Rise in amounts of digital data has driven the need for larger data storage capacities, thereby fueling the demand for data center equipment. However, data centers have been facing rising challenges owing to cloud computing, virtualization, security, and consolidation. The most significant concern for data center operators at this time is efficient and secure equipment that will manage and scale the escalating amounts of digital data. Nevertheless, this hasn’t really put a stop to new initiatives being announced by market majors.
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Recent Developments in the Global Data Center Equipment Market
Increasing number of strategic alliances such as mergers, acquisitions, and consolidations as well as geographical and operational expansions activities has made the global data center equipment market immensely competitive.
In the first week of September, NTT Communications and Raging Wire Inc. set up a massive US$300 million data center campus in the city of Garland, Texas. The 1 million-square-foot data center campus is likely to be completed in 18 months.
The same week, Facebook announced that it would be setting up its third data center facility in Oregon. The US$200 million facility is the one of the few in the world that will hold a company’s own IT equipment.
Billionaire Oleg Deripaska, in the same week, announced his plan to invest over US$355 million to build a data center in Siberia. Deripaska’s En+ Group and partners such as Huawei Technologies will be setting up the facility to serve Asian and Russian clients.
Generation of Large Amounts of Digital Data Primary Growth Booster
The global market for data center equipment is fueled by a number of internal and external forces, making it a rapidly developing industry in a rather short period of time. Listed below are some of the major factors driving the global data center equipment market:
- The need for high security, long-term back-up, and improved efficiency are the main requirements of a data storage center, which propels the market for data center equipment
- Improvements in current photovoltaic (PV) solar panels and introduction of new PV technologies contributes to the growth of data center equipment market
- Adoption of new technologies and practices such as green data centers have increased on account of government incentives for generation of renewable energy. This results in the demand for updated and green data center equipment
- Growing need for centralized data storage to enable smooth and efficient operations has led to the increase in demand for equipment such as servers and networking tools
- Surging applications of data center equipment across industry verticals such as telecommunications, banking and finance services and insurance, retail, manufacturing, government, and enterprises has greatly contributed to the growth of the global market
- The telecommunication industry is a storehouse of massive amounts of information in the form of customer databases, call records, and sales. The escalating demand for top-of-the-line equipment drives the data center market
- Wide-scale adoption of cloud services and advancement in the telecommunication sector has boosted the data center equipment market
- Rapid expansion of internet-based services and burgeoning internet subscriber base bolsters has also fueled the global market
These factors will stimulate the growth of the global data center equipment market. According to a report by Transparency Market Research, the global data center equipment market is likely to grow from US$32.15 billion in 2013 to US$72.07 billion by 2020 at a strong CAGR of 12.9% from 2014 to 2020.
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