451 Research: Weak Demand for New Data Center Facilities Worldwide

The worldwide data center install base grew at +0.2% Y/Y in Q4 2014 to 4.3 million data centers and IT sites, according to 451 Research’s “Voice of the Enterprise: Datacenters” quarterly report. The weak demand for new data center facilities was primarily driven by a decline in traditional enterprise demand, particularly in mature markets.

451-researchThis decline was offset by the booming demand for large premium and hyper-scale facilities from cloud, service provider and multi-tenant datacenter vendors. While data centers from those organizations are typically very large, from a data center count perspective they are still the minority, representing only 5% of the market combined when server closets and rooms are excluded. 

From a square footage perspective, enterprises continue to control the vast majority of the worldwide market, at 83%. Multi-Tenant Datacenter Providers (colocation) and cloud hosting providers control 12% and 5%, respectively.

colocation-oklahomaThe balance will continue to shift over time as enterprises invest less in their own datacenter spaces and become more comfortable with relying on third parties. “Investment in new datacenter space by traditional enterprises is being propped up only by the sheer force of growing organic demand for IT resources,” said Daniel Harrington, Research Director, Enterprise Datacenters. “Almost all the overarching market trends are working against the need for enterprises to build out more of their own datacenter space.” 

Other highlights from the Voice of the Enterprise: Datacenters study include:

  • Developed markets such as North America and Europe declined 1% and 2% respectively. This was offset by an increase in emerging markets such as APAC, LATAM and MEA, which all grew at 2% year over year.
  • Continued enterprise consolidation led to flat to declining growth for server closets and rooms in most regions. The same consolidation trend has led to a continued build-out of centralized premium datacenters.
  • Hyper-scale datacenters grew at 4%, led by strong demand from cloud and service providers (15%).

About the Study

Published quarterly, 451 Research‘s “Voice of the Enterprise: Datacenters” combines a market-sizing forecast model with comprehensive, survey-driven analyst reports derived from 900 Web-based surveys and 25 hour-long in-depth interviews with senior IT professionals.