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North America micro data center market to procure colossal proceeds by 2025, growing popularity of edge computing to characterize the industry landscape

Publisher : Fractovia | Published Date : 2019-05-30Request Sample

Recent breakthroughs in technology have extended the growth scope of micro data center market, given that they provide users a flexible option for data collection, processing, storage, and assessment. The advent of data centers has shifted the focus of IT industry on the optimum utilization of floor space. Moreover, the rising adoption of edge computing is adding impetus to this business space. Indubitably, edge computing is set for a major leap in the future. According to estimates, companies are currently generating almost 10% of their data outside a conventional data center or cloud, which is estimated to increase to 75% in the coming years.

U.S. micro data center market, by application, 2018 & 2025 (USD Million)

U.S. micro data center market, by application, 2018 & 2025 (USD Million)

This escalation in demand can be credited to the increasing data processing needs arising from digital devices deployed across a slew of industries such as healthcare, manufacturing, retail, energy, and finance among others. The rising need for seamless data management will propel the demand for edge computing, thereby boosting the installation of micro data centers at edge locations and enhancing market share.

International analysts believe the IoT space is expected to gain massive momentum in the future, resulting in tens of billions of new devices accessing the internet. Considering the extensive range of sectors utilizing edge computing services, the potential of data being processed at remote locations, branch office deployments, smart factories, and unmanned locations increases. Managing services impeccably at these locations poses significant challenges for data processing, management, and security. This would lead to an increasing need to perform computing and data management tasks outside data centers, generating a huge demand for micro facilities that can enhance network-connectivity and aid in convenient and safe data processing and transfer at edge locations. Security being a major concern while processing data at edge locations will further proliferate the micro data center market.

Another significant factor driving the micro data center market growth is the rising demand for cost-effective and customizable solutions from small and medium-sized enterprises. SMEs play an important role in economic development, especially in developing nations. Figures by World Bank Group suggests that there are 365 to 445 million MSMEs in developing economies, out of which 25-30 million are formal SMEs and 55-70 million are formal micro enterprises, while the rest are informal enterprises.

It is speculated that almost 70% of micro, small, and medium-sized businesses in developing markets are devoid of favorable credit facilities. Therefore, most of these companies are dependent on IT infrastructure with minimum installation, operational, and maintenance costs in order to reduce their overall capital expenditure. Having said that portable IT facilities like micro data centers are often the ideal solution for SMEs to cut costs without having to compromise on productivity. Additionally, the robust initiatives by the government, especially in developing nations like India and China, to increase the penetration of technology in the business sector will further accelerate micro data center industry share.

Besides being major breakthrough in network technology, 5G technology is likely to drive the demand for more data center capacity in the future. 5G technology is anticipated to be a huge enabler for data centers as service providers and hyperscale operators commence next-gen networking equipment to gear up for the inception of 5G services from 2020. Moreover, telecommunication companies need low latency to improve network connectivity and deployment of edge computing solutions will enable companies to offer latency-free network connectivity close to customer location.

For instance, VoltDB recently launched Smart Stream Processing to enable fast data strategies at the edge. Technologies like these are encouraging industries to take advantage of the 5G revolution by helping companies accomplish the low latency promises of 5G by driving data close to the edge in micro data centers instead of a central hub, which will further support market growth in the foreseeable years.

Regionally speaking, North America is one of the most vital geographies contributing to the expansion of micro data center industry. The U.S. as a matter of fact, houses a plethora of data centers on account of the presence of numerous businesses operating across the region. Not to mention, the pace of urbanization, industrialization, and digitalization in the U.S. and Canada will also be responsible for propelling the North America micro data center market. As per estimates, North America micro data center industry size may register a CAGR of more than 23% over 2019-2025.

Even though enterprises are striving to retain a place on the cloud, data centers will become decentralized through micro data centers which offer a plethora of advantages over conventional solutions. The increasing adoption of modular solutions across countless industries will proliferate data traffic, allowing this technology to evolve and fit new businesses. In terms of industry growth, the global micro data center market is set to exceed $14.5 billion by 2025.

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