Cloud Providers’ Investment to Magnify Global Data Center Market by 2025


Frost & Sullivan’s recent analysis, increased investment by Cloud and Colocation Providers Drives the Global Data Center Market, finds that continued high levels of technology deployment worldwide will result in a proliferation of data created, driving the need for data processing and storage capacity. The result will be the construction of large volumes of data centers, ranging from enterprise to large-scale cloud. Frost & Sullivan forecasts $432.14 billion will be invested in the data center market by 2025, up from $244.74 billion in 2019, a CAGR of 9.9%. Increased investments by data center operators, increased deployment and usage of IoT and Big Data, the adoption of a hybrid model with cloud and traditional data centers, and strong growth in emerging economies will serve as key market drivers. The Asia-Pacific region will become the largest market by 2025, followed by North America and EMEA.

Manoj Shankar, Research Analyst, Energy & 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 added: “Onsite cloud data centers 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 centers and competitive pressures, modular data center manufacturers need to innovate in this space and come up with advanced concepts that allow additional flexibility and modularity.”

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

  • Edge Computing
  • Artificial Intelligence
  • New Capabilities
  • Geographic Expansion and Partnerships

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