Synergy Identifies the World’s Top 20 Locations for Hyperscale Data Centers

RENO, NV, August 15, 2024

New data from Synergy shows that just twenty state or metro markets account for 62% of the world’s current hyperscale data center capacity. Northern Virginia and the Greater Beijing Area alone make up 22% of the total. They are followed by Dublin, the US states of Oregon and Iowa, and then Shanghai. Of the top 20 markets, 13 are in the US, four in the APAC region and three in Europe. After the top 20, the next twenty largest state or metro markets account for another 18% of the market, with Europe and the APAC region featuring more prominently in that batch. The prevalence of US markets in the top twenty is mainly down to two factors – almost 60% of the world’s hyperscale operators are headquartered in the US, including the four biggest; and the US accounts for almost half of all cloud market revenues. Looking ahead, the US and China will continue to dominate the numbers, though countries like Malaysia, India and Spain start to feature much more prominently. The research is based on an analysis of the data center footprint of 19 of the world’s major cloud and internet service firms, including the largest operators in SaaS, IaaS, PaaS, search, social networking, e-commerce and gaming. The companies with the broadest data center footprint are the leading cloud providers – Amazon, Microsoft and Google. In addition to a huge data center footprint in their home US market, each also has multiple data centers in many other countries around the world. In aggregate the three now account for 60% of all hyperscale data center capacity. They are followed in the ranking by Meta/Facebook, Alibaba, Tencent, Apple, ByteDance and then other relatively smaller hyperscale operators. Synergy’s forecast growth numbers are based in large part on its tracking of hyperscale operators’ pipeline of future data centers. Synergy’s known pipeline of future hyperscale data centers currently stands at 510 facilities, which are at various stages of being planned, developed or fitted out.

 “A range of factors influence the choice of location for hyperscale infrastructure, including proximity to customers, availability and cost of real estate, availability and cost of power, networking infrastructure, ease of doing business, local financial incentives, political stability, and minimizing the impact of natural hazards,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “When you weigh up those factors it tends to mitigate against some of the world’s biggest economic hubs, like London and New York, while favoring some sparsely populated US states like Oregon, Iowa and Nebraska. That makes for a different mix of leading markets compared to retail colocation data centers, which hyperscale companies often use to house their edge-oriented infrastructure. While the general location decision criteria will remain the same over the coming years, the mix of top market will change driven mainly by high growth in emerging markets such as parts of Southeast Asia and Latin America.”