United States Data Center Market - Growth, Trends, COVID-19 Impact, and Forecast
Posted by Statzy Market Research on May 21st, 2021
Data centers are energy-intensive buildings growing in size and number to meet the increasing demands of a digital economy. While the data center facility is growing, a comparable increase in electricity demand has been avoided by the adoption of energy efficiency measures and a shift towards the large cloud-based service providers. Alternative projections from the IOP Publishing Ltd illustrate that total electricity consumption shall vary by about 135 billion kWh, depending on the acceptance rate of efficiency measures in data centers during this decade.
- High penetration of the 200GbE and 400GbE switch ports drives the market. Servers are continuously getting more traffic, and whether it is the hyper-converged, blade, modular, or even just dense rack servers, the density is increasing, and every server features dual 10 Gb network interface cards or even 25 Gb. Further, the increase in private cloud applications and virtual desktop infrastructure puts additional demands on networks that penetrate the demand of 200GbE and 400GbE, and by these factors, players are focused on innovating ethernet switches. Players such as Amazon, Microsoft are focused on adopting 200-Gbps technology and 400GbE for their next-generation data center adoption in the United States.
- In March 2020, Mellanox Technologies announced the launch of its SN4000 Ethernet switches for the for next-gen data centers. The new SN4000 platforms come in flexible form-factors supporting a combination of up to 32 ports of 400GbE, 64 ports of 200GbE, and 128 ports of 100/50/25/10GbE. If implemented in the coming period, this assists the growth of the market in networking technologies in the region.
- However, the outbreak of COVID-19 has altered the data centers' construction in the region, where the opening of several new facilities is halted for three months as the supply of labors and parts are stopped drastically. For instance, Facebook pauses the construction of USD 750 million Alabama data center amid COVID-19 pandemic.
- However, Northern Data AG reported that the COVID-19 pandemic is resulting in a massive increase in computing capacity demand in pharmaceutical companies and research institutions in the region, which focused for using HPC systems on a large scale to carry out calculations and simulations in the bioinformatics and epidemiology field in the shortest possible time, where the conventional computer systems can take several months or even years. Also, in April 2020, Procurri LLC announced its plans to help companies access data center equipment more affordably, in the condition of any shortages. Recently the company revealed that it had witnessed a surge in shipments at its Atlanta distribution hub.
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Key Market Trends
- According to Cisco, the total number of hyperscale facilities is expected to exceed more than 500 by the end of 2020, and Cisco even estimates that 53 percent of all data center traffic will pass through hyperscale facilities by 2020 in the United States.
- According to a study by James Hamilton, power distribution and cooling systems cause around 82% of the data center infrastructural cost. Further, the underutilization of data center space costs with high CAPEX. Recently, larger-scale organizations are emphasized reducing their CAPEX and OPEX, which is driving the adoption of hyperscale datacenters worldwide.
- Players such as AWS, Microsoft, Google offers robust, scalable applications and storage portfolio of services to individuals or businesses. Further, a small town in the rural center of Washington State, Quincy, is home to several hyperscale data centers for companies including Microsoft, Yahoo, and Dell. Since the hyperscale data center is important for the construction of scalable and robust cloud, a large number of cloud service providers use it in the United States.
- In September 2019, EdgeConneX declared a partnership with Lume for leveraging its Cloud Anyware services. The partnership enables them to accomplish goals like bringing its cloud solutions to the Edge, local, and highly proximate to its enterprise customers. EdgeConneX customers can leverage Lumeâ€™s Cloud Anyware service suite to deploy highly proximate dedicated private, virtual private, hybrid, and on-premise cloud solutions.
- Further, the growth of the market expansion by the players in the region significantly assists in market growth. In January 2020, T5 has bought a 15.4MW data center shell near existing facilities in the Elk Grove Technology Park, near Chicago for enterprise hyperscale data center cloud. Its robust network infrastructure makes it an ideal location for both enterprise and hyperscale cloud companies in need of additional capacity.
- Moreover, the US government started the Data Center Optimization Initiative (DCOI) for delivering better services to the public while increasing return-on-investment to taxpayers by consolidating many data centers in the country. The consolidation process includes the process for building hyperscale data centers and to shut-off the underperforming ones. Currently, the government has closed over 3,215 data centers in the country.
- The trend of using renewable resources to power the data centers is evident across the country. For instance, Siemens, along with Microsoft and FuelCell Energy solutions, implemented a new data center in the United States, which generates electricity for its servers from renewable sources converting biogas from a sewage treatment plant into electricity and water.
- Further, the increasing demands of new IT workloads have surpassed the capacity of existing lead and lithium batteries in data centers to safely provide backup power matching these new peak demands. To address such issues, in April 2020, Natron Energy deployed its first BlueTray4000 battery providing 48V DC bridging and peak power capacity to the generator power in the H5 Data Centers Phoenix facility.
- Moreover, in April 2020, Northern Data AG announced to provide its new 100 MW of HPC (High-Performance Computing) for the United States Customer in the Texas Facility. Compared to regular datacenters, this 100 MW alone is in a multiple of the capacity for most of the datacenter in the United States. This significantly enhances the market growth in the region.
- Further, the demand for carbon-free energy in the data center is accelerating market growth. Google announced to explore energy storage to reach around-the-clock carbon-free energy. In January 2020, it entered a PPA (Power Purchase Agreement) with the utility NV Energy which includes 250 and 280 megawatts of storage to power a new data center in Nevada (Western United States).
- Furthermore, the adoption of modular, scalable, and lithium-ion powered systems in the facilities is expected an increment in revenue from the UPS systems. Several hyperscale facilities are built supporting a critical power capacity of over 15 MW, which is anticipated to boost the data center power infrastructure procurement in the United States.
- April 2020 - NVIDIA announced the completion of its acquisition of Mellanox Technologies, Ltd., for a transaction value of USD 7 billion. Combining NVIDIAâ€™s leading computing expertise with Mellanoxâ€™s high-performance networking technology, the move will enable customers to achieve higher performance, greater utilization of computing resources, and lower operating costs. With Mellanox, the new NVIDIA has end-to-end technologies from AI computing to networking, full-stack offerings from processors to software, and significant scale to advance next-generation data centers.
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Joined: November 9th, 2020
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