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Hyperscale growth increases - here's what’s driving demand

By Luke Smith · 8/18/2020

Based on datacenterHawk’s analysis of the first half of 2020, North American and European data center markets have already surpassed several key annual figures when compared to 2019.

The top US data center markets have increased by 423 MW of commissioned power in 2020, an uptick of approximately 11%. By comparison, it took all of 2019 for these same markets to grow 413 MW. Similar trends are taking place in Europe as well.

Hyperscale User Growth Reinvigorates The Market

The primary force behind the growth at the moment is demand from the largest data center customers - hyperscale users.

Hyperscale demand continues to be one of the most influential trends in the industry. Multiple requirements of 10+ MW were completed across major markets in the US and Europe in the first half of 2020 and additional companies with large requirements continue to evaluate the market.

The bulk of 2020’s hyperscale leasing occurred in Northern Virginia. Other markets eyed for future hyperscale growth include Atlanta, Northern California, Phoenix, Chicago, Dallas, and Portland.

Hyperscale Customers Value Scalability, Speed to Market, & Flexibility

As hyperscale growth continues across the world, scalability, speed to market, and flexibility have increased in importance.


One of the challenges experienced by companies with large data center requirements is accurately predicting when they’ll utilize the capacity, which is why scaling the power need over time is an advantage. They also often expand past the original commitment and require even larger deployments.

In response, data center operators have worked to establish facility designs that are capable of meeting the known needs of today and the unknown needs of tomorrow. Developing multi-building campuses continues to be a trend and it’s common for large customers to request rights-of-refusal on additional buildings for growth as well.

Speed to Market

Although some of these requirements start small and grow, others are driven by immediate capacity needs. When this is the case, a quick timeline to deliver capacity can be the higher priority. This is why data center providers have long-term growth plans in major and secondary markets across the world.


Because hyperscale customer needs are unique, they often require deal structure flexibility. A user may apply this flexibility to data center infrastructure, compliance and certification, services, and pricing.

Looking Forward

While we anticipate the momentum to continue through the end of the year, it’s likely the second half of 2020 will be lighter than the first half. However, large data center requirements remain active and several notable opportunities are circling major markets.

2020 is on track to be one of the strongest years for the data center industry. If you want to learn more about the data center industry and the direction of the market moving forward, sign up for a reminder of our 3Q 2020 Insight release.

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