Data Center - Japan

Japan

Revenue in the Data Center market is projected to reach US$18.15bn in 2024.
Network Infrastructure dominates the market with a projected market volume of US$12.53bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2028) of 7.16%, resulting in a market volume of US$23.93bn by 2028.
In global comparison, most revenue will be generated in the United States (US$99.16bn in 2024).

Key regions: United States, Germany, India, Japan, China

Definition:

The Data Center market is a critical segment of the technology industry focusing on supplying and managing physical infrastructure necessary for hosting and operating IT systems, primarily servers, storage, and network equipment. This market spans from traditional in-house data centers to sophisticated facilities offered by specialized providers, covering services like hosting, shared data center facilities, and managed data center solutions. It targets a diverse client base, ranging from small businesses to large enterprises, offering flexible, scalable solutions for their IT infrastructure needs. This sector is integral to the efficient functioning and security of IT operations in various organizations.

Structure:

The Data Center market is structured in three markets based on the services model provided by the companies.

The Server market covers the resources and services related to servers, integral for hosting websites, managing databases, and supporting cloud computing.
The Storage market covers the resources and services related to data storage systems, crucial for archiving, data backup, and ensuring data recovery.
The Network Infrastructure market covers the resources and services related to network hardware essential for ensuring connectivity, data transmission, and network security.

Additional Information:

The Data Center market includes revenue, revenue change, average spend per employee, and key player market shares as key performance indicators. Market values represent revenues paid to primary vendors at the manufacturer price level either directly or through distribution channels (excluding VAT). Revenues are generated through both online and offline sales channels and include spending by consumers (B2C), enterprises (B2B) as well as governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed.

Key players in the Data Center market include companies such as Dell, HPE, Huawei, and Ericsson.

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Market

Region

Region comparison

Currency

Analyst Opinion

The Data Center market in Japan has been experiencing significant growth in recent years.

Customer preferences: Customers in Japan are increasingly demanding high-quality and reliable data center services. They are looking for data centers that can provide robust infrastructure, advanced security measures, and efficient cooling systems to ensure the uninterrupted operation of their critical business applications. Additionally, customers in Japan place a strong emphasis on energy efficiency and environmental sustainability, and they prefer data centers that can demonstrate a commitment to reducing their carbon footprint.

Trends in the market: One of the key trends in the Data Center market in Japan is the increasing demand for colocation services. Many businesses in Japan are opting to outsource their data center infrastructure to colocation providers, as it allows them to reduce costs, improve scalability, and focus on their core competencies. This trend is driven by the need for flexibility and agility in a rapidly changing business environment. Another trend in the market is the growing adoption of cloud computing. Japanese businesses are increasingly leveraging cloud services to improve operational efficiency, enhance collaboration, and enable remote work. This has led to a surge in demand for data center infrastructure to support cloud deployments. Data centers in Japan are expanding their capacity to meet this demand and are investing in advanced technologies to optimize cloud performance.

Local special circumstances: Japan is prone to natural disasters such as earthquakes and typhoons. As a result, data centers in Japan need to be designed and built to withstand these events and ensure business continuity. This has led to the development of specialized data center infrastructure and advanced disaster recovery solutions in the country. Japanese data center providers are also investing in redundant power systems and backup generators to minimize the impact of power outages.

Underlying macroeconomic factors: The strong growth of the Data Center market in Japan can be attributed to several underlying macroeconomic factors. Japan has a highly developed economy and is home to many large multinational corporations. These companies require robust data center infrastructure to support their operations and ensure the availability of their services. Additionally, the increasing digitization of the Japanese economy and the rising adoption of technologies such as artificial intelligence and the Internet of Things are driving the demand for data center services. Furthermore, government initiatives and regulations have also played a role in the growth of the Data Center market in Japan. The Japanese government has been actively promoting the adoption of digital technologies and has implemented policies to encourage investment in data center infrastructure. This has created a favorable business environment for data center providers and has contributed to the expansion of the market. In conclusion, the Data Center market in Japan is experiencing significant growth due to customer preferences for high-quality and reliable services, the increasing demand for colocation and cloud services, the need for specialized infrastructure to withstand natural disasters, and the underlying macroeconomic factors such as the strong economy and government support.

Methodology

Data coverage:

The data encompasses B2B enterprises. Figures are based on hardware-related expenses of businesses for setting up and maintaining an IT infrastructure.

Modeling approach / Market size:

Market sizes are determined through a top-down approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports and national statistical offices. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP and level of digitization. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques, such as exponential trend smoothing and the S-curve function, is based on the behavior of the relevant market.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.