Our Data Center Research Service estimates that there are 24 metropolitan markets that have more than 1 million square feet of operational data center capacity and four-year CAGR of at least 10%.
Nine of those 24 markets are in Asia and seven are in Europe. Even more extraordinary—four of the Asian markets are in India alone.
The data center market is in the midst of an unprecedented shift that started—publicly at least—five years ago with the announced moratoria on new development in Singapore and Frankfurt. Those regulatory interventions highlighted the challenges the industry faces in securing sufficient power.
Since then, it turned out that data centers would need much more power than had been realized—just at a time when regulators and community organizations were growing increasingly critical of the sector's existing demand.
Our Data Center Research Service estimates that, as of 2024, colocation operators in the top ten data center markets by MW consume about 13 gigawatts (GW) of power.
That's enough power to generate electricity for roughly 10 million homes—or, in this case, only about 1,000 commercial data centers!
Many of the world’s top data center markets face issues such as rising energy costs, connectivity, and in some cases, moratoriums on new data center buildouts.
To help decision-makers navigate these challenges and prepare for the future, we’ve launched the Market Connectivity Score (MCS), a dynamic tool that measures current and potential connectivity and data center market size for 3,000 cities worldwide.
As of Q4 2024, the MCS ranks Kuala Lumpur, Malaysia as the fastest-growing city for near-future connectivity infrastructure growth.
To many people, the concepts of global network infrastructure and bandwidth markets are difficult to grasp. But to those who follow this sector, it's one of the most fundamental building blocks of the global economy.
If you haven't heard of TeleGeography’s Transport Networks Research Service, it's one of our most popular research subscriptions. In short, this tool assesses the state of the global telecom capacity market—and we just finished updating it with tons of new data and analysis.
So now is the perfect time for us to answer the question: what's fueling the changes we see in the global bandwidth market?
When it comes to the nature of exploration, there are typically a number of underlying forces at play, some positive and some negative.
The “pioneering spirit” could be inspired by the excitement of new opportunities, or by the pressure of existing difficulties.
The data center market happens to be dealing with both of those sentiments right now, with several factors driving it to new places.
By any measure, the global bandwidth market is thriving. International bandwidth demand has nearly doubled from 2020 to 2022, and has now reached 3.8 Pbps.
Meanwhile, the lit capacity on major submarine cable routes continues to soar, keeping pace with demand.
How? Is the network getting faster?
Not quite. Think bigger highway, not faster cars.
The pressures of supply chain disruptions, electricity price volatility, and government intervention are impacting prices in the global colocation market.
As we continue to move through 2023, here are a couple of trends to keep an eye on.
By our 2023 estimates, the Washington metropolitan area—or more specifically Northern Virginia (NoVA)—dominates as the world's largest data center market.
With more than 22 million square feet of operational capacity, NoVA is 30% larger than the next-biggest data center hub, Tokyo.
What else does the most recent update to our Data Center Research Service tell us?
Recently, we’ve been closely monitoring the intensifying pressures of insatiable demand and supply constraints in key data center markets.
Supply constraints have come in the form of both short-term and long-term challenges.
In the short term, supply chain disruptions have hindered development timelines. On the long-term side, regulators and utility providers have begun taking a hard look at the data center sector and how to grow it sustainably going forward. In some cases, these entities have severely disrupted development during the interim period.
None of these challenges have been resolved. And as we move through 2023, another major disruptive component has been added to the mix—the accelerated growth of generative Artificial Intelligence (AI).
When it comes to the nature of exploration, there are typically a number of underlying forces at play, some positive and some negative.
The “pioneering spirit” could be inspired by the excitement of new opportunities, or by the pressure of existing difficulties.
The data center market happens to be dealing with both of those sentiments right now, with several factors driving it to new places.
The global data center market is under an unprecedented squeeze as we move into 2023.
On one hand, we have a long-term challenge surrounding the sustainability of the industry’s growth trajectory in essential hub markets. On the other, we have an acute short-term problem with energy prices in the colocation sector.
These issues combine to create an uncomfortable phase in the market right now.
