Internet Data Center Market Size, Share & Trends Analysis Report By Services (Colocation, Hosting), By Deployment (Public, Private, Hybrid), By End-use (CSP, Telecom), By Enterprise Size (SMEs, Large), By Region, And Segment Forecasts, 2023 - 2030

Internet Data Center Market Size & Trends

The global internet data center market size was estimated at USD 48.70 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 10.6% from 2023 to 2030. The amount of data collected and processed has increased because of the spread of connected devices, the Internet of Things (IoT), and the digital transformation of enterprises. Internet Data Centers (IDCs) are essential for enterprises of all sizes and industries because they offer the infrastructure required to store, manage, and analyze data efficiently. The growth of cloud computing has greatly aided the IDC market's growth. IDCs play a significant role in helping Cloud Service Providers (CSPs) house their servers, storage, and networking hardware, allowing them to offer scalable and accessible cloud services to clients all over the world.

The demand for IDC services from CSPs keeps increasing as more companies move their IT operations to the cloud, which fuels investments in data center infrastructure. The regional distribution of IDC has been extremely important for market expansion. To reduce latency and facilitate real-time applications, edge computing, which entails moving data processing closer to the source of data generation, has grown significantly. Along with technical improvements, corporations have been compelled to invest in high-quality IDC facilities by elements like strict data security rules, business continuity planning, and disaster recovery needs. Critical IT systems may run continuously in these buildings because of their strong security measures, redundancy, and dependable power and cooling infrastructure.

Organizations are adopting edge computing solutions that place data centers closer to the site of data generation as data processing requirements grow more real-time and latency-sensitive. IDCs' edge data centers guarantee faster response times and improve the functionality of IoT, autonomous driving, and augmented reality applications. The IDC market is experiencing new opportunities and demands because of this edge computing movement.IDC market expansion continues to be primarily driven by the growth of cloud services. To fulfill the soaring demand for cloud-based services, the CSPs continue to invest in and expand their data center infrastructures.

Businesses of all sizes are adopting public, private, and hybrid cloud architectures, underscoring the crucial role that IDCs play in enabling cloud computing. It will be crucial for IDC providers to keep on the front edge of technology developments and capacity expansion as cloud computing continues to develop. Requirements for compliance and data security have also helped the industry expand. Protecting sensitive data and ensuring compliance with legal requirements are the issues that organizations are becoming more and more concerned with. IDCs provide a dependable and safe environment for hosting important data and applications thanks to their strong security features, redundancy, and disaster recovery capabilities. IDCs are therefore a top choice for businesses in sectors like banking, healthcare, and government.

End-use Insights

The CSP segment held the highest revenue share of around 35% in 2022. CSPs are leading the revolution in cloud computing. They provide a wide range of cloud services that are essential to contemporary corporate operations, such as Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). The demand for these services, which provide organizations and people with on-demand, scalable, and affordable cloud solutions, continues to soar. These services rely on IDC infrastructure. For CSPs and IDCs, globalization and the growth of digital services are key motivators. As the digital ecosystem develops further, CSPs build data center facilities all over the world, allowing them to serve a large customer base effectively.

The e-commerce & retail segment is expected to register the fastest CAGR of more than 13% over the forecast period. The growth of the e-commerce sector has increased the demand for IDC services. To support their online storefronts, handle enormous product libraries, and deliver flawless consumer experiences, e-commerce and retail businesses need robust and scalable digital infrastructure. IDCs provide the required network, processing, and storage resources for high-performance, secure, and dependable e-commerce operations. IDCs are used by e-commerce businesses to construct content delivery networks (CDNs), which guarantee quick product page loads and effective distribution of multimedia material like images and videos.

Services Insights

Based on services, the colocation segment held the highest revenue share of around 45% of the IDC market in 2022. The rise in popularity of colocation services is largely due to cost-effectiveness. A private data center's construction and upkeep might be prohibitively expensive due to significant up-front capital costs and continuous operational costs. A more affordable option is colocation, which enables businesses to use shared infrastructure and facilities and generate significant savings. For companies looking to maximize their IT budget, colocation's pay-as-you-use business model makes it unnecessary to invest in separate data center hardware.

The CDN segment is expected to grow at the fastest CAGR of over 14% over the forecast period. Effective content delivery is essential given the increase in digital material and online services and the resulting surge in data usage. This need is met by CDNs, which distribute material across a network of servers that are placed in key locations, which improves performance and user experience while lowering latency. The quick development of streaming video, online gaming, and e-commerce has considerably fueled the CDN segment's expansion. In the world of e-commerce, CDNs are essential for quickly delivering web pages, graphics, and product material to customers, which boosts user experience and increases conversion rates.

Regional Insights

North America held the largest market share of around 39% in 2022. The prosperous business climate and growing economy of the region aid the rise of the market. Businesses in North America use IDC services across a range of industries, including e-commerce, entertainment, and the financial and healthcare sectors, which include networking and data storage tools for developing and disseminating cutting-edge digital solutions. IDC's growth is significantly influenced by North America's significance as a global financial center. Since the financial sector has rigorous data security and compliance standards, IDC services are a popular choice for storing essential financial data and applications. Due to the growing popularity of FinTech solutions and online banking services, there is still a high demand for secure and dependable data center services.

Asia Pacific is expected to register the fastest CAGR of around 12% over the forecast period. Rapid urbanization and economic expansion in the region are driving the uptake of digital technology. Due to this, a growing number of companies-both big and small-need innovative data center services to support their operations. IDC services are required to meet rising data and computing needs as a result of the tremendous digital transformation taking place in emerging markets like China and India. With its large population, the region has a sizable consumer base and a developing middle class. This demographic shift is fuelling the expansion of the market. IDCs are essential in enabling these digital experiences as more consumers switch to internet streaming, purchasing, and payments.

Deployment Insights

Based on deployment, the public segment held the highest revenue share of over 52% in 2022. The need for scalable and affordable cloud computing services is one of the main factors boosting the public deployment segment's growth. To offer public cloud services, major cloud service providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud have increased the number of data centers they operate throughout the world. These services free organizations from the hassle of operating on-premises data centers and capital-intensive infrastructure investments by enabling them to scale their infrastructure up or down depending on their needs.

The hybrid segment is expected to grow at the fastest CAGR of over 13% over the forecast period. The fact that not all workloads are created equally is what has led to the emergence of hybrid deployments. While some data and applications are best suited for the scalability and affordability of the public cloud, other data and applications need the security, management, and compliance safeguards offered by private data centers. The hybrid method enables businesses to selectively arrange tasks in the most suitable setting, maximizing resource usage and financial effectiveness.

Enterprise Size Insights

Based on size, the large enterprises segment held a revenue share of 83% in 2022. Data-intensive applications dominate the IT operations of major businesses. These companies handle enormous amounts of data, which frequently calls for sophisticated network infrastructure, computing power, and storage. Internet data centers provide the performance and scalability required to enable data analytics, AI, and other data-driven efforts. Large businesses are looking for IDC services that can meet their ever-rising data needs as a result of the advent of big data analytics and machine learning.

The SME segment is expected to register the fastest CAGR of around 12% over the forecast period. SMEs are adopting cloud computing and digital transformation at a rapid rate. As more small and medium-sized businesses become aware of the advantages of utilizing digital technology, they need scalable and affordable IT infrastructure to support their operations. IDCs give these companies the chance to utilize top-notch data center resources and cloud services without having to make big upfront infrastructure investments or build out substantial in-house IT staff.

Key Companies & Market Share Insights

Intense competition among the leading market players for introducing advanced and innovative products is encouraging companies to invest in research and development of energy-efficient data centers. Companies are adopting strategies to leverage new opportunities in the market and target new customers by developing sustainable products. For instance, in September 2023, Google, Microsoft, Schneider Electric, and Danfoss together announced a pan-European initiative named Net Zero Innovation Hub for Data Center; this is made in conjunction with the Danish Data Center Industry. The new center would be in Fredericia, Denmark, and aim at fastening the transition to the green data center.

Internet Data Center Market Report Scope

Global Internet Data Center Market Report Segmentation

The report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global internet data center market report based on services, deployment, enterprise size, end-use, and region:

• Services Outlook (Revenue, USD Billion, 2018 - 2030)

  • Hosting

  • Colocation

  • CDN

  • Others

• Deployment Outlook (Revenue, USD Billion, 2018 - 2030)

  • Public

  • Private

  • Hybrid

• Enterprise Size Outlook (Revenue, USD Billion, 2018 - 2030)

  • Large Enterprises

  • SMEs

• End-use Outlook (Revenue, USD Billion, 2018 - 2030)

  • CSP

  • Telecom

  • Government/Public Sector

  • BFSI

  • Media & Entertainment

  • E-commerce & Retail

  • Others

• Regional Outlook (Revenue, USD Billion, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • UK

    • Germany

    • France

    • Italy

    • Spain

    • Netherlands

    • Poland

  • Asia Pacific

    • India

    • China

    • Japan

    • Australia

    • South Korea

  • Latin America

    • Brazil

    • Mexico

    • Argentina

  • Middle East & Africa (MEA)

    • UAE

    • Saudi Arabia

    • South Africa