Market Size of Houston Data Center Industry
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2019 - 2022 |
| CAGR (2024 - 2029) | 4.70 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Houston Data Center Market Analysis
The Houston Data Center Market size is estimated at 92.72 megawatt in 2024, and is expected to reach 116.66 megawatt by 2029, growing at a CAGR of 4.70% during the forecast period (2024-2029).
- A data center is a specific area inside a structure or a collection of designs that house computer systems and related equipment, such as networking and storage systems.
- Hyperscalers and edge data centers are the parts of the industry that are expanding quickly. While edge enables diversification and reduces latency, hyperscalers meet the rising demand. Artificial intelligence (AI) development will boost demand by requiring more data and increasing computing efficiency.
- The development of cloud computing has benefited the DFW market as well. Cloud service providers like IBM Softlayer and Rackspace have partnered with larger colocation companies to house their infrastructure. For instance, cloud providers account for a sizable amount of the 86 MW at Digital Realty's 68-acre Richardson campus, which has a total area of 68 acres. Hyperscale cloud providers are also aggressively building their data centers and renting regional space. This trend is projected to continue as data center users continue to adopt cloud computing, and cloud providers depend on larger colocation providers for infrastructure support.
- As businesses in Houston experience significant data generation across industries like IT and telecom, BFSI, healthcare, and government and defense, big data and IoT technology will increase investments in the data center industry. In the southern part of Houston County, the market saw a land rush for all asset categories, including data centers. Rising capital costs will throw off this trend, which may impede speculative growth in the area.
Houston Data Center Industry Segmentation
A data center is a physical room, building, or facility that holds IT infrastructure used to construct, run, and provide applications and services and store and manage the data connected with those applications and services.
The Houston data center market is segmented by DC size (small, medium, large, massive, mega), by tier type (tier 1&2, tier 3, tier 4), by absorption (utilized [colocation type [retail, wholesale, hyperscale], end user [cloud & IT, telecom, media & entertainment, government, BFSI, manufacturing, e-commerce]], Non-Utilized). The market sizes and forecasts are provided in terms of value (MW) for all the above segments.
Houston Data Center Market Size Summary
The Houston Data Center Market is experiencing significant growth, driven by the increasing demand for digital infrastructure due to the rise of cloud computing, artificial intelligence, and big data. The market is characterized by the expansion of hyperscalers and edge data centers, which are crucial in meeting the growing need for data processing and storage. The development of cloud services has further bolstered the market, with major providers like IBM Softlayer and Rackspace partnering with colocation companies to enhance their infrastructure. This trend is expected to continue as businesses across various sectors, including IT, telecom, BFSI, healthcare, and government, generate substantial data, prompting investments in data center capabilities. The market's appeal is further enhanced by low power tariffs and the shift of data center providers to secondary and tertiary regions, offering more land and power availability.
Despite a recent slowdown in leasing activity, the Houston data center market remains attractive for operators, with a high percentage of new construction preleased and a positive outlook for industries such as healthcare and energy. The market is semi-consolidated, with key players like Digital Realty Trust, Inc., DataBank, Equinix, Inc., Netrality Data Centers, and Cogent employing mergers, acquisitions, and strategic partnerships to expand their market share. Recent expansions and acquisitions, such as DataBank's acquisition of CyrusOne's facilities and Netrality's capacity expansion, highlight the ongoing investment and development in the region. As the demand for secure and reliable data storage solutions grows, the Houston market is poised for continued expansion, offering significant opportunities for companies and investors in the data center industry.
Houston Data Center Market Size - Table of Contents
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1. MARKET SEGMENTATION
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1.1 By DC Size
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1.1.1 Small
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1.1.2 Medium
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1.1.3 Large
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1.1.4 Massive
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1.1.5 Mega
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1.2 By Tier Type
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1.2.1 Tier 1 & 2
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1.2.2 Tier 3
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1.2.3 Tier 4
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1.3 By Absorption
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1.3.1 Utilized
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1.3.1.1 By Colocation Type
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1.3.1.1.1 Retail
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1.3.1.1.2 Wholesale
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1.3.1.1.3 Hyperscale
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1.3.1.2 By End User
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1.3.1.2.1 Cloud & IT
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1.3.1.2.2 Telecom
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1.3.1.2.3 Media & Entertainment
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1.3.1.2.4 Government
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1.3.1.2.5 BFSI
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1.3.1.2.6 Manufacturing
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1.3.1.2.7 E-Commerce
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1.3.1.2.8 Other End User
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1.3.2 Non-Utilized
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Houston Data Center Market Size FAQs
How big is the Houston Data Center Market?
The Houston Data Center Market size is expected to reach 92.72 megawatt in 2024 and grow at a CAGR of 4.70% to reach 116.66 megawatt by 2029.
What is the current Houston Data Center Market size?
In 2024, the Houston Data Center Market size is expected to reach 92.72 megawatt.
