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Cloud Providers’ Investments in Edge Computing, AI, and 5G to Magnify Global Data Center Market by 2025

APAC is set to become the largest market for data centers over the next few years, reveals Frost & Sullivan

SANTA CLARA, Calif., Feb. 10, 2021 /PRNewswire/ — 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.


For further information on this analysis, please visit: http://frost.ly/590.

“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,” said Manoj Shankar, Research Analyst, Energy & Environment Practice, Frost & Sullivan. “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: 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.

Increased Investment by Cloud and Colocation Providers Drives the Global Data Center Market is the latest addition to Frost & Sullivan’s Energy & Environment research and analyses available through the Frost & Sullivan Leadership Council, which helps organizations identify a continuous flow of growth opportunities to succeed in an unpredictable future.

About Frost & Sullivan
For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders, and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models, and companies to action, resulting in a continuous flow of growth opportunities to drive future success. Contact us: Start the discussion.

Increased Investment by Cloud and Colocation Providers Drives the Global Data Center Market
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Media Contact:
Priya George,
Corporate Communications
M: +91 98403 55432; P: +91 44 6681 4414
E: priyag@frost.com

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