The expanding data centre footprint: why businesses are investing in hyperscale
Thu 7 Apr 2022
In 2022 and beyond, businesses are investing more heavily in the large, scalable computer architecture of hyperscale data centres. In fact, recent research shows that the hyperscale data centre market is expected to grow at a 20.7% CAGR, reaching $71.2 billion USD by 2022.
Hyperscale data centres are those that exceed 5,000 servers or 10,000 square feet. However, that is just the minimum – the largest data centres in the world include Microsoft Chicago, which encompasses 700,000 square feet of space, and Apple and Google sites in North Carolina, each clocking in at over half a million square feet.
Benefits of hyperscale
What are the benefits of having a single facility that houses this much computing power? Many businesses choose hyperscale data centres due to the: low latency, high reliability, efficiency, scalability.
As Microsoft, the owner and operator of the largest hyperscale data centre in the world notes: “The hyperscale architectural model provides nearly instantaneous database backups with no impact on computer resources, the database restores in minutes rather than hours or days, and there is higher overall performance, and rapid scale-out and scale-up.”
Hyperscale providers are interested in gaining these benefits, which are core to the hyperscale data centre functionality. Moreover, investment in hyperscale data centres is being driven by a variety of factors. These include: a surge in digitization and digital transformation initiatives, which continues to accelerate across industries. Consumption patterns are evolving for both business and individual users as the result of sweeping changes associated with the pandemic. Advancements in data-intensive processes including IoT and big data have increased the need for scalable infrastructure. And the growing availability of 5G technology is driving new hyperscale investments as well.
Background & stats
In 2021, hyperscale operators such as Facebook and Google accounted for 60% of hyperscale data centre investment. The remaining 40% was accounted for by colocation operators like CyrusOne and Equinix.
“There are now more 20+ MW requirements than there are 1 MW requirements” said JLL in its 2021 Year-End Data Centre Outlook. “Available land sites in key data centre markets have been limited due to competing industrial demand, power deployment constraints and supply chain issues for critical infrastructure. This has resulted in hyperscale users competing for data centre space that can accommodate large-scale growth that was previously unheard of (i.e. 36+ MW requirements).”
A study from Synergy Research Group found that the number of hyperscale data centres worldwide reached 659 in 2021 – more than doubling since 2016. John Dinsdale, Chief Analyst at Synergy, noted that while new construction has been on a straight growth trajectory, the expansion of capacity at existing facilities is continuing as well. “On top of new data centre build, the hyperscale operators are also adding capacity at existing facilities and are regularly ripping out and replacing server hardware that has reached the end of its operational life-span.”
“That all adds up to huge and growing quarterly investments in data centres. The big five US hyperscalers still lead in terms of quarterly data centre spending, but the Chinese hyperscalers are growing rapidly.”