Hyperscalers set capture half of data center capacity in the next five years
Jul 21, 2023 | Posted by MadalineDunn
According to Synergy Research Group, hyperscalers and colocation companies are dwarfing on-premise data center capacity. Its research revealed that hyperscalers now account for 37% of the worldwide capacity of all data centers, with the number of large data centers operated by hyperscalers reaching 900.
Of this 37%, half of the capacity is in own-built, owned data centers, and half in leased facilities. Meanwhile, non-hyperscale colocation capacity accounts for 23% capacity, with on-premise data centers making up just 40% of the total.
Further, the group forecast that hyperscale operators will account for over half of all capacity, with on-premise dropping to under 30%.
This is a big change from five years ago, when almost 60% of data center capacity was in on-premise facilities, and even further back, ten years ago, enterprises were spending over $80 billion per year on IT hardware and software for their own data centers. This has only grown by an average 2% per year, while cloud services expenditure surged to $227 billion in 2022.
That being said, the report noted on-premise data centers are not expected to disappear completely; but maintain a relatively steady capacity, experiencing a slight annual decline.
“Given all of the excitement over the growth of hyperscale operators and the big push towards enterprises outsourcing datacenter facilities, you might assume that the days of on-premise datacenters are numbered,” commented John Dinsdale, chief analyst and research director at Synergy.
“That is not true and the total capacity of on-premise datacenters will remain reasonably steady over the next five years, actually declining by an average of just a fraction of 1% each year.”
Of this 37%, half of the capacity is in own-built, owned data centers, and half in leased facilities. Meanwhile, non-hyperscale colocation capacity accounts for 23% capacity, with on-premise data centers making up just 40% of the total.
Further, the group forecast that hyperscale operators will account for over half of all capacity, with on-premise dropping to under 30%.
This is a big change from five years ago, when almost 60% of data center capacity was in on-premise facilities, and even further back, ten years ago, enterprises were spending over $80 billion per year on IT hardware and software for their own data centers. This has only grown by an average 2% per year, while cloud services expenditure surged to $227 billion in 2022.
That being said, the report noted on-premise data centers are not expected to disappear completely; but maintain a relatively steady capacity, experiencing a slight annual decline.
“Given all of the excitement over the growth of hyperscale operators and the big push towards enterprises outsourcing datacenter facilities, you might assume that the days of on-premise datacenters are numbered,” commented John Dinsdale, chief analyst and research director at Synergy.
“That is not true and the total capacity of on-premise datacenters will remain reasonably steady over the next five years, actually declining by an average of just a fraction of 1% each year.”