United States Data Center Market Poised for Brisk Growth: Projected to Grow at a CAGR of 8.4% by 2027
Published | 26 October 2021
United States 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 the United States data center market was worth USD 8.5 billion in the year 2020. The data generated by the study reveals that the market is estimated to grow at a CAGR of 8.4%, earning revenue of around USD 14.9 billion by the end of 2027. Data centers in the United States have been seen to grow rapidly due to the heavy investment in their construction as well as the high concentration of tech giants such as Microsoft, Apple, Facebook, etc., which has accelerated the volume of data. Furthermore, the emergence of small and medium-sized businesses in the United States and a shift towards cloud computing for business operations are expected to boost the data center market in the forecast period. However, the high cost involved in the construction, management, and maintenance of data centers and the negative impact of the data centers on the environment may act as major threats to the growth of the United States data center market.
Increasing Adoption of Hyper-Converged Infrastructure is Expected To Boost The United States Data Center Market
America has always been at the forefront of adopting new and advanced technologies. The new data center facilities being built in the United States all feature hyper-converged infrastructure, which delivers faster and more reliable storage performance. In a hyper-converged infrastructure, all data center components such as storage, computing, networking, and management are combined into a single hardware component. Not only is this more efficient in terms of management, but it also provides better scalability, data protection, and reliability. Such innovations are expected to drive the data center market in the United States.
Favorable Government Policies Driving the Growth of The United States Data Center Market
The United States data center market is poised for growth due to government policies such as tax rebates on the construction of data centers. There are several states that offer tax rebates for data centers, including Alabama, Arizona, Georgia, etc. Alabama offers up to 30 years of tax breaks to data centers that invest 400 million dollars and create at least 20 jobs. Arizona offers a sales tax exemption on data center equipment to data centers investing USD 50 million.
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United States Data Center Market - By End User
Based on end-users, the United States data center market is segmented into BFSI, telecom & IT, media & entertainment, e-commerce, government, healthcare, and others. Among these, the telecom & IT segment accounts for the largest share in the United States data center market. The IT and telecom industries are significantly investing in data centers to fully meet business and service delivery needs due to the increasing penetration of the internet and the launch of high-speed 5G networks. On the other hand, the media & entertainment segment is also gaining significant traction in the United States market with the increasing popularity of online streaming platforms such as Netflix and Amazon Prime. These platforms require efficient data centers to provide real-time streaming. Demand for data centers will increase as OTT platforms grow, driving the market forward.
Impact of COVID-19 on United States Data Center Market
The United States data center market flourished significantly during the COVID-19 outbreak. With increasing dependence on the cloud due to remote working and growing traffic on online streaming and OTT platforms for entertainment, the demand for data centers flourished, propelling the market growth. In the initial phase of the outbreak, the lockdown announcement may have caused internet disruptions due to the sudden spike in traffic. Furthermore, due to the shortage of workforce, the construction of data centers was also delayed. The market, however, is expected to grow at a high CAGR once the construction of data centers gets back on track in the United States in the post-COVID-19 era.
The leading players in the United States data center market are Cisco Systems, Inc., Verizon Wireless, Inc., Dell Technologies Inc., AT&T Inc., Hewlett Packard Enterprise, Equinix, Inc., IBM Corporation, Atos SE, Lenovo Group Limited, NetApp, Inc., and other prominent players.
The United States data center market is highly fragmented, with the presence of various industry players. Businesses invest significantly in expanding the capabilities of their facilities and upgrading the hardware periodically to ensure smooth operation. This market is also characterized by the adoption of various competitive strategies such as partnerships, mergers, acquisitions, collaborations, etc.
The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the United States data center market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the United States 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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