Average size of hyperscale datacentres is on the rise

The average size of a hyperscale datacentre is on the rise, with data from Synergy Research Group suggesting that the capacity of these supersize server farms has doubled in less than four years.

In addition to the market watcher’s regular reports on how many hyperscale datacentres there are in operation globally, Synergy has now begun tracking the compute capacity contained within these facilities.

Its data shows that 700 hyperscale datacentres were up and running across the world by the end of the third quarter of 2021, with just under half (49%) of these sited in the US.

But while the number of hyperscale datacentres in operation has continued to grow rapidly, the total capacity of these facilities has been growing even more quickly, contributing to an increase in the average size of a server farm, said Synergy.

“It has taken five years for the number of hyperscale datacentres to double, but less than four years for capacity to double,” it said in a statement.

The amount of global datacentre capacity located in the US is in decline, with Chinese cloud and internet companies such as ByteDance, Alibaba and Tencent now leading the hyperscale market in terms of the pace of build-outs, the data also showed.

As a result of this trend, China is now home to 15% of the world’s hyperscale datacentre capacity, with the rest spread across Asia-Pacific (13%), Europe, the Middle East and Africa (19%) and Canada/Latin America (4%).

The data is based on Synergy’s analysis of the datacentre footprint of 19 of the world’s biggest cloud and internet service providers, including Amazon, Microsoft, Google, Facebook and IBM.

In terms of which providers are hoarding the most capacity overall, Amazon leads, followed by Microsoft, Google and Facebook, said Synergy.

John Dinsdale, chief analyst at Synergy Research Group, said that based on the firm’s forecast data, the growth in the number and capacity of hyperscale datacentres shows no signs of slowing down. “While the number of hyperscale datacentres continues to grow at an impressive pace, not all datacentres are born equal,” he said.

“Generally speaking, self-owned datacentres are much bigger than leased datacentres, and datacentres in the home country of a hyperscale company are much bigger than its international facilities, although there are plenty of exceptions to these trends.

“The constants in all this are that both the number and average size of hyperscale datacentres continue to grow steadily. We also see a very healthy pipeline of hyperscale datacentres being planned, developed or fitted out, supporting our strong five-year growth forecasts.”

These trends are also feeding into another piece of research published by Synergy this week about how the growing demand for datacentre capacity is pushing up the number and size of merger and acquisition (M&A) deals in the sector.

Following the news that colocation giants CyrusOne and CoreSite are being sold for $15bn and $10bn, respectively, Synergy’s data shows the number of M&A deals so far this year has already passed the number recorded in 2020, although the value of those deals has not.

However, should the CoreSite deal close before the year-end, as expected, datacentre M&A values are on course to be 16% higher than last year, said Synergy.

“Hyperscale operators continue to aggressively expand their operations, while both enterprise- and consumer-oriented cloud markets keep on growing rapidly,” said Dinsdale. “This is driving an ever-increasing need for datacentre capacity.”

This, in turn, is affecting investor profiles within the datacentre sector, as more private equity firms move in to fund these deals, he added.

“The level of datacentre investment required is too much for even the biggest datacentre operators, causing an influx of new money from external investors,” said Dinsdale. “In quick succession, ownership of four of the top six US datacentre operators has changed hands, while the two biggest names in the industry – Equinix and Digital Realty – are increasingly turning to joint ventures to help fund their growth.

“Over the last 18 months, there has been a very notable shift in buyers away from datacentre operators and toward private equity investors.”