Omdia: the $5bn ‘ripple effect’ of private LTE and 5G networks

LONDON (February 17, 2021) —Top cloud and colocation service providers opened 7.8 million square feet of data center capacity in 1H20 according to Omdia’s latest Cloud and Colocation Data Center Building Tracker despite potential delay implications of the COVID-19 pandemic. Approximately 57% of the new capacity was brought online by large cloud service providers. Demand for data center services continues to rise despite COVID-19 and its economic impact.

2H20 is currently estimated at 9 million square feet of new data center capacity notwithstanding end of year adjustments for data center construction projects that may flow into 2021. New data center capacity for 2H20, 1H21 and 2H21 is estimated at 25 million square feet, assuming most projects come in on time as anticipated. Of that total square feet estimate, APAC is expected to land a greater share of new square foot capacity compared to 2019 and 2018.

Cloud and colocation service providers continue to benefit from the sustained secular demand trends already in place, but enterprises will continue to accelerate their digital transformation activities as they mitigate the risk of potential unknown future fallout from the pandemic and its economic impact.

Alan Howard, principal analyst in the Cloud and Data Center Research Practice at Omdia, commented: “Cloud and colocation service providers have been benefactors of increased SaaS and network customer demand from the pandemic response necessitating remote working and educating. These services are particularly recession-resistant and demand for services has been increasing, which translates to data center construction projects remaining in progress to assure they can meet demand.

“Many service providers have said that non-critical data center projects could be delayed, but as far as data centers go in this market, we don’t see many non-critical projects. In fact, if you look at just Amazon, Google and Microsoft, collectively they have announced 28 new regions, most with multiple zones.”

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