‘Data Center Building Boom:’ Over 500 Hyper-Scale Data Centers Now Open

'This is good news for wholesale data center operators and for vendors supplying the hardware that goes into those data centers,' says John Dinsdale, chief analyst and research director at Synergy Research Group.

Hyper-scale data center cloud operators including Amazon, Google, Microsoft and Oracle have been building huge data centers at a historic rate over the past six years, with the number of hyper-scale data centers tripling since 2013.

At the end of the third quarter of 2019, 504 large data centers were being operated by hyper-scale providers with more than 150 new data centers on the way, according to Synergy Research Group, which tracks the data center market.

“There were more new hyper-scale data centers opened in the last four quarters than in the preceding four quarters, with activity being driven in particular by continued strong growth in cloud services and social networking,” said John Dinsdale, chief analyst and research director at Synergy Research Group, in a statement. “This is good news for wholesale data center operators and for vendors supplying the hardware that goes into those data centers.”

[Related: Equinix’s Massive $1 Billion Hyper-Scale Data Center Venture Begins]

Hyper-scale data centers are large facilities containing tens of thousands of servers and other IT equipment. In addition to the 504 current large data centers, Synergy said there are another 151 data centers in various stages of planning or building, “showing that there is no end in sight to the data center building boom.”

Hyper-scale operators are investing Capex at a record pace this year. In the second quarter of 2019 alone, operators spent $28 billion on building, expanding and equipping these huge data centers.

The companies with the broadest data center footprint are Amazon, Microsoft, Google and IBM, each of which have 60 or more centers located infour major regions around the world.

Amazon and Microsoft have opened the most new data centers over the past 12 months, accounting for over half of the total new data centers being built, followed by Google and Alibaba, according to Synergy.

The U.S. accounts for almost 40 percent of the major cloud and internet data center sites. The next most popular locations are in China, Japan, the U.K., Germany and Australia, which combined account for 32 percent.

The data center market is also on fire in terms of the amount of acquisitions being made in 2019. The market is on pace to break the record this year after a whopping 52 data-center-oriented acquisitions closed in the first half of 2019.

More than 70 percent of all hyper-scale data centers are in facilities that are leased from data center operators or owned by partners of hyper-scale operators. Synergy’s research is based on an analysis of 20 of the world’s major cloud and internet service providers including the largest Software as-a-Service, Infrastructure as-a-Service, search, e-commerce and gaming operators.