Data Center - Japan

Japan

Revenue in the Data Center market is projected to reach US$20.60bn in 2024.
Network Infrastructure dominates the market with a projected market volume of US$13.83bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 7.45%, resulting in a market volume of US$29.50bn by 2029.
In global comparison, most revenue will be generated in the United States (US$123.20bn 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 is facing subdued growth due to various factors. These include slow adoption of digital technologies, low health awareness among consumers, and limited convenience offered by online services. Despite this, the market is expected to experience significant growth in the near future, driven by the sub-markets of Servers, Storage and Network Infrastructure.

Customer preferences: As Japanese society becomes more reliant on technology, there has been a growing demand for data centers that can support the increasing amount of digital data. This trend has been further accelerated by the rise of remote work and online learning during the COVID-19 pandemic. Additionally, there is a growing demand for cloud services and virtualization solutions as companies look for more efficient and cost-effective ways to manage their data and operations. This shift towards digitalization in Japan is driven by the need for greater flexibility and scalability in the face of a rapidly changing business landscape.

Trends in the market: In Japan, the Data Center Market is experiencing a surge in demand for cloud services, driven by the increasing adoption of digital transformation strategies by businesses. This trend is expected to continue, with a projected growth of 8% in the data center market by 2025. This shift towards cloud-based infrastructure is significant as it allows for greater scalability, cost-efficiency, and flexibility for organizations. Additionally, with the rise of IoT and Big Data, there is a growing need for data storage and processing capabilities, further fueling the demand for data centers. For industry stakeholders, this presents opportunities for partnerships, investments, and innovation in technology and services to meet the evolving needs of the market. However, it also poses challenges in terms of data security, compliance, and sustainability, which will need to be addressed for sustainable growth in the industry.

Local special circumstances: In Japan, the Data Center Market is shaped by the country's highly advanced technological infrastructure and strict data privacy regulations. The demand for data centers is driven by the rapid growth of cloud computing and the increasing adoption of Internet of Things (IoT) devices. Additionally, Japan's unique geographical position makes it a strategic location for disaster recovery and data backup services. The market is also influenced by the country's cultural emphasis on efficiency and reliability, leading to high standards for data center operations.

Underlying macroeconomic factors: The Data Center Market in Japan is heavily impacted by macroeconomic factors such as technological advancements, government policies, and investments in infrastructure. The country's strong technological capabilities and government support for digital transformation initiatives have resulted in a robust data center market. Additionally, the growing demand for cloud services, big data analytics, and internet of things (IoT) technologies are driving the growth of the market in Japan. Furthermore, the country's stable economic health and favorable business environment also contribute to the growth of the data center market.

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.