Japan Data Center Market is Forecast to Grow at the CAGR of 6.9% in the Forecast Period
Published | 11 October 2021
Japan data center market is growing at a high CAGR because of the increasing adoption of cloud computing and growing government and private investment towards the construction of data centers...
A recent study conducted by the strategic consulting and market research firm BlueWeave Consulting revealed that Japan data center market was worth USD 6.6 billion in the year 2020. The market is estimated to grow at a CAGR of 6.9%, earning revenue of around USD 10.4 billion by the end of 2027. Because Japan is rapidly shifting towards online businesses and cloud computing, data centers in the country are expanding at a high pace. The main growth drivers are the increasing volume of data and the growing number of large and small businesses. Furthermore, increasing investment from the Japanese government, private entities, as well as FDA towards the construction of data centers is further estimated to drive the growth of the Japan data center market in the forecast period. However, the high initial cost for the construction of data centers and the negative effects of data centers on the environment may act as a major restraining factor for market growth.
Increasing Penetration of IoT Devices and AI Is Projected to Drive the Japan Data Center Market Growth
Technology and robotics are considered Japan's top strengths, which is why its market is full of high-tech IoT and artificial intelligence devices. IoT devices generate a large volume of data every day from sensors, smart speakers, environment sensors, machine parts, etc. This data flows through the cloud to storage such as smartphones or computers. AI works similarly with artificial data generated in real-time. As a result, the data centers market is growing rapidly due to the increasing demand for their services.
The Flourishing BFSI Segment Is Expected to Boost the Japan Data Center Market Growth
The Japan data center market is segmented into BFSI, telecom and IT, media and entertainment, e-commerce, government, healthcare, and others, based on end-users. BFSI segments account for the largest share in Japan due to the flourishing banking sector. Japan's banking sector is known for being highly stable and well-regulated. With increasing online payment applications and bank-associated apps for secure payments in Japan, efficient data centers will be necessary, boosting the overall market growth. Furthermore, the healthcare sector is also gaining significant traction with increasing wearables and AI medical devices, generating large volumes of data every day, thereby favoring the market growth.
The Cooling System Segment is Booming in Japan Data Center Market
Based on mechanical infrastructure, the Japan data center market is segmented into cooling systems, rack, and others. The cooling system segment holds the largest market share in the Japan data center market as they play a crucial role in the smooth functioning of the data centers. The cooling systems keep the temperature of the facility regulated 24x7 while preventing the overheating of critical IT equipment. Data centers generate a large amount of heat, and in cases of overheating, they may even shut down, which will eventually halt the operations. Therefore, Japanese organizations and data centers are significantly investing in equipping efficient cooling systems, which is propelling the growth of the cooling system segment.
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Impact of COVID-19 on Japan Data Center Market
The Japan data center market significantly flourished after the unprecedented outbreak of COVID-19 outbreak. As the dependence on the internet and smartphones increased during the lockdown period, the demand for efficient data centers also increased, propelling the growth of the market. Furthermore, foreign direct investment may also boost the market growth for data centers in Japan due to increased potential and demand. Furthermore, the introduction and initiatives towards zero-emission data centers in Japan will likely open great growth opportunities to the market in the post-COVID-19 period.
The leading players in the Japan data center market are IBM Corporation, Oracle Corporation, Singtel Telecommunications Ltd., Digital Realty Trust Inc., Telehouse, Equinix Inc., Verizon Japan Ltd., Japan Telecommunications Corporation, NTT Communications Corporation, Fujitsu Ltd., and other prominent players.
The Japan data center market is dominated by giants and conglomerates like IBM Corporation, NTT Communications, Fujitsu Ltd., etc. However, the market is still favorable for new entrants offering efficient data center facilities. The companies significantly invest in expanding their capacity and replacing redundant technologies with advanced ones. Furthermore, the adoption of competitive strategies like mergers, acquisitions, partnerships, collaboration, etc., is also prominent in this market.
The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the Japan data center market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the Japan data center market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market.
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