Corresponding to the rising adoption of cloud computing technology in a myriad range of business verticals, data center infrastructure market has experienced phenomenal proliferation on the global scale. With organizations striving hard to capitalize on the emerging technologies, IT infrastructure modernization has indeed taken a rapid pace. Amidst this backdrop where automation characterizes the profitability landscape of IT enterprises, data center infrastructure market is witnessing a renewed dynamism. A significant testament being of ESG global survey commissioned by Dell EMC & Intel, that claimed around 81% of 4000 IT decision-makers to have agreed to the fact that if they do not adopt IT transformation, their enterprises are most likely to lag behind in the competitive race. Overtly, the contemplation is bound to have a perpetual impact on the market outlook in the coming years.
Europe data center infrastructure market, by product, 2017 & 2024 (USD Million)
In a recent series of events, the technology conglomerate Google Inc., announced expansion of its data center infrastructure in Ireland, which will also make its total capital investment in Dublin close to €1bn, since 2003. The investment further justifies Google’s strong portfolio in Dublin market, which is a vital operational hub for the internet giant. Reportedly, between the period of 2011 and 2017, Google data center park in South Dublin was almost a direct investment of €350m. Sources further reveal that data centers, on an annual basis, contribute overall €400m to the GDP of Ireland. Amidst this, the company cites the importance of Ireland and the EMEA based data centers, with regard to enabling businesses and consumers to use cloud-based tools & software more effectively and efficiently.
Google’s initiative largely validates the fierce competitive scenario of the data center infrastructure market and the rapid technological interventions this vertical is exemplified with. Apart from Google other industry giants such as Amazon, Facebook, and Oracle are also leveraging this market space and are investing heavily in the developing economies of Asia Pacific. India market in this regard, is witnessing phenomenal growth prospects, owing to the extensive developments in IT infrastructure. Not to mention, the massive smartphones penetration and mobile computing services have proved to be catalysts for the regional expansion.
It is further imperative to mention that the data center infrastructure development is being identified as a critical asset swaying the digital economy trends. The 2015 launched Digital India initiative, which intends to secure reliable internet access nationwide further emphasizes on the growth prospects of India data center infrastructure market. Other than India, China, which is an acclaimed technology-oriented region, also adds immensely to the overall Asia Pacific data center infrastructure industry outlook. As per estimates, APAC industry is set to record a y-o-y growth of 14% over 2018-2024.
Speaking of the strategic terrain, the industry players are striving hard to expand their product and solution portfolio across a slew of end-use domains comprising manufacturing, IT & Telecom, BFSI, colocation, government, and healthcare. On this note, it is imperative to mention that colocation applications held 24% of the global landscape in 2017 and is further gaining substantial momentum on grounds of being perceived as a cost-effective approach for enhanced services such as cooling, power, & maintenance of infrastructure.
Thriving on these lucrative opportunities, it wouldn’t be wrong to say that the market is set to witness colossal commercialization opportunities in the coming years. However, the energy consumption and data security are some of the biggest challenges faced by the data center operators. The UK trade association Intellect states that a large-size data center can consume as much as 30 GWH of power annually, which is equivalent to costing the operator with electricity bill of around £4.2 million. Nonetheless, leading data center infrastructure industry participants appear to have rolled up their sleeves to tackle these challenges and bring forth valuable advancements along these lines. A classic example of these initiatives is of Google’s DeepMind AI software, which is claimed to sizably cut on data center energy bills. Reportedly, the hyperscaler reduced electricity costs for cooling by nearly 40%, in turn reducing the overall PUE by 15%. With such innovative strategies in pipeline, the data center infrastructure market is certain to witness a slew of opportunities on the global scale. The overall market share is forecast to exceed USD 90 billion by 2024.