres will become crucial as companies will require critical data to be kept in-house or at a nearby location, thereby lessening the security risks such as data theft. 

“Further, given the high demand for modular data centres and competitive pressures, modular data centre manufacturers need to innovate in this space and come up with advanced concepts that allow additional flexibility and modularity,” he added.


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João Marques Lima

Founder and Editor, The Tech Capital

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