More than half of global utilized racks—minus server rooms, closets, micro data centers and telco hubs—will be located at off-premises facilities, including cloud and colocation sites, by year-end 2024, according to report from 451 Research.
Total worldwide data center installed-base growth will continue to slightly decline, at a -0.1% CAGR between 2019-2024, according to the report, but overall total capacity in terms of space, power and racks will continue to increase as organizations shift toward larger data centers.
Driven by hyperscale cloud providers such as Google, Amazon Web Services and Microsoft Azure, organizations are moving their workloads to the cloud and data to the network edge, which is driving the need for more data center and colocation facilities. Services and applications such as video, IoT and, at some point, low-latency 5G are also driving continued bandwidth consumption.
Enterprise IT is moving outward and becoming more distributed, which means enterprises are relying on cloud providers. Because enterprises are going to the cloud, what used to be an enterprise data center could now be a colocation tenancy inside of someone else's data center with different functions that can then be pushed to clouds such as Amazon Web Services or Microsoft Azure.
"Across all owner types and geographic locations, cloud and service providers are driving expansion, with the hyperscalers representing the tip of the spear," said Greg Zwakman, vice president of market and competitive intelligence at 451 Research, in a statement. "We expect to see a decline in utilized racks across the enterprise, with a mid-single-digit CAGR increase in non-cloud colocation, and cloud and service providers expanding their utilized footprint over 13%."
The data center services and infrastructure market monitor report also found that server rooms and closets account for nearly 95% of total data centers, but only 23% of total utilized racks in 2019. A majority of enterprise data center space (60%) is accounted for by data centers smaller than 10,000 square feet.
Overall, the top six hyperscalers account for 42% of total cloud and service providers' utilized racks in 2019. 451 Research expects that to expand at an 18% CAGR, reaching 50.4% of the total by 2024.
Rack demand for supporting IoT workloads and IoT data storage is expected to grow at a 46% CAGR from 2019 to 2024 – accounting for 15% of total global data center racks by year-end 2024.
For this year, the average multi-tenant data center is nearly nine times larger than an enterprise data center, excluding rooms, closets and micro data centers and telco hubs. Server rooms and closets account for nearly 95% of total data centers, but only 23% of total utilized racks in 2019.