The number of large data centers operated by hyperscale companies has recently surpassed the 1,000 mark, according to new data from Synergy Research Group.
These hyperscale data centers now account for 41 percent of the worldwide data center capacity. Just over half of this capacity is located in self-built, owned facilities, while the remainder is in leased facilities. Non-hyperscale colocation capacity makes up another 22 percent of the total, leaving on-premise data centers with just 37 percent. This marks a significant shift from six years ago when on-premise facilities accounted for nearly 60 percent of data center capacity.
Projected Trends and Capacity Growth
Looking ahead to 2029, hyperscale operators are expected to account for over 60 percent of all data center capacity, while the share of on-premise facilities will drop to just 20 percent. During this period, the total capacity of all data centers will continue to rise rapidly, primarily driven by hyperscale capacity growing almost threefold. Although the colocation share of total capacity will decrease, its actual capacity will continue to rise steadily. In contrast, the share of on-premise data centers will drop by nearly three percentage points annually, though their actual capacity will remain relatively stable.
Regional Variations and Spending Shifts
The Synergy data is derived from comprehensive quarterly tracking research, offering detailed analysis by region, country, and metro markets. Hyperscale data center capacity is significantly more prevalent in the US compared to Europe and the APAC region. The shift in enterprise spending is a major factor behind these trends. In 2012, enterprises spent twelve times more on data center hardware and software than on cloud infrastructure services. Today, they spend three times more on cloud services than on their own data center infrastructure.
Factors Driving Hyperscale Growth
The massive growth in SaaS, consumer-oriented digital services such as social networking, e-commerce, and online gaming, has fueled the expansion of hyperscale data centers. Enterprises are increasingly opting to house their data center equipment in colocation facilities, reducing the need for on-premise capacity.
Future Outlook with AI
“The rise of generative AI technology and services will only exacerbate these trends over the next few years, as hyperscale operators are better positioned to run AI operations than most enterprises,” said John Dinsdale, Chief Analyst at Synergy Research Group. This trend indicates that hyperscale data centers will continue to dominate the landscape, driven by advancements in AI and the ongoing shift towards cloud services.
