The landscape of global data centers is witnessing a substantial transformation, with hyperscale operators increasingly dominating the market. Recent findings from a reputable research group reveal that these hyperscale companies now control approximately 44% of total global data center capacity, a significant rise from around one-third six years ago.
As of early 2025, there are 1,189 large-scale data centers operated by these hyperscale firms, which include major players in sectors such as search, e-commerce, social media, and platform services. A noticeable trend is that over half of the capacity utilized by these companies originates from data centers they own and construct, rather than those leased from colocation service providers.
The rest of the global data center market comprises 34% on-premise enterprise data centers and 22% non-hyperscale colocation capacity. This marks a decline from six years ago when on-premise infrastructure represented 56% of total capacity. Projections indicate that by 2030, on-premise infrastructure will diminish to 22%, while hyperscale operators are expected to rise to command 61% of total data center capacity, indicating a significant paradigm shift in the hosting and delivery of digital services.
The growth of hyperscale data centers can be attributed to several converging factors. Predicted to triple their capacity in the coming six years, the demand is largely driven by AI applications, a surge in cloud adoption, and increasing needs for compute-heavy tasks like generative AI. Although on-premise data centers have seen minimal expansion recently, interests in high-performance computing and AI infrastructure are sparking a small increase in deployments, yet they will continue to lose market share annually.
Colocation providers are also expected to enjoy steady growth, albeit at a slower pace. While their market share is forecasted to decrease, the absolute capacity in this sector is set to grow at nearly double-digit rates each year. This trend emphasizes the ongoing dependency of enterprises on hybrid IT models and the integral role of colocation in meeting the needs for edge computing, latency-sensitive services, and compliance with regulations.
The data utilized for these insights is derived from thorough analysis and tracking of over 320 colocation firms, alongside detailed exploration of hyperscale and on-premise infrastructures across various regions and service providers.
John Dinsdale, an analyst from the research firm, acknowledges the significant impact of artificial intelligence on data center expansions. He points out that the burgeoning demand for AI capabilities is propelling the need for greater data center capacity, which has primarily been driven by cloud offerings and other essential digital services.
Geographical disparities in hyperscale capacity concentration persist, with North America, especially the United States, leading the charge while regions such as EMEA and APAC still heavily rely on leased facilities and on-premise resources. Nevertheless, the overarching trend indicates a consistent double-digit growth in global data center capacity alongside an accelerated move towards hyperscale frameworks. The expectation is that hyperscale capacity will grow by over 20% annually across all major global regions up until 2030.
This evolution of digital infrastructure signals a future where hyperscale operators are likely to steer innovations in IT services and scalability. For enterprises and tech providers, adapting to an increasingly cloud-centric landscape driven by AI demands and the diminishing relevance of traditional on-premise systems will be crucial.
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