US remains favoured datacentre location for world’s hyperscale cloud and internet giants

Despite the rise and emergence of major datacentre hubs in countries such as Ireland and the Netherlands, more than half of the world’s hyperscale facilities are located in the US.

That is according to market watcher Synergy Research Group, which has released data on the hyperscale datacentre footprint of 19 of the world’s biggest cloud and internet service providers. Its findings confirm that 53% of the globe’s hyperscale facilities are in the US.  

“Despite a years-long push to locate major datacentres into a broader geographic footprint, hyperscale infrastructure is still heavily concentrated in a few hot spots,” said John Dinsdale, a chief analyst at Synergy Research Group. “The US is still home to over half of the world’s operational hyperscale infrastructure, while the state of Virginia is home to 35% of US hyperscale capacity, most of which is centred around a small part of the state bordering on Washington DC.”

Among the cloud and internet giants with a presence in Northern Virginia are Amazon Web Services (AWS), Microsoft, Facebook, Google and TikTok’s parent company ByteDance.

“Outside of Virginia, the West has the largest amount of US hyperscale infrastructure, thanks primarily to Oregon and California, followed by the Midwest, where the main hot spots are in Iowa and Ohio,” said Dinsdale.

The number of hyperscale facilities in the world now stands at more than 800, as at the end of the second quarter of 2022, with the remaining 47% of them evenly split across Europe, China and the rest of the world.

Where Europe is concerned, Ireland leads the way in having the highest concentration of hyperscalers, followed by the Netherlands, Germany and the UK. In the Asia-Pacific region, most facilities can be found in China, with smaller hubs in Japan, Australia and Singapore.

When it comes to deciding where best to locate their hyperscale facilities, there are many factors that need to be considered and will dictate why some locations are favoured more than others, said Dinsdale.

“Hyperscale operators take a lot of factors into account when deciding where to locate their datacentre infrastructure,” he said. “This includes availability of suitable real estate, cost and availability of power supply options, proximity to customers, the risk of natural disasters, local incentives and approvals processes, the ease of doing business and internal business dynamics.

“This has inevitably led to some hyperscale hot spots. In Europe, the Netherlands and Ireland have always punched far above their weight, beating countries with larger economies, like Germany and the UK.”

But looking ahead, Dinsdale said the list of favoured locations could be very different in the years to come: “Our analysis of the future datacentre pipeline shows that the relative importance of these hot spots will tail off a little over the next five years, as hyperscale infrastructure permeates a broader geographic footprint.”