The Next Decade. How the data centre sector will change year by year up to 2030

The 2020s are here and this is the decade when data centres are expected to take over the world. Predicting just a year in the hyperscale, colocation and edge ecosphere is a conundrum to many, but Data Economy’s João Marques Lima and Abigail Opiah take on the challenge of demystifying the next 120 months for the sector.


This article originally featured in the Dec/Jan 2020 edition of the Data Economy Magazine.

The worldwide public cloud services market is forecast to grow 17% in 2020 to total of $266.4bn, which is up from $227.8bn in 2019, according to findings from research firm Gartner.

Gartner also says Software as a service (SaaS) will remain the largest market segment, which is forecast to grow to $116bn in 2020 due to the scalability of subscription-based software.

The second-largest market segment is cloud system infrastructure services, or infrastructure as a service (IaaS), which will reach $50bn in 2020, according to the firm’s prediction.

The global colocation market is expected to continue to grow considerably across all regions, especially in the US where new data centre capacity in the primary US markets is set to increase these markets’ total inventory by 17.3% this year, and increase competition among providers in certain markets in 2020.

According to CBRE, the integration of 5G and Edge deployments into data centre users’ portfolios in 2020 may result in an uptick in demand in secondary and tertiary data centre markets.

Several data centre projects are announced for 2020, including Turkcell’s $350.5m hub in Turkey, NTT’s data centre in Indonesia, STT’s Thailand facility, CyrusOne’s Ireland data centre and Oracle’s new 20 cloud regions.


Increasing data traffic arising from a multitude of devices is driving the growth of data centres. This also implies the need for secured connectivity for critical data and confidential information.

According to Cisco, Global cloud data centre traffic is likely to reach 20.6 zettabytes (ZB) per year by 2021, up from 6.0ZB per year in 2016. They expect to see 628 hyperscale data centres globally in 2021, compared to 338 in 2016.

Regionally, a lot of attention is being paid to South East Asia this year, when the market is predicted to grow to revenues of $11.8bn, up from $6.28bn in 2016, according to Technavio.

According to Vanson Bourne, by 2021, three-quarters of Singapore companies say they will outsource the majority of their IT infrastructure, of which half will move their infrastructure to the cloud. The top three cost savings, they say, will come from reducing IT infrastructure costs, implementing a cloud and virtualisation strategy as well as standardising their IT infrastructure.

Elsewhere, projects in the pipeline for data centre openings in 2021 include Frist Brick’s five new facilities in Africa and DEAC’s hub in Latvia. According to Host in Ireland, 2021 is also the year when Ireland is expected to ramp up €8bn in aggregate data centre construction projects between 2009 and 2021.


Frost & Sullivan reports that the demand for data transfer and storage has significantly increased over the past few years and is expected to continue to do so till 2022, driving data centre expansion and investment. Escalating Internet and mobile data traffic has led to data growth; global Internet IP traffic is likely to rise from 6.8 ZB (zettabyte) in 2016 to 24.6 ZB by the end of 2022, representing nearly a four-fold increase over six years.

Meanwhile, the rapid adoption of smart phones has led to greater mobile Internet penetration, which is anticipated to increase from nearly 50 percent of the total mobile users in 2017 to more than 70 percent in 2022.

The company forecasts the edge data centre market to grow at a CAGR of 36.3% from $768m in 2017 to $3.6bn in 2022.

Elsewhere, a report released by IHS Markit and sponsored by the Open Compute Project Foundation (OCP) predicts that by 2022 open computing merchandising is going to break the $10bn revenue barrier. 2022 non-board OCP revenue share is expected to climb to more than 5%.

2022 is also the year by when Google expects its data centre infrastructure to be able to beat rival Amazon in the race to be the world’s largest public cloud operator, according to Diane Greene, former Google’s senior vice president.


The global data centre market size is poised to grow by $284.44bn during 2019-2023, according to a new report by Technavio, progressing at a CAGR of more than 17% during the forecast period.

A lot of attention will be paid to the cloud vertical, where spending is forecasted to hit the $500bn mark by this year, according to SoftwareONE.

Software as a Service (SaaS) will be the largest category of cloud computing, capturing more than half of all public cloud spending in throughout the forecast. SaaS spending, which is comprised of applications and system infrastructure software (SIS), will be dominated by applications purchases.

Infrastructure as a Service (IaaS), comprised of servers and storage devices, will be the second largest category of public cloud spending throughout the forecast, followed by Platform as a Service (PaaS).

PaaS spending will grow nearly as fast led by purchases of data management software, application platforms, and integration and orchestration middleware.

When it comes to expansion projects, Brazil is set to have a jubilant year as 2023 is the goal for Digital Realty’s Ascenty to triple its portfolio by through an investment of $276m that will see the operator expand eight existing facilities nationwide and build six other.


The global colocation market will by 2024 have almost doubled in value when compared to 2018. Global revenues topped $39.461BN in 2018, a value that in the next five years will have grown to $69.76bn, according to Structure Research.

In terms of regional market share, APAC is projected to become the world’s largest market in 2021, when it will overcome North America at $19.88bn vs $19.58bn respectively. From then one, the gap between the regions is only expected to grow and by 2024, APAC will amount to $27.95bn, North America to $23.47bn, EMEA is projected to reach $17.21bn and Latin America will break the $1bn barrier for the very first time in history in 2024, when it is expected to close the year at $1.12bn.

This all translates into a global CAGR average of 9.9% for the period of 2018-2024 (Latin America – 18.2%; APAC – 12.2%; EMEA – 11.1%; North America – 6.4%).

Although expected to grow at a faster rate of 15.7% CAGR of 15.7%, the wholesale market will continue to fall behind the retail market, projected for a CAGR of 6.3%. In 2019, the retail sector is projected to close the year on $28.8bn, which will have grown to $39.2bn by 2024.

In comparison, the wholesale colocation market will by December 31, 2019, top around $14.7bn and grow to $30.6bn by midnight on December 31, 2024.


With the data centre market continuing to change and consolidate through the first half of the decade, the hosting monopoly is expected to have been reshuffled by 2025.

By this year, it is expected that data centre M&A will have created a much bigger company than the current largest operators. Activity across mid and emerging markets is also more than expected to be in full swing, especially across Africa where by 2025 it is predicted that the world’s major data centre operators and public cloud operators will be running large operations.

Edge data centres are forecasted to be a common development practice amongst the sector by 2025, with Vertiv predicting edge sites to triple by this year.

The company also predicts that 34% of data centre power will come from solar and wind sources. However, a paper published by US researchers alerts that by 2025, data centres worldwide could be responsible for as much as 1/5 of the global carbon emissions if the industry fails to adopt climate friendly alternatives to their hungry power needs.

Interestingly, 2025 is also the year where a major shit in data centre workforces is expected to be noticeable, with 16% of today’s staff lined up for retirement.

Cloud infrastructure company Apcera predicts that in 2025 the total percentage of enterprise workloads remaining in company data centres will have dropped to less than 35%.

The global data centre networking market size is expected to reach $40.3bn by 2025, rising at a market growth of 12.3% CAGR during the forecast period. Elsewhere, the Global Data Centre Transformation Market is expected to reach $15.92bn by 2025, from $5.86bn in 2017 growing at a CAGR of 13.2% during the forecast period to 2026.

According to “The Data Economy Report” by Digital Realty, by 2025, UK-based data centres will be responsible for the storing of data worth just over $135bn annually. The figure represents a rapid growth from 2018’s $104.7bn.

Southeast Asia’s online economy will be worth more than $240bn by the year 2025 according to a report by Singapore private investment company Temasek Holdings and Google.

And in the Nordic region, a report commissioned by the Nordic Council of Ministers projects envisaged a sharp growth for the Nordic data centre market by 2025 – with expected annual construction investments in the order of $2-4.5bn.


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The global data centre market is predicted to hit the $193bn valuation mark by this year, with colocation revenues hitting $105bn, according to Zion Market Research.

As the fight against Climate Change gains pace towards the targets set for the end of the decade, the green data centre market is forecasted to reach $35bn by 2026, up from $6.5bn in 2018, says Global Market Insights.

The think tank also predicts that the market valuation of data centre networking will cross $45bn by 2026 and the market valuation of data centre UPS will surpass $5bn by 2026.

Green data centres will be common practice, especially across in the US and Europe as renewable power sources rapidly overtake other energy resources. Government initiatives are also expected to speed up data centre companies’ green strategies.

Industry Research forecasts that the global data centre cooling market to reach $20.84bn by 2026, at a CAGR of 13.63% between 2017 and that year.

Hyperscale data centres are predicted to witness an explosive growth in some of the world’s fastest growing economies, especially in China, India
and Mexico, with South America also expected to experience an expanding data centre ecosystem.


The year of 2027 will start the countdown towards the end of the decade with markets across Asia, Africa and Latin America gaining further traction as businesses expand their colocation footprints. The big question arising by then is about who will be the world’s top providers and in which order.

According to Credence Research “Software-defined Data Center Market – Growth, Future Prospects, and Competitive Analysis, 2019 – 2027”, the global software-defined data centre market is set to reach a market value of $165.3bn in 2027 and is expected to have a significant CAGR of 16.4% over the forecast period from 2019 to 2027.

The global data centre construction market accounted for $45.1bn in 2018 and is expected to grow at a CAGR of 8.4% over the forecast period 2019-2027, to account for $89.9bn in 2027, according to Market Study Report.


The global modular data centre market is expected to register a global CAGR of 22.3% during 2018 – 2028, with Western Europe and North America accounting for approximately 60% market value shares by the end of the forecast period, according to Future Market Insights. Eight years into the future, the market is forecasted to be worth nearly $36bn.

The global data centre security market is estimated to exhibit a CAGR of 11.1% during 2018 to 2028, also according to research by Future Market Insights.

One of the key trends governing the growth of the global data centre security market according to the study is the increasing number of initiatives undertaken by several regional governments in collaboration with a variety of Tier-1 and Tier-2 companies.

According to analysis, in addition to joint initiatives of governments and key players, the data centre security landscape has been witnessing a surge in the frequency of introduction of virtualised data centre security solutions via collaborations between multiple channel partners.

And in the US, the rapid expanding cloud economy is projected to deliver a cumulative $2tr economic boost to the country’s Gross Domestic Product (GDP) by 2028.

The figure, based on 2016’s Dollar value, represents the value cloud will deliver by enabling accessibility to technologies such as blockchain, AI, cognitive computing, machine learning, and intelligent automation to a wider range of businesses and consumers.

The findings were published in a report titled “Intelligent Finance: How CFOs Can Lead the Coming Productivity Boom”, and authored by Dr. Michael Mandel, senior fellow at the Mack Institute of Innovation Management at the Wharton School and commissioned by Oracle.


The global hosting infrastructure services market is estimated to reach a value of $28.07bn by 2029 as operational efficiency along with low cost and enhanced security are identified as key factors behind the spike in adoption of hosting infrastructure services.

The research, published by Future Market Insights, anticipates a CAGR of 8% from 2019’s expected $13bn market value all the way to 2029. In 2018, the market value was calculated at $11bn.

In addition to operational efficiency and enhanced security, robust developments in small and midsize businesses (SMBs) are being captured by market vendors as dynamic opportunities to gain higher traction, therefore, speeding up the growth of the hosting infrastructure segment.

Researchers also point that the emergence of highly advanced technologies such as machine learning and AI has led to “tectonic shifts” in end-user preferences as well as services offered.

By 2029, it is predicted that AI, IoT, Blockchain and 5G will generate $721bn in revenue per year to 60 of the largest cities in the world, according to a report released by data centre giant Digital Realty.

Overall, 451 Research predicts a steady growth in the global colocation market through 2029, averaging in the high single digits. Some regions will grow by larger percentages, including Asia Pacific and Latin America, which will be closer to 10%. The U.S. and Europe will grow by around 3% to 4%.


The year that will end the climate change fight. Well at least that is the narrative that is being portrayed in the industry with tech giants and data centre leaders all guaranteeing a better tomorrow for the planet with its sustainability pledges.

Companies across the globe have unveiled its absolute carbon reduction targets for 2030 in a unison-like fashion. With the 10-year room to become green and renewably powered, data centre and telco companies have announced the adoption of an array of techniques to aid the big transition that will help to tackle climate change.

Twenty-eight tech companies with a combined market capitalisation of $1.3tn announced its collective plans to set a new level of climate ambition, backing the UN’s Save the Planet call to action. The companies have committed themselves to climate targets aligned with limiting global temperatures reaching net-zero emissions by no later than 2050, but plan to be as close to zero as possible by 2030.

The likes of Schneider Electric has committed to 100% renewable electricity by 2030, with an intermediary objective of 80% by 2020. Rethink Technology Research concluded that Floating Wind platforms will begin to deliver multiple Gigawatts of electrical power by 2024, and will accelerate to as much as 18.9 GW of capacity by 2030.

When it comes to data centres, Research Gate expects data centres to be using as much as 2,967 TWh of electricity, with other projections topping highs of 7,933 TWh and a lows of 1,137 TWh.

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