US Data Center Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

US Data Center Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The United States Data Center Market size is expected to grow from USD 18.10 billion in 2023 to USD 28.46 billion by 2028, at a CAGR of 9.47% during the forecast period (2023-2028).

Key Highlights

• IT Load Capacity: The IT load capacity of the data center market will have steady growth and is expected to reach 24,108 MW by 2029.
• Raised Floor Space: The total raised floor area of the country is expected to increase to 80.7 million sq. ft by 2029.
• Installed Racks: The total number of installed racks is expected to reach 4,035,254 units by 2029. Northern Virginia is expected to house the maximum number of racks by 2029.
• DC Facilities: Evolving technology businesses have led data center companies to record huge potential in the market. With the introduction of faster network alternatives like 5G and extensive fiber connectivity supporting technologies like FWA, smartphone data consumption increased from 1.8 GB in 2018 to about 8.5 GB in 2022.
• Leading Market Player: In 2022, Switch held a market share of 14.19% with an operational capacity of 1590 MW. Switch's focus on sustainability and efficient technologies make their exascale ecosystems the industry's most sustainable and cost-effective colocation environment.

US Data Center Market Trends

Tier 3 is the largest Tier Type

• Tier 3 data centers are the most preferred in the country. They operated at an IT load capacity of 5,319.6 MW in 2022. Tier 3 data centers have redundant and dual-powered servers, storage, network links, and other IT components. As of 2022, the country had 399 tier 3 data centers. Around 73 data centers are under construction with Tier 3 standards.
• SMEs generally prefer a Tier 3-rated facility. SMEs are a vital component of the US economy, as they comprise 99.9% of active enterprises. End users such as BFSI and telecom are focusing on hyperscale colocation services.
• Tier 4 data centers are the next most preferred, mainly by large enterprises, as they provide 99.995% uptime. However, high cost is the major factor for the low adoption of these facilities. With the data traffic generation, upcoming data centers are expected to follow Tier 4 standards. In the United States, IP traffic reached an annual run rate of 955.7 exabytes in 2021, up from an annual run rate of 376.2 exabytes in 2016, suggesting the growing demand for more redundant and efficient facilities. As a result, tier 4 data centers are expected to hold the highest market share of 48.9% in 2029, followed by tier 3 facilities with a share of 45.4%.
• Tier 1 & 2 data centers are the least preferred as tier 1 has an expected uptime of 99.671% (28.8 hours of downtime annually), while tier 2 has an expected uptime of 99.741% (22 hours of downtime annually). These data centers are commonly utilized by small businesses looking for a cost-effective option for their data storage needs. However, due to lower functionality, even SMEs are focusing on adopting wholesale colocation services with a Tier 3 certification. Therefore, tier 1 & 2 DCs are expected to showcase the lowest growth.

US Data Center Industry Overview

The United States Data Center Market is moderately consolidated, with the top five companies occupying 42.15%. The major players in this market are CyrusOne Inc., Digital Realty Trust, Inc., Equinix, Inc., Quality Technology Services and Switch (sorted alphabetically).

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support