U.S. Data Center Market (By Component; By Type; By Server Rack Density; By Redundancy; By PUE; By Tier Level; By Enterprise Size; By End-use) - Industry Analysis, Size, Share, Growth, Trends, Revenue, Regional Outlook and Forecast 2024-2033

The U.S. data center market size was estimated at around USD 56.26 billion in 2023 and it is projected to hit around USD 156.47 billion by 2033, growing at a CAGR of 10.77% from 2024 to 2033. The U.S. data center market is driven by the imperative of digital transformation across industries, cloud adoption, increased connectivity requirements, data security and compliance, and artificial intelligence and machine learning.

Key Pointers

• By Component, the hardware segment held the largest market share in 2023.
• By Type, the on-premise segment had the largest market share in 2023.
• By Server Rack Density, the 10-19kW segment contributed the largest market share in 2023.
• By Redundancy, the N+1 segment held the highest market share in 2023.
• By Tier Level, the tier 3 segment generated the maximum market share in 2023.
• By Enterprise Size, the large enterprise segment captured the maximum market share in 2023.

U.S. Data Center Market Overview

In the rapidly evolving landscape of information technology, data centers play a pivotal role in supporting the digital infrastructure that fuels businesses, organizations, and everyday life. The U.S. data center market stands at the forefront of this technological revolution, serving as a cornerstone for innovation, connectivity, and data storage. This overview aims to shed light on the key aspects shaping the U.S. data center market, from its current status to future trends.

U.S. Data Center Market Growth

The growth of the U.S. data center market is propelled by several key factors. Firstly, the pervasive wave of digital transformation sweeping across industries has intensified the need for robust data storage and processing capabilities. Businesses, driven by the imperative to harness data-driven insights, are increasingly investing in advanced data center solutions. Furthermore, the ascent of cloud computing has significantly contributed to market expansion, with cloud service providers continually establishing new facilities to meet the escalating demand for diverse cloud-based services, including IaaS, PaaS, and SaaS. The advent of edge computing, spurred by the proliferation of IoT, has further augmented growth by necessitating strategically located data centers for reduced latency and enhanced real-time processing. These growth factors collectively underscore the dynamic nature of the U.S. data center market, positioning it as a critical pillar in supporting the evolving digital infrastructure landscape.

Report Scope of the U.S. Data Center Market

U.S. Data Center Market Dynamics

Drivers

• Digital Transformation: The U.S. data center market is driven by the imperative of digital transformation across industries. As businesses seek to leverage data for informed decision-making and operational efficiency, the demand for advanced data storage and processing capabilities has significantly increased.
• Cloud Adoption: A major driver for the U.S. data center market is the widespread adoption of cloud computing. Cloud service providers are continually expanding their infrastructure to cater to the growing demand for scalable and flexible cloud-based services, encompassing IaaS, PaaS, and SaaS solutions

Restraints

• Energy Consumption Concerns: A notable restraint for the U.S. data center market is the substantial energy consumption associated with these facilities. The continuous demand for increased computing power and cooling systems contributes to a significant carbon footprint. Addressing the environmental impact and implementing energy-efficient practices pose challenges for sustainable growth in the industry.
• Environmental Impact: The environmental impact of data centers, including the generation of heat and the use of non-renewable energy sources, raises concerns about sustainability. Balancing the need for expanding data center infrastructure with minimizing the environmental footprint is a critical challenge that the industry faces.

Opportunities

• Renewable Energy Integration: Embracing renewable energy sources presents a significant opportunity for the U.S. data center market. The integration of solar, wind, and other sustainable energy solutions can mitigate the environmental impact, reduce operating costs, and align data center operations with green initiatives, enhancing overall sustainability.
• Edge Data Center Expansion: The growing demand for edge computing creates opportunities for the expansion of edge data centers. Strategically positioning these facilities closer to end-users enables low-latency processing, catering to the requirements of emerging technologies such as IoT, augmented reality, and autonomous vehicles.

Component Insights

Based on the components, the U.S. data center market is segmented into hardware, software, and services. The hardware segment held the largest market share in 2023. The substantial growth of social media, digital transactions, and the Internet of Things (IoT) in the U.S. requires data centers to expand their storage and processing capabilities. The upgradation of hardware technologies such as CPU, servers, storage devices, GPU, and memory drives to store the burgeoning data requires data centers to update their hardware installations, thereby driving the hardware segment of the data center market. Further optimized hardware solutions are required to accelerate complex tasks and model training.

Type Insights

Based on the type, the U.S. data center market is segmented into on-premise, hyperscale, HPC, colocation, and edge. The on-premise segment had the largest market share in 2023. On-premise data centers provide enterprises with complete control over the security and data stored, following the stringent compliance requirements based on industry standards or sensitive data handling necessities. Also, managing and building on-premise data centers enables for the customization of infrastructure to fulfill the required needs of the business, performance demands, and application needs. On-premise data centers further form an ideal type for applications requiring high performance and low latency, as they help in faster data transmission and optimized user experience. These factors are collectively supporting the growth of the on-premise segment.

Server Rack Density Insights

Based on the server rack density, the U.S. data center market is segmented into <10kW, 10-19kW, 20-29kW, 30-39kW, 40-49kW, and >50kW. The 10-19kW segment contributed the largest market share in 2023. The 10-19kW server rack density is known for its medium to high power consumption. Data centers with 10-19kW power densities mainly apply across industries, effectively supporting high-performance computing tasks. Engineering simulations, scientific research, and financial modeling need substantial computing power. This growing demand is expected to boost segmental growth, thereby fueling the growth of the U.S. data center market across regions.

Redundancy Insights

Based on the redundancy, the U.S. data center market is segmented into N+1, 2N, N+2, and N. The N+1 segment held the highest market share in 2023. N+1 redundancy provides high processing and minimized downtime to data centers. Downtime in business processes leads to significant financial losses and damage to an enterprise’s position. N+1 redundancy offers a backup system, allowing operations to continue even after any failure in the component. Many businesses are adopting cloud-based services and online transactions, where uninterrupted availability is important. The N+1 redundancy segment offers this service, thereby propelling the U.S. data center market growth.

PUE Insights

Based on the PUE, the U.S. data center market is segmented into Less than 1.2, 1.2 - 1.5, 1.5 - 2.0, and, greater than 2.0. Data centers with 1.2 to 1.5 power usage efficiency (PUE) are considered highly efficient in terms of energy consumption. The growing demand for environmentally friendly and sustainable operations is accelerating the adoption of advanced technology solutions such as 1.2-1.5 PUE, thereby propelling the demand for the U.S. data center market. Furthermore, the need for long-term financial savings through lower operational costs and reduced energy consumption is anticipated to generate huge demand for the segment.

Tier Level Insights

Based on the tier level, the U.S. data center market is segmented into tier 1, tier 2, tier 3, and tier 4. The tier 3 segment generated the maximum market share in 2023. The demand for efficient and reliable data processing and storage solutions is expected to grow for the segment. The continuous digital transformation across sectors needs more processing power, connectivity, and data storage, which tier 3 level data centers mainly provide. Further, the government has been adopting stringent data protection and security regulations, where tier 3 level data centers are highly adopted by organizations to meet the standards.

Enterprise Size Insights

Based on the enterprise size, the U.S. data center market is segmented into large enterprises and SMEs. The large enterprise segment captured the maximum market share in 2023. Large enterprises create and handle massive data from multiple sources, such as customer transactions, interactions, and operations. Further, there has been a rise in the adoption of cloud computing to boost operations, enhance scalability, and minimize costs. The data center offers capabilities to support advanced technologies and applications. It is vital in housing cloud infrastructure, promising reliable access to cloud services. The growing global operations and advanced technologies are driving the growth of the market across large enterprises.

End-use Insights

Based on the end-use, the U.S. data center market is segmented into cloud service providers, technology providers, telecom, healthcare, BFSI, retail & e-commerce, entertainment & media, energy, and others. The adoption of cloud computing services by organizations, businesses, and people is likely to increase demand for data centers, which will fuel market expansion. Data accessibility and company continuity are ensured by the disaster recovery and backup capabilities offered by cloud services. Additionally, edge computing services that permit data closer to its sources and hence reduce latency are advantageous to cloud service provider end users. These elements are promoting the expansion of the U.S. data center industry.

Key Companies

• Alibaba Cloud
• Amazon Web Services Inc.
• AT&T Intellectual Property
• Lumen Technologies (CenturyLink)
• China Telecom Americas Inc.
• CoreSite
• CyrusOne
• Digital Realty
• Equinix Inc.
• Google Cloud
• IBM
• Microsoft
• NTT Communications Corporation
• Oracle
• Tencent Cloud.

U.S. Data Center Market Segmentations:

By Component

• Hardware
• Software
• Services

By Type

• On-Premise
• Hyperscale
• Hpc
• Colocation
• Edge

By Server Rack Density

• <10kw
• 10-19kw
• 20-29kw
• 30-39kw
• 40-49kw
• >50kw

By Redundancy

• N+1
• 2n
• N+2
• N

By PUE

• Less Than 1.2
• 1.2
• - 1.5,
• 1.5
• - 2.0,
• Greater Than 2.0

By Tier Level

• Tier 1
• Tier 2
• Tier 3
• Tier 4

By Enterprise Size

• Large Enterprises
• SMEs

By End-Use

• Cloud Service Providers
• Technology Providers
• Telecom
• Healthcare
• Bfsi
• Retail & E-Commerce
• Entertainment & Media
• Energy
• Others