Data Center Physical Security Market

Market Overview

The global data center physical security market size was valued at USD 1.23 billion in 2023. It is estimated to reach USD 3.70 billion by 2032, growing at a CAGR of 13.05% during the forecast period (2024–2032). The surging construction of hyperscale data centers worldwide is estimated to drive the global data center physical security market, as they require robust security solutions. Furthermore, the demand for efficient and effective infrastructure in data centers is driving the adoption of advanced security measures, including anti-climb perimeter fencing, thereby creating opportunities for the global data center physical security market growth.

Data Center Physical Security encompasses the measures and protocols designed to protect a data center's physical infrastructure from unauthorized access, damage, or disruption. This includes securing the facility's perimeter, controlling access to the building and specific areas within it, and monitoring for potential threats. Key components of physical security include fencing, surveillance cameras, security guards, biometric access controls, and reinforced doors.

Environmental controls like fire suppression systems, climate control, and uninterruptible power supplies are also critical to maintaining operational integrity. Physical security measures assure that only authorized personnel can access sensitive equipment and data, reducing the risk of theft, vandalism, or natural disasters. These precautions are essential to safeguard the sensitive information and critical operations hosted within the data center, maintaining trust and compliance with regulatory requirements.

Highlights

• Video Surveillance dominates the product segment.
• Building security dominates the physical security layers.
• Colocation dominates the end-user segment.
• North America is the highest shareholder in the global market.

Market Dynamics

Global Data Center Physical Security Market Drivers:

Increasing Construction of Hyperscale Data Centers

Hyperscale data centers are usually built on a significant area, many over 100,000 square feet. The physical security of such hyperscale data centers also needs to be extensive, with video surveillance, access controls, and the presence of data center technicians all playing a role in ensuring that the data center is safe from physical threats. The global hyperscale market witnessed investments in around 120 hyperscale projects in 2020, with a power capacity of over 15 MW.

Additionally, new entrants in the hyperscale space grew in number in 2020. Furthermore, the US witnessed investments in about 47 hyperscale data center projects in North America. The major contributor was Facebook, which is involved in developing 16 hyperscale data centers across the country, with estimated cumulative investments of around USD 6.20 billion and a total power capacity of about 950 MW. Consequently, the factors above are expected to propel the growth of the global data center physical security market.

Increasing Colocation Investments

Colocation and managed services are growing in demand owing to technological advancements across industries. Many enterprises operating in the cloud are shifting to colocation data centers to operate hybrid infrastructure services. Colocation provides significant savings for enterprises with stringent budgets in building and operating data center facilities. In 2020, the total number of colocation projects opened and under construction stood at around 370 data center facilities.

Some of the colocation providers investing in data center facilities across the world are Equinix, Digital Realty, CyrusOne, GDS Services, QTS Realty Trust, Vantage Data Centers, Switch, Colt Data Centre Services, CoreSite Realty, CtrlS Datacenters, Aligned, and Iron Mountain. Most data center colocation operators keep abreast of the latest physical technology to keep user data safe, thereby driving market growth.

Global Data Center Physical Security Market Restraint:

Cost of Physical Security Solutions

The cost of physical security depends on the data center's location and size and whether the facility is a colocation or enterprise data center.  Deploying robust security measures, such as access control systems, video surveillance, perimeter protection, and advanced biometric technologies, can be costly, especially for small and medium-sized data centers with tight budgets. Data centers have at least four layers of security, which are installed through the perimeter fence, vehicle barriers, video surveillance, intrusion detectors, sensors, multi-factor authentication systems, and mantraps.

On average, the cost of security is USD 30 - USD 50 per foot, which increases in case of any advancements in fence designs. The cost of video surveillance depends on facility size. The cost of basic CCTV varies from USD 25 to USD 60 per device, and the adoption of cloud-based video analytics will increase the cost of the system, thereby restricting the market growth.

Global Data Center Physical Security Market Opportunities:

Use of Anti-Climb Perimeter Security

Data center operators have started procuring efficient and effective infrastructure, including anti-climb fencing instead of simple chain link fences. Anti-climb perimeter security systems function tactilely and visually with additional security that detects intruders near or crashing through the fence. The demand for anti-climb perimeter fences is booming as data center investments increase YOY.

Security is important in all data centers, and regions with cases of terrorist attacks need to procure anti-climb perimeter security systems. The Middle East and Africa and some regions in Asia-Pacific, have a higher risk of terrorist attacks. For instance, the data center operators Teraco Data Environments, Reliance Jio Infocomm, N+ONE, and Africa Data Centres have equipped their data centers with various types of perimeter fencing. It is expected that in the forecast period, more and more data center operators will adopt perimeter fencing to ensure the safety of users' data, thereby creating opportunities for market growth.

Regional Analysis

North America Dominates the Global Market

Based on region, the global market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

North America is the most significant global market shareholder and is expected to expand substantially during the forecast period. Several factors have contributed to North America's historical dominance in the global data center physical security market. To begin, the region has a well-established and mature data center infrastructure, with a high concentration of major technology companies and cloud service providers that prioritize physical security measures for their data centers. Second, stringent regulatory requirements and industry standards such as HIPAA, PCI-DSS, and ISO 27001 have accelerated the adoption of robust physical security solutions in North American data centers.

In addition, the market has witnessed new developments and expansion of around 145 data center facilities in 2020, of which over 130 data center facilities are in the US, and around 13 data center projects are in Canada. Furthermore, the region has seen a significant increase in cyber threats and data breaches, prompting businesses to invest heavily in physical security measures to safeguard critical data assets. Canada is also an emerging data center market. There are also growing investments in the construction of hyperscale facilities with over a 20 MW power capacity in the region. Over 50 hyperscale data centers were active in North America in 2020, with a power capacity of over 20 MW. Consequently, all these factors are estimated to drive the growth of the North American data center's physical security market.

The Asia-Pacific region has emerged as a sub-dominant market for data center physical security, with strong growth prospects. The rapid digitalization and adoption of cloud computing services, fueled by the region's burgeoning economies and growing internet user base, has increased demand for secure data centers. Countries such as China, Japan, and India have seen an increase in data center construction, necessitating strong physical security measures to protect critical infrastructure assets.

Furthermore, the region's increased emphasis on cybersecurity and data protection regulations has accelerated the use of physical security solutions in data centers. Local colocation providers in each country also expanded their presence due to the development of additional data centers, which grew the market. To digitize their operations, government organizations in the Asia-Pacific region are actively pursuing data center growth. Asia-Pacific is also expected to witness the implementation of edge computing across various territories, especially China and India, to accommodate the region's data growth.

Segmental Analysis

The global data center physical security market is bifurcated into products, physical security layers, and end-users.

Based on the product, the global data center physical security market is bifurcated into video surveillance, access control, and other physical security.

The video surveillance segment dominates the global market during the forecast period. Video surveillance systems have zoom, tilt, and full pan features. They are installed around the data center premises at all entrances and exits. They are installed near access points and other critical areas, too. The camera footage is stored off-site and backed up digitally to guard against unauthorized tampering. Smart video surveillance with motion detection can recognize, analyze, and track people, vehicles, and objects. Most data centers install CCTVs near access points and even in data halls. The demand for video surveillance systems is surging as data center investments increase YOY.

Based on physical security layers, the global data center physical security market is segmented into perimeter security, building security, data hall security, and cabinet security.

The building security segment is the highest contributor to the market over the forecast period. Building security consists of multi-step procedures before anyone enters the building. It comes with mantraps, multi-factor authentication with biometric scanning, key cards, PIN access, and video surveillance to verify the person's identity. In addition, data center facilities are outfitted with access points to prevent tailgating, and video content analytics can track the number of individuals who pass through the entrance. These access badges and biometrics are used inside the building to facilitate access to the server room and monitoring.

Based on end-users, the global data center physical security market is segmented into colocation data centers and enterprise data centers.

The colocation data centers segment is the largest contributor to the market throughout the forecast period. Colocation service providers typically employ various layers of security measures, such as perimeter fencing, vehicle barriers, continuous surveillance cameras, and multi-factor authentication systems near entrances and data halls. These authentication systems may involve key card access, biometric scanners, ID verification, and, in certain facilities, retina scans. Furthermore, several colocation data centers include supplementary security measures such as biometric and key card access to the racks. Data center employees undergo pre-screening procedures upon entry and exit. Some colocation data centers allow clients to implement physical security measures on their racks and data halls.

Recent Developments

• April 2024-Vertiv introduced SmartAisle 3, an AI-powered micro modular data center system, enhancing operational efficiency and energy savings. Available in Southeast Asia, Australia, and New Zealand, it optimizes data center operations with AI functionality, self-learning capabilities, and streamlined setup, catering to the Global Data Center Physical Security Market's demand for advanced, efficient solutions.
• December 2023- The UK government is proposing new data center security regulations to enhance security and resilience in data infrastructure, including data centers. The regulations aim to make minimum security requirements mandatory for data center operators, ensuring appropriate steps are taken to boost physical and cyber security, aligning with the Global Data Center Physical Security Market's focus on stringent security measures.