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United States Data Center Market Size

The United States Data Center Market is projected to experience significant growth, with the market size expanding substantially over the forecast period. Tier 3 data centers currently dominate due to their balance of cost and functionality, making them a preferred choice for small and medium enterprises. However, the demand for Tier 4 data centers is anticipated to increase, driven by the need for higher uptime and efficiency, despite their higher costs. This shift is indicative of the growing data traffic and the need for more robust facilities. Consequently, Tier 4 data centers are expected to capture the largest market share by 2029, followed closely by Tier 3 centers, while Tier 1 and Tier 2 data centers are projected to see the least growth due to their limited functionality and lower uptime.

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Market Size of united states data center Industry

United States Data Center Market Summary
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svg icon Study Period 2017 - 2029
svg icon Market Volume (2024) 14.81 Thousand MW
svg icon Market Volume (2029) 24.11 Thousand MW
svg icon Largest Share by Tier Type Tier 3
svg icon CAGR (2024 - 2029) 10.24 %
svg icon Fastest Growing by Tier Type Tier 4
svg icon Market Concentration Low

Major Players
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*Disclaimer: Major Players sorted in no particular order

Key Players

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United States Data Center Market Analysis

The United States Data Center Market size is estimated at 14.81 thousand MW in 2024, and is expected to reach 24.11 thousand MW by 2029, growing at a CAGR of 10.24%. Further, the market is expected to generate colocation revenue of USD 37,501 Million in 2024 and is projected to reach USD 95,232 Million by 2029, growing at a CAGR of 20.49% during the forecast period (2024-2029).

USD 37,501.03 Million

Market Size in 2024

USD 95,232 Million

Market Size in 2029

13.2%

CAGR (2017-2023)

20.5%

CAGR (2024-2029)

IT Load Capacity

14,810.44 MW

Value, IT Load Capacity, 2024

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The IT load capacity of the data center market will have steady growth and is expected to reach 24,108 MW by 2029. 5G would heavily contribute to data generation through increased data points, generating demand for more data centers.

Total Raised Floor Space

Sq. Ft. 44.24 M

Volume, Raised Floor Space, 2024

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The total raised floor area of the country is expected to increase to 80.7 million sq. ft by 2029. The major providers constructing the DC facilities are DataBank, Equinix Inc., and H5 Data Centers. It would increase raise floor space.

Installed Racks

2,212,050

Volume, Installed Racks, 2024

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The total number of installed racks is expected to reach over 4 million units by 2029. Northern Virginia is expected to house the maximum number of racks by 2029. The demand is being driven by larger deployments for hyperscale occupiers.

# of DC Operators & DC Facilities

79 and 833

Volume, DC Facilities, 2024

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Evolving technology businesses have led data center growth. Growth in 5G and extensive fiber connectivity supporting technologies like FWA, smartphone data consumption increased by more than 10 GB from 2018 to 2023.

Leading Market Player

12.3%

Market Share, Switch, 2023

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In 2023, Switch held a market share of 12.3% with an operational capacity of 1590 MW. Switch鈥檚 focus on sustainability and efficient technologies make their exascale ecosystems most sustainable and cost-effective colocation environment.

Tier 3 data center accounted for majority share in terms of volume in 2023

  • Tier 3 data centers are the most preferred in the country. They operated at an IT load capacity of 5,319.6 MW in 2022. Tier 3 data centers have redundant and dual-powered servers, storage, network links, and other IT components. As of 2022, the country had 399 tier 3 data centers. Around 73 data centers are under construction with Tier 3 standards.
  • SMEs generally prefer a Tier 3-rated facility. SMEs are a vital component of the US economy, as they comprise 99.9% of active enterprises. End users such as BFSI and telecom are focusing on hyperscale colocation services.
  • Tier 4 data centers are the next most preferred, mainly by large enterprises, as they provide 99.995% uptime. However, high cost is the major factor for the low adoption of these facilities. With the data traffic generation, upcoming data centers are expected to follow Tier 4 standards. In the United States, IP traffic reached an annual run rate of 955.7 exabytes in 2021, up from an annual run rate of 376.2 exabytes in 2016, suggesting the growing demand for more redundant and efficient facilities. As a result, tier 4 data centers are expected to hold the highest market share of 48.9% in 2029, followed by tier 3 facilities with a share of 45.4%.
  • Tier 1 & 2 data centers are the least preferred as tier 1 has an expected uptime of 99.671% (28.8 hours of downtime annually), while tier 2 has an expected uptime of 99.741% (22 hours of downtime annually). These data centers are commonly utilized by small businesses looking for a cost-effective option for their data storage needs. However, due to lower functionality, even SMEs are focusing on adopting wholesale colocation services with a Tier 3 certification. Therefore, tier 1 & 2 DCs are expected to showcase the lowest growth.
United States Data Center Market

United States Data Center Industry Segmentation

Atlanta, Austin, Boston, Chicago, Dallas, Houston, Los Angeles, New Jersey, New York, Northern California, Northern Virginia, Northwest, Phoenix, Salt Lake City are covered as segments by Hotspot. Large, Massive, Medium, Mega, Small are covered as segments by Data Center Size. Tier 1 and 2, Tier 3, Tier 4 are covered as segments by Tier Type. Non-Utilized, Utilized are covered as segments by Absorption.

  • Tier 3 data centers are the most preferred in the country. They operated at an IT load capacity of 5,319.6 MW in 2022. Tier 3 data centers have redundant and dual-powered servers, storage, network links, and other IT components. As of 2022, the country had 399 tier 3 data centers. Around 73 data centers are under construction with Tier 3 standards.
  • SMEs generally prefer a Tier 3-rated facility. SMEs are a vital component of the US economy, as they comprise 99.9% of active enterprises. End users such as BFSI and telecom are focusing on hyperscale colocation services.
  • Tier 4 data centers are the next most preferred, mainly by large enterprises, as they provide 99.995% uptime. However, high cost is the major factor for the low adoption of these facilities. With the data traffic generation, upcoming data centers are expected to follow Tier 4 standards. In the United States, IP traffic reached an annual run rate of 955.7 exabytes in 2021, up from an annual run rate of 376.2 exabytes in 2016, suggesting the growing demand for more redundant and efficient facilities. As a result, tier 4 data centers are expected to hold the highest market share of 48.9% in 2029, followed by tier 3 facilities with a share of 45.4%.
  • Tier 1 & 2 data centers are the least preferred as tier 1 has an expected uptime of 99.671% (28.8 hours of downtime annually), while tier 2 has an expected uptime of 99.741% (22 hours of downtime annually). These data centers are commonly utilized by small businesses looking for a cost-effective option for their data storage needs. However, due to lower functionality, even SMEs are focusing on adopting wholesale colocation services with a Tier 3 certification. Therefore, tier 1 & 2 DCs are expected to showcase the lowest growth.
Hotspot
Atlanta
Austin
Boston
Chicago
Dallas
Houston
Los Angeles
New Jersey
New York
Northern California
Northern Virginia
Northwest
Phoenix
Salt Lake City
Rest of United States
Data Center Size
Large
Massive
Medium
Mega
Small
Tier Type
Tier 1 and 2
Tier 3
Tier 4
Absorption
Non-Utilized
Utilized
By Colocation Type
Hyperscale
Retail
Wholesale
By End User
BFSI
Cloud
E-Commerce
Government
Manufacturing
Media & Entertainment
Telecom
Other End User
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United States Data Center Market Size Summary

The United States data center market is experiencing significant growth, driven by the increasing demand for data storage and processing facilities. The market is characterized by a preference for Tier 3 and Tier 4 data centers, with Tier 3 being favored by small and medium enterprises (SMEs) due to its balance of cost and functionality. These facilities offer redundant and dual-powered components, making them suitable for businesses that require reliable uptime. As data traffic continues to rise, particularly with the expansion of 5G networks and the proliferation of smart devices, there is a growing shift towards Tier 4 data centers, which provide even higher uptime but at a greater cost. This trend is expected to reshape the market landscape, with Tier 4 centers anticipated to capture a substantial market share by the end of the forecast period.

The market's expansion is further fueled by the increasing smartphone penetration and the subsequent rise in data consumption. The United States is a key player in the global smartphone market, with a significant portion of the population adopting 5G technology. This has led to a surge in data generation, necessitating the development of more advanced data centers to handle the increased load. Major players in the market, such as CoreSite, Digital Realty Trust, and Equinix, are actively expanding their operations to meet this demand. Recent developments include strategic acquisitions and expansions, such as DigitalBridge Group's acquisition of Switch, Inc. and H5 Data Centers' expansion in Atlanta. These initiatives underscore the competitive nature of the market and the ongoing efforts to enhance data center capabilities across the United States.

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United States Data Center Market Size - Table of Contents

  1. 1. MARKET SEGMENTATION (INCLUDES MARKET SIZE IN VOLUME, FORECASTS UP TO 2029 AND ANALYSIS OF GROWTH PROSPECTS)

    1. 1.1 Hotspot

      1. 1.1.1 Atlanta

      2. 1.1.2 Austin

      3. 1.1.3 Boston

      4. 1.1.4 Chicago

      5. 1.1.5 Dallas

      6. 1.1.6 Houston

      7. 1.1.7 Los Angeles

      8. 1.1.8 New Jersey

      9. 1.1.9 New York

      10. 1.1.10 Northern California

      11. 1.1.11 Northern Virginia

      12. 1.1.12 Northwest

      13. 1.1.13 Phoenix

      14. 1.1.14 Salt Lake City

      15. 1.1.15 Rest of United States

    2. 1.2 Data Center Size

      1. 1.2.1 Large

      2. 1.2.2 Massive

      3. 1.2.3 Medium

      4. 1.2.4 Mega

      5. 1.2.5 Small

    3. 1.3 Tier Type

      1. 1.3.1 Tier 1 and 2

      2. 1.3.2 Tier 3

      3. 1.3.3 Tier 4

    4. 1.4 Absorption

      1. 1.4.1 Non-Utilized

      2. 1.4.2 Utilized

        1. 1.4.2.1 By Colocation Type

          1. 1.4.2.1.1 Hyperscale

          2. 1.4.2.1.2 Retail

          3. 1.4.2.1.3 Wholesale

        2. 1.4.2.2 By End User

          1. 1.4.2.2.1 BFSI

          2. 1.4.2.2.2 Cloud

          3. 1.4.2.2.3 E-Commerce

          4. 1.4.2.2.4 Government

          5. 1.4.2.2.5 Manufacturing

          6. 1.4.2.2.6 Media & Entertainment

          7. 1.4.2.2.7 Telecom

          8. 1.4.2.2.8 Other End User

United States Data Center Market Size FAQs

The United States Data Center Market is projected to register a CAGR of 10.24% during the forecast period (2024-2029).

CoreSite (America Tower Corporation), Databank Holdings Ltd, Digital Realty Trust, Inc., Equinix, Inc. and NTT Ltd. are the major companies operating in the United States Data Center Market.

USA Data Center Market Report Snapshots

United States Data Center Market SIZE & SHARE ANALYSIS - GROWTH TRENDS & FORECASTS UP TO 2029

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