Over the past decade, the once-niche piece of IT infrastructure- data centers- has become the talk of the investment world and a massive revenue driver for tech giants. Amazon Web Services generate almost 20% of the ecommerce giant`s revenue today. At the same time, Nvidia, the supplier of parts for modern cloud storage and processing data centers, has grown into the world`s third-largest tech company. The surging use of AI technologies, which require significant computing power and storage, has only fuelled the data center boom, which is expected to continue in the following years.
According to data presented by Stocklytics.com, the global data center market is expected to grow by 30 per cent and hit over $430 billion value by 2028. A 2023 report by technext24.com had also revealed that Nigeria’s data centre market was expected to hit a valuation of $288.8 million by 2027. This is according to a report by Research and Markets titled Nigeria Data Centre Market Outlook to 2027. According to the report, Nigeria’s data centre market reached an estimated value of $131.6 million in 2022, thus, by 2027, the market is expected to have experienced a growth of approximately 220 per cent.
This suggests that the Nigerian data centre market is also on its path to significant expansion. Stocklytics.com believes that the widespread adoption of cloud computing has significantly transformed the data center landscape. While it has reduced the number of organisations operating their own data centers, it has also spurred a surge in the global data center count. This is largely due to the aggressive infrastructure expansion by major hyperscalers like Microsoft Azure, Google Cloud Platform, and Amazon Web Services to cater to their growing customer base.
Other tech giants, like Nvidia, have also reaped the benefits of this trend, with its GPUs becoming an integral part of modern data centers. The surging need for data center solutions and technology has helped the entire market grow revenues by almost 40% since 2016. However, the market projections for the following years are just as optimistic. According to a Statista Market Insights survey, the global data centers market is expected to gross over $344 billion in revenue this year, $15 billion more than in 2023.
The entire market is projected to grow by a CAGR of 6.5 per cent in the following years, resulting in a market volume of $438 billion by 2028. Most of that value will come from network infrastructure, the market`s largest and fastest-growing segment. Statista expects the network infrastructure to bring in $256.1 billion in revenue in 2028, almost 30 per cent more than this year. Data center servers follow with $120 billion in revenue and a 24 per cent growth in this period.
Although far behind in revenue, the data center storage segment will also see double-digit growth, with revenue rising by 22 per cent to $62 billion in the next four years. The Statista data also gave an interesting insight into the biggest drivers of data center market growth and which countries have the highest share in total revenue. Statistics show that GDP growth was the single largest market driver, with a 3.2 per cent share in total market growth last year.
The impact of the Russia-Ukraine war, which led to increased demand for data center services due to geopolitical tensions and cybersecurity concerns, followed, with 2.3 per cent share in total market growth. Technology adoption and innovation also played a significant role, with a 1.9 per cent share. In global comparison, the United States will remain the single largest player in the global data center landscape, generating nearly $100 billion, or roughly 30 per cent of total market revenue in 2024.
This figure is expected to grow by 25 per cent and hit over $125 billion by 2028. Although Chinese data center revenues are far from these figures, the Chinese market will see the biggest growth in the following years. Statista expects the Chinese data centers segment to increase by 33 per cent and hit a $93 billion value by 2028. Other top markets, Japan, Germany, and the United Kingdom, will see similar growth rates, with their revenues growing by 32 per cent, 27 per cent, and 31 per cent in this period, respectively.