The 21st century is witnessing a data revolution. Most industries including automotive, manufacturing, food & beverages, healthcare, pharmaceutical, telecommunications, retail, aerospace and defense, oil and gas, and banking, financial services, and insurance (BFSI) are generating colossal amounts of data at a rapid pace, which they also depend on to expand their business. This massive increase in data is a consequence of technical innovations in fields such as cloud computing, artificial intelligence (AI), Internet of Things (IoT), machine learning (ML), business intelligence (BI) and big data. Processing huge amounts of data require secure, scalable, reliable, and fast data storage and retrieval techniques. This has catalyzed the establishment of data centers throughout the globe. The next-generation data centers market registered a market size of $29.73 billion and is set to grow at a CAGR of 16.1% during the forecast period from 2018 to 2023. By 2023, the Next Generation Data Center Market is projected to surpass the market value of $62 billion. The World Economic Forum report on daily data generation suggested that 2.5 quintillion bytes of data are produced daily, and 90% of this has been produced in the last two years. The data generated on a daily basis requires appropriate infrastructure for storing, filtering, and analyzing it. Thus, the market for the Next-Generation Data Center is estimated to experience substantial demand.
Internet of Things: A Megatrend Transforming Next-Generation Data Centers
With an increase in the number of IoT devices in use, the volumes of data generated will be enormous. This will also give rise to a need for secure and private ecosystems storing and analyzing data. It is expected that the application of 5G IoT devices in data centers will considerately enhance the overall speed of operations within data centers. Along with speed, the IoT sensors will also optimize data flow, storage equipment, and access capabilities of a data center. Datacenter providers are investing in research and development activities to integrate automation with existing processes. With process automation, the routine tasks of data centers such as monitoring, patching, scheduling, configuring, and updating can be managed remotely through smart IoT devices. Moreover, energy management in data centers can be monitored with IoT devices, resulting in environmentally sustainable data centers.
Natick Northern Isles: The World’s First Underwater Datacenter by Microsoft
Through leveraging submarine technology, Microsoft has deployed an underwater data center project called Project Natick. The project aims to comprehend the feasibility and manageability of underwater datacenters powered by offshore renewable energy. The company deployed its first full-scale subsea datacenter in 2018 in the North Sea. The accomplishment of this project can open new doors for application areas in the next-generation data center market. Also, this data center can remarkably improve the Internet speed and reliability provided on the cloud servers, especially in coastal areas. Success with this project can pave the way for the establishment of environmentally sustainable datacenters which will dramatically transform the business landscape in the global next-generation data center market.
Telecom and Information Technology Segments to Portray the Maximum Growth Prospects
The next-generation data centers market generated revenues worth $10.75 billion in 2018. With the exponential growth of data in the form of voice, text, image, and other media traffic, the telecom and IT segments are collectively poised to generate $23.65 billion by 2023, growing at a CAGR of 17.08% during the forecast period. The IT industry is considered as the backbone of the data centers market, as the industry employs data centers for processing, storage, and visualization of data.The telecom industry is also a major contributor to the market with the Global Systems for Mobile Communication (GSMA) reporting that the number of unique mobile subscribers has surpassed 5 billion units globally in 2018. With such an increase in the number of mobile subscribers, the telecom industry will witness immense voice traffic which further will require huge numbers of data centers to store audio data, which will subsequently support the next-generation data center market growth.
APAC to Exhibit Unprecedented Growth of 109.47%
North America was the most lucrative region in the global next-generation data center market, with the region generating market revenues worth $15.92 billion in 2018. It is set to grow at a CAGR of 64.39% during the forecast period. The faster implementation of technological advancements and the presence of a large number of service-oriented enterprises are projected to augment the market value to $50 billion by 2023. The region is home to the world’s largest and most advanced data center, termed as “The Citadel”. This technological fortress is spread over 7.2 million square feet in Nevada and is responsible for the maximum contribution to the North American next-generation data center market. However, the APAC region is anticipated to register an incredible CAGR of 109.47% during the forecast period. The region generated $5.26 billion in 2018, which is expected to reach $212 billion by 2023. The utility of Enterprise software application in the Asia-Pacific subcontinent is evolving with increased adoption of micro-services and software services coupled with Dev/Ops culture of frequent and radical software development. Growth in the APAC region is certain because of the presence of countless software companies in rapidly developing economies such as India, China, and Japan.
Next-Generation Data Center Market Competitive Landscape
Companies influencing the next-generation data center market are Accenture plc, Cisco Systems Inc., Dell Technologies Inc, Digital Realty Trust Inc, Fujitsu Ltd., HCL Technologies Limited, Hewlett-Packard Enterprise, IBM Corp., Google Inc., Microsoft Corporation, NextGen Datacenter & Cloud Technologies Private Limited, Amazon Web Services, and Global Switch Limited. Global Switch is the leading operator, developer, and owner of cloud-neutral multi-tenanted data centers in APAC and Europe. The company provides reliable, scalable and secure data centers to clients across various end-user industries such as healthcare, IT, telecom, and education sector. In 2018, a consortium of six private investors and Asian institutions acquired 24.99% of the company’s stake in a deal of $2.8 billion. This is a mere indication of the value that the next-generation data center market holds. Considering the exponential rise in data, mergers and acquisition in the next-generation data center market are imperative as enterprises are looking forward to partner with advanced data center companies to optimize productivity and efficiency within their business processes.
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