U.S. Data Center Market Landscape 2024-2029

U.S. Data Center Market Landscape 2024-2029

The U.S. data center market is expected to grow at a CAGR of 6.54% from 2023-2029.

KEY TRENDS

Data Center Operators Making Efforts to be More Sustainable and Environmentally Friendly

• The increase in energy consumption and carbon emissions has led the operators to address these issues. Many companies in the United States data center market purchase clean, renewable energy to power their current and future facilities, reducing their environmental impact.
• Despite the high energy cost, major companies like Google, Microsoft, Digital Realty, CyrusOne, Meta (Facebook), QTS Realty Trust, and Amazon Web Services continue to procure renewable energy to reduce emissions, achieve carbon neutrality, and promote sustainability.
• In January 2024, Microsoft signed a new 125 MW solar Power Purchase Agreement (PPA) with Apex Clean Energy in Ohio. The 125 MW Wheatsborough Solar project is currently being developed and is slated to come online by 2025.

AI Transforming the Landscape of the U.S. Data Center Market

• The AI industry is set to significantly increase the size of hyperscale data centers. Even though the current AI investments haven’t fully compensated for the growth in hyperscale data centers, the capacity of these data centers, especially for AI workloads, is expected to almost triple in the next six years.
• Data centers will play a crucial role in AI's success, but they also pose a challenge for providers. The high computational performance and energy consumption of GPUs and other specialized chips used in AI, such as ASICs and FPGAs, require massive power as rack densities rapidly increase.
• In October 2023, Meta resumed building its data centers in Temple, Texas, and Kuna, Idaho. The company updated its data center design to accommodate more powerful GPUs for AI work in the coming year. These centers will be the first to use this new design.

Sustainable and Innovative Data Center Technologies

• There is an increasing focus on sustainable and innovative data center technologies. With the growing awareness of environmental concerns and the need for energy efficiency, U.S. data center market operators are investing in cutting-edge solutions.
• Innovations like liquid cooling systems and advanced data center designs are being implemented to enhance energy efficiency and reduce heat emissions. The development of Artificial Intelligence (AI) and Machine Learning (ML) solutions is aiding in predictive maintenance, optimizing operations, and reducing energy consumption.
• Hydrotreated Vegetable Oil (HVO) fuel is being used to replace traditional diesel generators. In September 2023, Vantage Data Centers recently shared its plan to use HVO fuel instead of traditional diesel fuel in its generators. The company will likely deploy HVO fuel for generators in Santa Clara, California.

SEGMENTATION INSIGHTS

• Numerous innovative power and cooling systems have recently been launched, emphasizing sustainability. Infrastructure providers are increasingly concentrating on developing products that minimize environmental impact.
• In recent years, operators in the U.S. data center market have been implementing new and energy-efficient cooling systems intending to reduce power consumption by up to 50%. This trend is expected to continue in the forecast period as U.S. data center market vendors continually invest in developing more efficient products.
• The US data center market for liquid immersion and direct-liquid cooling solutions is experiencing strong growth owing to the increased deployment of artificial intelligence and machine learning workloads during the forecast period.
• Traditionally, data center operators have adopted VRLA batteries; however, they are now moving towards lithium-ion batteries. For instance, the Ashburn data center campus of EdgeCore Digital Infrastructure is equipped with lithium-ion batteries in UPS systems.
• Traditionally, diesel fuels have been the go-to choice for operators in the U.S. data center market due to their reliability. However, with a growing emphasis on reducing carbon emissions and achieving sustainability goals, there's a noticeable shift towards more eco-friendly alternatives. One such alternative is Hydrotreated Vegetable Oil (HVO), a renewable diesel fuel gaining popularity for its environmental benefits.
• In addition to constructing and developing data centers, the U.S. data center market companies emphasize strengthening physical security, fire detection systems & monitoring and managing the facilities through a real-time Data Center Infrastructure Management (DCIM) system.

Segmentation by Facility Type

• Hyperscale Data Centers
• Colocation Data Centers
• Enterprise Data Centers

Segmentation by Infrastructure

• IT Infrastructure
• Electrical Infrastructure
• Mechanical Infrastructure
• General Construction

Segmentation by IT Infrastructure

• Server Infrastructure
• Storage Infrastructure
• Network Infrastructure

Segmentation by Electrical Infrastructure

• UPS Systems
• Generators
• Transfer Switches & Switchgear
• Power Distribution Units
• Other Electrical Infrastructure

Segmentation by Mechanical Infrastructure

• Cooling Systems
• Racks
• Other Mechanical Infrastructure

Segmentation by Cooling Systems

• CRAC & CRAH Units
• Chiller Units
• Cooling Towers, Condensers, and Dry Coolers
• Economizers & Evaporative Coolers
• Other Cooling Units

Segmentation by Cooling Techniques

• Air-based
• Liquid-based

Segmentation by General Construction

• Core & Shell Development
• Installation & Commissioning Services
• Engineering & Building Design
• Physical Security
• Fire Detection & Suppression
• DCIM

Segmentation by Tier Standard

• Tier I & II
• Tier III
• Tier IV

GEOGRAPHICAL ANALYSIS

• Northern Virginia is evolving into a multi-state market characterized by rapid data center developments spanning hundreds of acres. Although there's a trend towards establishing large data center campuses in peripheral regions, smaller opportunities remain available in conventional data center clusters like Ashburn.
• The state of Georgia is actively showcasing its support for the data center industry by implementing tax exemptions on high-technology data center equipment, extending this benefit until 2033. This initiative draws significant attention to the Atlanta market, where numerous data center projects are currently in development or planning phases.
• Constructing data centers in the Midwestern U.S. is a significant focal point for hyperscale operators developing facilities in key locations like Illinois, Iowa, Nebraska, and Ohio. This market is anticipated to expand steadily, driven by the activities of major hyperscale companies.
• Texas is becoming a thriving data center hub in the U.S. owing to significant activities from the colocation and hyperscale operators. Pre-leasing remains a common trend, with most new constructions committed to single users before construction begins.
• The Western U.S. region stands as a developed and mature market for data centers, hosting all the major hyperscalers like Google, Meta (formerly Facebook), and Microsoft in prime locations such as Oregon, Idaho, Utah, and California. Given its preferred location for hyperscale operators, investments in this area are anticipated to increase throughout the forecast period.
• The growth of the data center market in New York and New Jersey is primarily driven by the continuous demand for data center space, positioning the area as a key connectivity hub within the heart of New York City's financial center. Compared to other regions, this area is anticipated to see lower investments in hyperscale data centers. However, investments in edge data centers are projected to grow considerably in the coming years, particularly in areas where space is available at a premium price.

Segmentation by Geography

• The U.S.
• South-Eastern U.S.
• South-Western U.S.
• Western U.S.
• Mid-Western U.S.
• North-Eastern U.S.

VENDOR LANDSCAPE

• The U.S. data center market features a variety of active participants and vendors, contributing to its expansion. Those vendors that provide innovative and advanced technologies stand a better chance of securing a larger US data center market share throughout the forecast period.
• Some of the top IT and support infrastructure providers active in the U.S. data center market include Arista Networks, Broadcom, Cisco Systems, Hewlett Packard Enterprise, Dell Technologies, IBM, NetApp, ABB, Caterpillar, Cummins, Eaton, Legrand, Schneider Electric, Vertiv, STULZ, Rolls-Royce Power Systems, Siemens, Delta Electronics and others.

Key IT Infrastructure Providers

• Arista Networks
• Atos
• Broadcom
• Cisco Systems
• Dell Technologies
• DDN Storage
• Extreme Networks
• Fujitsu
• Hewlett Packard Enterprise
• Hitachi
• IBM
• Infortrend Technology
• Inspur
• Intel
• Lenovo
• Micron Technology
• Mitac
• Nimbus Data
• NetApp
• Oracle
• Pure Storage
• Quantum
• QNAP Systems
• QCT
• Seagate Technology
• Silk
• Supermicro
• Synology
• StorCentric
• Toshiba
• Western Digital
• Wiwynn

Prominent Support Infrastructure

• ABB
• Airedale
• Alfa Laval
• Asetek
• Bloom Energy
• Carrier
• Condair
• Cormant
• Cyber Power Systems
• Caterpillar
• Cummins
• Delta Electronics
• Enlogic
• EATON
• FNT Software
• Generac Power Systems
• Green Revolution Cooling (GRC)
• Legrand
• HITEC Power Protection
• Johnson Controls
• KOHLER
• KyotoCooling
• Mitsubishi Electric
• Natron Energy
• NetZoom
• Nlyte Software
• Rittal
• Rolls-Royce
• Schneider Electric
• Siemens
• Trane (Ingersoll Rand)
• Tripp Lite
• STULZ
• Vertiv
• Yanmar
• ZincFive

Prominent Construction Contractors

• AECOM
• Arup
• AlfaTech
• BlueScope Construction
• Brasfield & Gorrie
• Corgan
• CallisonRTKL
• Clark Construction Group
• Climatec
• Clune Construction
• DPR Construction
• EMCOR Group
• EYP MCF
• Fortis Construction
• Flour Corporation
• Gensler
• Gilbane Building Company
• Holder Construction
• HDR
• HITT Contracting
• Hoffman Construction
• Jacobs
• JE Dunn
• JHET Architects
• kW Engineering
• WSP
• Linesight
• M + W (EXYTE)
• Morrison Hershfield
• Mortenson
• Rogers-O’Brien Construction
• Rosendin
• Syska Hennessy Group
• Salute Mission Critical
• Sheehan Nagle Hartary Architects
• Skanska
• Southland Industries
• Sturgeon Electric Company
• Structure Tone
• Turner Construction
• The Mulhern Group
• The Walsh Group
• The Weitz Company
• TRINITY Group Construction

Prominent Data Center Investors

• Amazon Web Services (AWS)
• Apple
• Aligned Data Centers
• American Tower
• AUBix
• CyrusOne
• CloudHQ
• Cologix
• Compass Datacenters
• COPT Data Center Solutions
• DartPoints
• DC BLOX
• DataBank
• Digital Realty
• Equinix
• Edge Centres
• EdgeConneX
• EdgePresence
• EdgeCore Digital Infrastructure
• Element Critical
• Evoque
• Flexential
• fifteenfortyseven Critical Systems Realty (1547)
• Google
• GIGA Data Centers
• H5 Data Centers
• HostDime
• Iron Mountain
• Meta (Facebook)
• Microsoft
• NTT DATA
• Netrality Data Centers
• Novva Data Centers
• PowerHouse Data Centers
• Prime Data Centers
• QTS Realty Trust
• Sabey Data Centers
• Skybox Datacenters
• Stream Data Centers
• STACK Infrastructure
• Switch
• T5 Data Centers
• TierPoint
• Vantage Data Centers
• Vapor IO
• Yondr
• 365 Data Centers

New Entrants

• Corscale Data Centers
• Crane Data Centers
• Edge Energy
• NE-Edge
• Quantum Loophole
• Rowan Digital Infrastructure

KEY QUESTIONS ANSWERED:

1. How big is the U.S. data center market?

2. What is the growth rate of the U.S. data center market?

3. What is the estimated market size in terms of area in the U.S. data center market by 2029?

4. How many MW of power capacity is expected to reach the U.S. data center market by 2029?

5. What are the key trends in the U.S. data center market?