Hyperscale data center construction flourished despite pandemic: Report

March 1, 2021
Omdia reports that, despite the economic and logistical obstacles COVID-19 posed, cloud and colocation service providers opened 7.8 million square feet of data center capacity in the first half of 2020 alone.

Cloud and colocation service providers, particularly the largest ones, maintained an aggressive pace when it came to data center construction last year, according to new research by Omdia.

The market analyst firm says that, despite the economic and logistical obstacles COVID-19 has posed, such companies opened 7.8 million square feet of data center capacity in the first half of 2020. The current estimate for the second half of 2020 is 9 million square feet, Omdia finds in its latest Cloud & Colocation Data Center Building Tracker report.

Even more capacity should be added this year, states the analyst.

“Cloud and colocation service providers have been benefactors of increased SaaS and network customer demand from the pandemic response necessitating remote working and educating,” explains Alan Howard, principal analyst in the Cloud and Data Center Research Practice at Omdia. “These services are particularly recession-resistant and demand for services has been increasing, which translates to data center construction projects remaining in progress to assure they can meet demand."

The new report from Omdia states that about 57% of the new capacity added in the first half of 2020 came from the large cloud service providers such as AWS, Google and Microsoft.

The expected total for the second six months of the year, as well as the 25 million square feet expected to be added this year, will correspond to what Omdia describes as “sustained secular demand trends already in place,” with increased spending from enterprises who seek to mitigate risk via digital transformation initiatives, further buttressing demand for new data center capacity.

“Many service providers have said that non-critical data center projects could be delayed, but as far as data centers go in this market, we don’t see many non-critical projects," Omdia's Howard continued. "In fact, if you look at just Amazon, Google and Microsoft, collectively they have announced 28 new regions, most with multiple zones."

Much of the new capacity will appear in the Asia Pacific region, although growth in North America will continue to be strong, particularly in the second half of this year, Omdia indicates in its chart above.

Learn more about the research.

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