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Northwest Data Center Market Size (2024 - 2029)

The Northwest Data Center market is experiencing significant growth, driven by factors such as strong demand, affordable land, and sustainable practices, particularly in Portland, which has become a prominent secondary market. The region benefits from tax incentives, reduced power costs, and a robust IT workforce, making it an attractive location for data center operations. Despite challenges posed by data gravity issues and the impact of COVID-19, the market's expansion is supported by a substantial data center pipeline and lower operational costs compared to other West Coast markets.

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Market Size of Northwest Data Center Industry

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Northwest Data Center Market Summary
Study Period 2018 - 2030
Base Year For Estimation 2023
Forecast Data Period 2024 - 2030
Historical Data Period 2018 - 2022
CAGR 17.50 %
Market Concentration Low

Major Players

Northwest Data Center Market Major Players

*Disclaimer: Major Players sorted in no particular order
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Northwest Data Center Market Analysis

The Northwest Data Center market is valued at 285.52MW in the current year and is expected to register a CAGR of 17.5% during the forecast period to 979.41MW by the next five years. A data center is a specific area inside a structure or a collection of designs, including computer systems and related equipment, such as networking and storage systems.

  • Portland's designation as a secondary market has gained traction due to solid demand for data centers serving the Pacific Northwest, affordable land, sustainable practices, and a variety of incentive programs. The Portland market has been one of the most sought-after in recent years, with commissioned power increasing by more than 700% between Q2 2019 and Q2 2022.
  • The market is poised for ongoing expansion thanks to strong tax incentives, solid network access, a growing IT workforce, and decreased power costs. Oregon is one of just five states without a sales tax, which also has the infrastructure needed to run a business that other tax-free jurisdictions might not have. For example, compared to other West Coast markets, the operational costs of a data center in Oregon are also much lower than the national average-a robust data center pipeline results from these qualities and the low amount of available inventory.
  • The region has serious data gravity issues, even though the concentration of data-driven global firms and high-tech startups creates several new business prospects across industries. This data explosion has significant ramifications. This is because enterprise management gets more challenging when more data is generated and processed throughout organizational locations.
  • Furthermore, with the outbreak of COVID-19, the country was significantly affected, which disrupted data center service providers in the region. Moreover, with the nationwide travel ban enforced in the country, many organizations adapted to work from home, which increased the data traffic significantly and put tremendous pressure on the data center, coping with the existing capacities to prevent downtime.

Northwest 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 Northwest 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, Wholescale, 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.

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Northwest Data Center Market Size Summary

The Northwest Data Center Market is experiencing significant growth, driven by factors such as affordable land, sustainable practices, and favorable tax incentives, particularly in Portland and Hillsboro. These areas have become attractive due to their low-cost electricity and property tax abatement programs, which appeal to businesses seeking to reduce data center operational costs. The region's infrastructure, coupled with the absence of a sales tax in Oregon, further enhances its appeal, making it a prime location for data center expansion. The market is characterized by a robust pipeline of new constructions, with Portland/Hillsboro emerging as one of the fastest-growing markets in North America. The presence of a strong IT workforce and decreased power costs are additional factors contributing to the market's expansion, despite challenges such as data gravity issues and the impact of the COVID-19 pandemic on data center capacities.

The demand for data centers in the Northwest is also fueled by the government's push towards digital transformation, particularly in the public and defense sectors. Initiatives like the Federal Cloud Computing Strategy are driving the need for data center construction to support the increasing volumes of data generated by digital services. The region's technology-driven economy, exemplified by the presence of major companies like Intel, further bolsters the market. Key players in the industry are leveraging inorganic growth strategies, such as mergers and acquisitions, to expand their market share. Recent developments include significant investments in new data center facilities powered by renewable energy, highlighting the region's commitment to sustainable growth. As the demand for data storage and processing continues to rise, the Northwest Data Center Market is poised for continued expansion, supported by strategic investments and government initiatives.

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Northwest Data Center Market Size - Table of Contents

  1. 1. MARKET SEGMENTATION

    1. 1.1 By DC Size

      1. 1.1.1 Small

      2. 1.1.2 Medium

      3. 1.1.3 Large

      4. 1.1.4 Massive

      5. 1.1.5 Mega

    2. 1.2 By Tier Type

      1. 1.2.1 Tier 1 & 2

      2. 1.2.2 Tier 3

      3. 1.2.3 Tier 4

    3. 1.3 By Absorption

      1. 1.3.1 Utilized

        1. 1.3.1.1 By Colocation Type

          1. 1.3.1.1.1 Retail

          2. 1.3.1.1.2 Wholesale

          3. 1.3.1.1.3 Hyperscale

        2. 1.3.1.2 By End-User

          1. 1.3.1.2.1 Cloud & IT

          2. 1.3.1.2.2 Telecom

          3. 1.3.1.2.3 Media & Entertainment

          4. 1.3.1.2.4 Government

          5. 1.3.1.2.5 BFSI

          6. 1.3.1.2.6 Manufacturing

          7. 1.3.1.2.7 E-Commerce

          8. 1.3.1.2.8 Other End-User

      2. 1.3.2 Non-Utilized

Northwest Data Center Market Size FAQs

The Northwest Data Center Market is projected to register a CAGR of 17.5% during the forecast period (2024-2030)

Digital Realty Trust, Inc., CoreSite, NTT Ltd, Flexential and Cogent are the major companies operating in the Northwest Data Center Market.

Northwest Data Center Market Report Snapshots

Northwest Data Center Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2030)