As the world becomes more and more accustomed to digital remote means to meet the demands of work and life, we need to keep upgrading IT and network capacity, which means building more data centers. As the core of the future digital world, the number and scale of data centers have been growing rapidly. National and local governments are also intensively introducing relevant policies to regulate their construction and operation in order to achieve the goal of efficient and sustainable development.
I. Data Center Industry Continues to Grow Steadily
The fourth industrial revolution driven by digital technology is bringing profound changes to human production and life, and data centers, as the physical base for carrying various digital technology applications, are gradually highlighting their industry-enabling value. Internationally, major countries around the world are actively guiding the development of data center industry, and the scale of data center market is expanding, with active investment and mergers and acquisitions, and increasingly fierce competition. Domestically, the development of the "new infrastructure" and the construction target of Digital China in the 14th Five-Year Plan have provided important guidance for the construction of China's digital infrastructure, and the development of China's data center industry has entered a new stage, with the scale of data centers steadily increasing and the pattern of low-carbon, high-quality and coordinated development. The scale of data center industry in China has steadily increased, and a pattern of low-carbon, high-quality and coordinated development is gradually taking shape.
(1) In terms of scale, the number of new data centers worldwide is relatively stable, while China maintains rapid growth.
Global data center additions are relatively stable. According to the annual increase of global servers, the scale of new servers put into use from 2015 to 2021 is relatively stable, and the net added value is also relatively stable, and the scale of data centers is expected to maintain steady growth in the next few years, as shown in Figure 1.
China's data center rack scale continues to grow steadily, and the scale of data centers above large scale is growing rapidly. In recent years, the scale of data center racks in China has been growing steadily. According to the standard rack 2.5kW, by the end of 2021, the scale of data center racks in use in China will reach 5.2 million racks, with an average annual compound growth rate of over 30% in the past five years. Among them, the rack size of data centers above large scale is growing more rapidly, with 4.2 million racks according to the standard rack 2.5kW, accounting for 80% of the rack size.
(2) Revenue, the global market is growing steadily, and China maintains a high growth rate
In terms of data center market revenue, the global data center market size will exceed US$67.9 billion1 in 2021, up 9.8% from 2020. The market revenue is expected to reach $74.6 billion in 2022, with an overall stable growth rate, as shown in Figure 3.
Driven by national policies such as new infrastructure, digital transformation and Digital China Vision, as well as enterprise demand for cost reduction and efficiency improvement, China's data center business revenue continues to grow at a high rate. In 2021, the market revenue of China's data center industry will reach about 150 billion RMB2, with an average annual compound growth rate of 30.69% in the past three years.
(3) Demand, strong demand in emerging markets and diverse application scenarios in China
The "Digital India" plan launched in 2015 provides a continuous boost to India's digital development, and the construction of large data centers is an important part of the plan. In 2021, South Africa's Department of Communications and Digital Technology released a draft National Data and Cloud Policy, which provides guidelines for the construction of a National High Performance Computing and Data Processing Center, which will be a merger of the existing Sentech and Broadband Infraco data centers, and will provide cloud services to all levels of government, enterprises and universities. These data centers will provide cloud services to all levels of government, enterprises and universities. The government-led data center construction will lay a solid foundation for the development of South Africa's digital economy.
In terms of market, India is becoming increasingly rich in smart devices and digital consumption scenarios, with a surge in demand for data reckoning and storage, while the intensification of the new crown epidemic has shifted more offline business activities to online. Multinational companies remain optimistic about the development of India's digital economy and are strengthening their digital service capabilities through data center construction. Amazon is investing $2.8 billion in 2020 to establish a new service area in Telangana, India, which will be Amazon's second cloud computing region in India.
(4) Competition, Expanding Arena, M&A to Drive Stronger Players
In order to enrich business sources, the top data center operators are actively expanding outside their home markets and expanding their industrial footprints. Basic telecom operators, such as China Telecom, China Mobile, CenturyLink and NTT Communications, and third-party data center operators, such as Equinix, Digital Reality Trust and Universal Data, have already held large-scale data center resources in the local market by virtue of their early start in construction. In the course of their development, basic telecom operators and third-party data center operators have relied on their resources, capital and technological R&D advantages to accelerate their data center deployment globally by cultivating their own brands, expanding international marketing channels and providing a full range of data center services.
For example, Equinix, the world's leading data center operator, has data centers in Singapore, Hong Kong, Tokyo, Sydney, and Jakarta; UP Data will have a preliminary market presence in Southeast Asia by 2021 and will invest in mega data center parks in Malaysia and Indonesia; and China Mobile International Limited (CMI) will commission its data center in Frankfurt, Germany, by 2021. The global data center arena will further expand as more and more giant companies move beyond their local markets and actively expand their data center footprints.
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