US has emerged as ‘most prominent’ cloud market in the world

The U.S. is the most mature data center development and operations market. The growing popularity of IoT, the emergence of 5G networks, and the demand for streaming online entertainment content at high speeds are the significant factors driving the growth of the data center construction market in the US, according to Research and Markets.

U.S. Data construction market opportunities

• The US has emerged as the most prominent cloud market in the world with the presence of major global cloud operators. The wide adoption of cloud services has increased the country’s need for data center construction.
• There is increased growth of hyperscale facilities in the US, such as Facebook, Microsoft, Amazon Web Services, Apple, and Google. In 2021, about 27 hyperscale data centers began operations or were under construction in the US.
• The modern data center is based upon Tier standards to evaluate facilities based on the efficiency, performance, and redundancy of the infrastructure the Uptime Institute gives. Other standards for construction include LEED Certification, TIA 942, and ANSI/BICSI 002-2019 certifications.
• The Western US expects to dominate the market in terms of overall investment during the forecast period, garnering over $6.6 billion.
• However, the South-Eastern and Mid-Western US will compete with the Western US regarding investments and the number of projects during the forecast period.

Key trends
Impact of Cloud Connectivity

• Many hyperscale facilities are being built, enabling cloud service providers to expand their cloud region across the US.
• Government agencies have migrated their applications to a private cloud environment where cloud service providers operate.
• Major regional cloud service providers plan to collaborate to provide cloud-based services. Collaborations with the new entrants to colocate their workloads with the existing colocation operators.
• The growing use of cloud computing applications and services in the US will aid in developing cloud-based hyperscale data centers.

Big Data & IoT Driving the Market Growth

• There is a high internet penetration rate in the US, i.e., around 85%, which increases the amount of data generated. Also, the country contributes over 50% of the world’s spending on big data and analytics solutions.
• In August 2021, AT&T and Cisco partnered to launch 5G services to boost performance for Internet of Things (IoT) applications across the US.
• Metaverse is gaining popularity allowing the users to connect via VR (Virtual Reality) and AR (Augmented Reality), generating vast amounts of data using connected devices such as mobile phones & computers.
• The adoption of IoT will drive the demand for edge data center construction requiring low latency with high computing capabilities.

Tax Incentives Boosting Construction Market

• One of the essential enablers for the data center construction market is tax incentives and breaks offered in states and countries across the US, which helps yield high savings while incorporating other specified benefits.
• Rhode Island has passed an act for exception from property and sales tax for 50 years for data centers fulfilling the criteria.
• Tax relief of around $150 million was offered to Facebook by Utah’s local community for 20 years.

CT Bureau