ICC News: New data from Synergy Research Group shows that hyperscale providers (Hyperscale Providers) operate nearly 900 large-scale data centers, accounting for 37% of all data center capacity worldwide. Roughly half of hyperscale capacity is in self-built data centers, and half is leased facilities. Since non-hyper scale, colocation accounts for 23% of global data center capacity, and on-premise data center capacity accounts for only 40%. This starkly contrasts five years ago, when nearly 60 percent of data center capacity was located in on-premises facilities.
Hyper scalers will account for more than half of all capacity in five years, while on-premises will drop below 30%. Meanwhile, total global data center capacity will continue to grow steadily, nearly doubling in the next five years, driven by hyperscale deployment capacity. While the share of on-premises data center capacity will decline by more than two percentage points per year, its actual capacity will only decline slightly. Colocation’s share of total capacity will remain relatively constant.
Synergy’s hyper-scale market research analyzes the data center footprints and operations of 19 major cloud and Internet services companies worldwide, including the largest operators in SaaS, IaaS, PaaS, search, social networking, e-commerce, and gaming. The colocation and leasing data center research is based on Synergy’s in-depth tracking of the colocation market, covering quarterly data from more than 230 companies.
Ten years ago, businesses spent over $80 billion a year on IT hardware and software in their data centers, while spending on emerging cloud infrastructure services was well under $10 billion. Fast-forward to today and spending on data center hardware and software is growing by an average of just 2% per year, while spending on cloud services is surging, averaging 42% per year to reach $227 billion by 2022.
As businesses fundamentally reshape their IT investments to spend less on their own data centers, leading cloud providers are rapidly building vast global networks of hyper scale data centers. The rapid development of consumer-facing digital services such as social networking, e-commerce, and online gaming has further fueled the growth of hyperscalers.
Additionally, while enterprise spending on data center equipment has remained flat or growing slowly, more and more data center equipment has been moved to off-site colocation facilities. On-premise data centers aren’t going away anytime soon, but they’re getting smaller than hyper scale and colocation companies.