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The Future of Hyperscale Data Centers
The Future of Hyperscale Data Centers

By Mike Netzer · 11/17/2021

Read back through our series on hyperscale data centers and you’ll notice the consistent reappearance of one word in particular: growth. With the creation of over 200 new hyperscale data centers between 2017-2020, the U.S., Europe, and Asia Pacific regions are experiencing a boom in hyperscale services.

But what about the future? Will the location strategy change over time, or can all parties and places expect continued expansion? And lastly, will the sustainability topic ever be fully answered? We sat down to look at the stats and see just what the future of hyperscale data centers may have in store.

How will hyperscale users continue to grow into the future?

Over the last five years, the top four hyperscale data center users have grown by an average of 26% per year. For this type of expansion to continue, a few things need to happen.

First, growth appears tied to the continual adoption of public cloud. Surveying the industry as a whole, it doesn’t seem like that growth has any plans to slow down. Hyperscale data centers continue to master the public cloud and cloud services industries as they also expand their business into other related verticals.

Second, there will continue to be tradeoffs in the hyperscalers who own vs. those who lease. Companies are leasing more as a percentage of their total, but it’s unclear if that balance will continue. The demand across hyperscale data centers is too great for only one of these options to grow. Hyperscale users are consistently growing at a speed that requires flexibility across centers, whether they own them or lease them.

Combine that with the fact that those doing the leasing from the data center operator perspective have gotten a lot better. Their facilities, their design, and their PUE, are capable of fitting the user footprint much better than they could five or ten years ago. So, while the percentage of owned vs. leased hyperscale data centers may change, it’s unlikely that we’ll ever see groups commit to one type of growth pattern ever again.

How will hyperscale location strategy change over time?

Looking at how the top four companies are utilizing hyperscale data centers across different cities, a few locations quickly rise to the top.

  • Northern Virginia: 3,700 MW
  • Des Moines: 591 MW
  • Omaha: 400 MW
  • Columbus: 392 MW
  • Phoenix, Atlanta, and Dallas: 310-360 MW
  • Prineville, Kennewick: 275-285 MW

While several places on this list are in what could be considered non-traditional colocation markets, they’ve long had a large footprint compared to other cities that are closer to end users.

Places like Northern Virginia and Des Moines were cities who knew the impact that building hyperscale data centers would have on their overall economic growth. Now, others are starting to catch wind of what those places have long known.

For the future of hyperscale data centers, demand will be pushed more towards major colocation markets for several reasons. One, the cost of delivering to end users located far away is high. We will continue to see a trend of hyperscale data centers moving toward the people they serve. Combine that with the economic incentives being provided for new sites and it’s likely that the trend of additional growth in more traditional (at least from a multi-tenant perspective) data center markets will continue.

How will hyperscale data centers answer the sustainability question?

It seems that every large hyper scale company has made a commitment to become some variation of carbon neutral or 100% renewable or net zero carbon in the coming years. Without going down the rabbit hole of what each of those mean, the time frame they all appear to be moving toward is sometime in the next decade.

  • Microsoft plans to be carbon negative by 2030.
  • Facebook is moving toward 100% renewable energy by 2030.
  • Google has stated they will have 24/7 carbon-free energy by 2030.
  • Amazon has promised 100% renewable energy by 2030 and being net-zero carbon by 2040.

In the infancy of the data center industry, this topic wasn’t front of mind, but now it’s one of the first things people ask. Considering the massive energy footprint that data centers have, the industry is now poised to lead the global movement toward renewable-powered business. This is also driven by the accountability that comes from both customers and stakeholders who want to know the impact these data centers are having on the environment.

With the data center industry using somewhere between 2-5% of the world’s electricity, the renewable conversation will only increase in importance moving forward. Plus, as power companies and power providers look at their fuel mix and try to discern how to reach the renewable energy goals these companies are setting, those are long-term decisions that cost a lot of money. If the use of capital reveals anything about our priorities, it’s clear that hyperscale data centers are serious about finding solutions and finding them soon.

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