Hyperscalers are forcecast to account for more than 60 percent of datacenter space by 2029, a stark reversal on just seven years ago when the majority of capacity was made up of on-premises facilities.

This trend is the result of demand for cloud services and consumer-oriented digital services such as social networking, e-commerce and online gaming pushing growth in hyperscale bit barns, those operated by megacorps including Amazon, Microsoft and Meta.

The figures were published by Synergy Research Group, which says they are drawn from several detailed quarterly tracking research services to build an analysis of datacenter volume and trends.

As of last year's data, those hyperscale companies accounted for 41 percent of the entire global data dormitory capacity, but their share is growing fast. Just over half of the hyperscaler capacity is comprised of own-build facilities, with the rest made up of leased server farms, operated by providers such as Digital Realty or Equinix.

On-premises datacenters run by enterprises themselves now account for 37 percent of the total, a drop from when they made up 60 percent a few years ago. The remainder (22 percent) is accounted for by non-hyperscale colocation datacenters.

However, it isn't clear from Synergy's figures just how quickly the total global datacenter capacity is growing. We asked, but the research company said it is obliged to reserve some data for paying clients.

What the figures appear to show is that hyperscale volume is growing faster than colocation or on-prem capacity - by an average of 22 percent each year. Hence Synergy believes that while colocation's share of the total will slowly decrease over time, actual colo capacity will continue to rise steadily.

Likewise, the proportion of overall bit barn space represented by on-premise facilities is forecast by Synergy to decline by almost three percentage points each year, although the analyst thinks the actual total capacity represented by on-premises datacenters is set to remain relatively stable. It's a case of on-prem essentially standing still in an expanding market.

Synergy Research Chief Analyst John Dinsdale points the finger at the cloud for the stagnating fortunes of on-prem capacity over the past decade or so.

"In 2012, enterprises spent 12 times as much on their datacenter hardware and software as they did on cloud infrastructure services, while today they spend three times more on cloud services than they do on their own infrastructure," he said.

Enterprises are also choosing to house a growing proportion of their IT infrastructure in colocation facilities, Dinsdale added, further reducing the need for their own datacenter capacity.

"The rise of generative AI technology and services will only exacerbate that over the next few years, as hyperscale operators are better positioned to run AI operations than most enterprises," he said.

We asked other analysts if they were seeing hyperscalers taking a growing share of the datacenter pie.

IDC's Senior Research Manager EMEA Luis Fernandes pointed to hyperscalers being some of the biggest investors in new infrastructure, particular with generative AI driving uptake of GPU-based infrastructure.

Fernandes also said there is "no massive datacenter exit that we can see in our data," consistent with on-prem datacenters being in a holding pattern.

"Even among AI and GenAI workloads, the preference for a hybrid cloud is still notoriously high," he added, saying that in his opinion, the initial strength of public cloud providers with GenAI may lessen over time. ®

https://www.theregister.com//2024/08/08/cloud_growth_hyperscalers_growth/