Micro Data Center Market is expected to reach US$ 10,253.85 million by 2030

Increasing Proliferation of Cloud-Based Services Drives Micro Data Center Market Growth

According to our latest study on “Micro Data Center Market Size and Forecasts (2020 - 2030), Global and Regional Share, Trends, and Growth Opportunity Analysis – by Rack Type, Organization Size, and End User,” the micro data center market size was valued at US$ 3,650.00 million in 2022 and is expected to reach US$ 10,253.85 million by 2030; it is estimated to record a CAGR of 13.8% from 2022 to 2030.

A micro data center is a miniaturized modular data center that includes all the computer, networking, storage, cooling, power, and other infrastructure required for a given workload. They are small enough to be deployed in locations where a traditional or full-scale data center would be impractical. This permits enterprises to cost-effectively solve the low-latency data processing and storage challenge. In the past few years, the rising adoption of the Internet of Things (IoT), content delivery, and 5G have created a surge in demand for low-latency access to data processing and storage. Traditional full-scale data centers, such as those used by Microsoft Azure and Amazon Web Services, were not designed for such applications. While these full-scale data centers enable cloud computing and create economies of scale, they are not capable of economically bringing data processing for these distributed workloads use cases close enough to end users. Micro data centers are shipped preassembled, wherein the equipment is preinstalled in a server rack and can be useful for applications where high-density, small-footprint compute resources are in demand.

Cloud computing provides a cost-effective way to handle the data, enabling organizations to store and process it in a centralized location without investing in expensive hardware and infrastructure. With the expansion of cloud computing services, various organizations are shifting their IT infrastructure to the cloud, as they often require facilities to leverage additional space, power, and cooling for servers, storage, and networking equipment. This is contributing to the adoption of data services. The integration of cloud technologies into interconnected devices and systems has increased their usage, resulting in a growing need for high-speed, low-latency network connectivity. The data center providers offer a secure hardware environment to store and access data, which is essential to support IoT and cloud-based applications. It also helps save overall costs over establishing their own data center.

Micro Data Center Market — by Geography, 2022

Additionally, with the growing adoption of cloud-based technologies, key micro data center market players are establishing new units for business deliveries to enhance customer’s accessibility to the cloud and digital infrastructure. For instance, in September 2021, Vantage Data Centers opened its new facility in APAC due to two acquisitions and an equity raise of US$ 1.5 billion led by stakeholder DigitalBridge Investment Management. The expansion offered cloud-based services across Tokyo and Osaka (Japan), Hong Kong (China), Kuala Lumpur (Malaysia), and Melbourne (Australia). The launch of new data centers in the country is attracting more customers to leverage the services of advanced technologies such as cloud-based services. Thus, the rising proliferation of cloud-based services is driving the micro data center market growth globally.

Increasing Deployment of 5G Services To Offer Lucrative Opportunities for Micro Data Center Market Growth During Forecast Period

The deployment of 5G is expected to significantly increase the volume of data traffic, as 5G offers high-speed data and lower latency compared to 4G and other networks. According to the Cisco company’s report published in 2022, 5G is expected to support more than 10% of the world's mobile connections by the end of 2023, with an average speed of 575 Mbps, i.e., 13 times faster than the average mobile connection. Due to increased data traffic, businesses and enterprises are seeking a location to store, process, and distribute their data more efficiently and reliably, contributing to the need for micro data centers. Moreover, the major advantage of 5G deployment is its ability to support a wide range of IoT services and applications, such as autonomous vehicles and industrial automation. These applications generate large amounts of data, which needs to be processed in real-time and stored securely. Micro data center facilities offer a cost-effective and scalable solution for storing and processing this data, providing high security, redundancy, and connectivity. Such deployment is expected to provide opportunities for the micro data center market growth during the forecast period.

North America held over one-third of the global micro data center market share in 2022. The region’s micro data center market is segmented into the US, Canada, and Mexico. North America dominates the global market with the growing adoption of innovative technologies and rising digitization. The expansion of edge computing in the region emphasizes the growing overlap between the data center and wireless worlds. Due to overlap, various companies in North America are entering into the data center business. For instance, in November 2021, the American Tower Corporation—the world's largest wireless infrastructure owner with more than 170,000 sites—acquired CoreSite.

The acquisition was aimed at improving the company’s mobile edge computing business, which is anticipated to gain from the proliferation of 5G low-latency applications throughout the cloud, enterprise, and network ecosystems. With this, CoreSite also aims to establish converged communication and computing infrastructure offering distributed points of presence across multiple edge layers.

Segmental Overview

Based on rack type, the micro data center market is bifurcated into single rack and multi rack. The single rack segment held a larger micro data center market share in 2022 and is also anticipated to register a higher CAGR in the micro data center market during the forecast period. Based on organization size, the micro data center market is bifurcated into large enterprises and SMEs. The large enterprises segment held a larger micro data center market share in 2022; however, the SMEs segment is also anticipated to register a higher CAGR in the micro data center market during the forecast period. On the basis of end user, the micro data center market is segmented into IT & telecom, BFSI, retail, healthcare, manufacturing, and others. The IT & telecom segment held the largest micro data center market share in 2022 and is also anticipated to register the highest CAGR in the micro data center market during the forecast period.

Competitive Landscape and Key Developments

Eaton Group, Hewlett Packard Enterprise Development LP, Hitachi Ltd, Rittal GmbH and Co KG, Legrand SA, Zella DC, Huawei Technologies Co Ltd, Schneider Electric, Delta Power Solutions, and Vertiv Group Corp are among the key players operating in the micro data center market. Various other companies are introducing new technologies and product offerings to contribute to the micro data center market proliferation. Several other major companies have been analyzed during this research study to get a holistic view of the micro data center market ecosystem. The leading micro data center market players focus on feature upgrades, expansion and diversification, collaboration, and acquisition strategies, which enable them to grab new business opportunities.

• In May 2023, Sonic Edge announced a partnership with Deep Green to launch 50 HPC/EdgePods at locations across the UK by the end of this year and in early 2024. According to the company, these 50 deployments will range from 50kW to 2MW, while the partnership with Deep Green will power them with low-cost, carbon-free energy sources and reduce the overall capex of HPC operations.
• In November 2022, Schneider Electric SE launched the EcoStruxure Micro Data Center R-Series 42U Medium Density for hybrid IT infrastructure management, and also aimed at expanding its ruggedized micro data center offering. The new micro data center solution is optimized for IT applications of industrial environments having distributed locations. It also ships fully integrated for speedy deployment. It also consists of a heavy weight load and is fitted with large, industrial casters for easy movement.
• In July 2022, Legrand SA acquired USystems Limited to strengthen its data center solutions offerings and bolster its micro data center market share. As per the company, the acquisition complements Legrand’s existing offering in the data center white space market and strengthen its position in the fastest-growing segments of the data center sector, namely high-performance computing and micro data center.

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