Data Center Physical Security Market

Market Overview

The global data center physical security market size was valued at USD 782.65 million in 2022. It is estimated to reach USD 1,465.71 million by 2031, growing at a CAGR of 7.22% during the forecast period (2023–2031). 

Data center security becomes especially important for operators with the increasing development of sophisticated technology and the collection of huge amounts of data. In terms of physical security, all data center providers prefer multiple layers of safety, and several data centers are implementing five-layer systems due to the increasing demand for colocation services, which is a vital driver for the physical security market.

Globally, data centers are designed and constructed as mission-critical facilities. They are utilized to analyze data generated by consumers and enterprise end-users. Data centers are protected against both logical and physical security risks. All contemporary data centers employ at least four security layers to prevent unauthorized access.

Data center components include storage devices and servers. The physical security of these components includes protection against external threats and intrusions that could disrupt business operations. It also includes access control systems, camera-based video surveillance, and perimeter security. The need for physical security is paramount with the growing prevalence of data centers and the adoption of innovative products. This will result in efficient monitoring and strict access to sensitive data.

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. New entrants in the hyperscale space grew in number in 2020.

Additionally, 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 boost market size.

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. 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

Based on region, the global data center physical security market is bifurcated into North America, Latin America, Western Europe, Nordics, Central and Eastern Europe, the Middle East, Africa, Asia-Pacific, and Southeast Asia.

North America Dominates the Global Market

North America is the most significant global data center physical security market shareholder and is estimated to exhibit a CAGR of 6.37% during the forecast period. The data center physical security market in North America is growing due to the rapid growth of data centers. With early availability and adoption of cutting-edge technology and investments from colocation service providers, hyperscale data center operators, businesses, and government organizations, the North American data center market is driving development in the whole data center industry. All new technological advancements in the field of data centers must first pass via this region, which serves as an incumbent. 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.

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.

Asia-Pacific is predicted to exhibit a CAGR of 8.80% over the forecast period. The Asia-Pacific region is among the fastest-expanding regions in data center development, with increased investments from global and local data center operators. China, India, Australia, Singapore, Japan, and Hong Kong are the leading markets for data center growth in this region. 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. Data center operators invest in security systems to protect the facilities from physical threats and damage. Data center operators also follow stringent policies for visitors and employees to maintain security, fueling regional market growth.

The Western European data center market witnessed investments in 85 projects. The UK, the Netherlands, Germany, Ireland, and France are leading destinations for data center development, while there are also quickly emerging markets such as Belgium, with projects from operators such as Google, Ireland with projects from Facebook, Italy with projects from Equinix & Vantage Data Centers, and Switzerland with projects from Interxion (Digital Realty). The protection of valuable assets within the data centers is a critical task. Many data centers in Western Europe are being built to support OCP rack infrastructure solutions and higher rack power density.

The Latin American region has witnessed considerable expansion in the construction of data centers over the past two years. The development of strong fiber connectivity, high demand for data center services from various industries, and reliability in power supply are major aspects that propel service providers to develop data centers in Latin America. During the forecast period, the market is expected to see investments from cloud and hyperscale data center developers such as AWS, Google, Microsoft, IBM, Huawei Technologies, and Oracle. For instance, Microsoft and Huawei Technologies developed cloud regions in Brazil and Chile in 2020. As the market has witnessed hyperscale and colocation operators, the market for physical security is expected to grow as the revenues of physical security vendors will skyrocket.

In the Middle East, the flourishing internet penetration, social media usage, and smart initiatives will continue to boost the market over the next few years. During the forecast period, the physical security in the Middle Eastern market will pick up, and the procurement of advanced security systems will be high. Etisalat's SmartHub Dubai data center has an on-site BMS platform to monitor all power, cooling, and security systems on the premises. It also has access controls with an intruder alarm system to monitor external doors and mission-critical areas. The SmartHub Fujairah facility has 24/7 on-site security, a door access control system, CCTV monitoring, and contactless card access systems.

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 and is predicted to exhibit a CAGR of 5.82% 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.

Access controls include key cards, ID verification, retina scanning, badge readers, and biometric access. Access points are crucial in data centers because they are usually installed near the entry gates and data halls. These access security systems provide high-end security and are even installed in each rack, providing information such as which rack is accessed by whom and when. Visitors get their ID verified before entering the facility and receive a visitor access card to monitor their authentications. Retina scans are used in cases where the employee or user loses their access card, with badge readers to prevent tailgating.

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 and is projected to grow at a CAGR of 6.90% 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.

The data hall has greater security to prevent complex threats since it is the most sensitive area of data centers. Data centers are leveraging multi-access systems in their data halls to monitor all access points of their data halls. Anyone seeking entry into the data hall should carry the right key card or token, providing information unique to the individual, including their biometric, iris scan, and vascular patterns. Access to the data hall is restricted to a few staff. Video surveillance systems monitor the floor continuously.

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 and is projected to exhibit a CAGR of 7.44% throughout the forecast period. Most colocation service providers have multiple layers of security that include perimeter fencing, vehicle barriers, cameras that monitor 24/7, and multi-factor authentication near the doors and data halls, which comprises key card access, biometric scanners, ID verification, and, in some facilities, a retina scan. In addition, some colocation data centers have additional biometric and key card access to the racks. Employees of data centers are pre-checked before entering and leaving. A few colocation data centers permit customers to install physical security on their racks and data halls.

Enterprise data center operators also include hyperscale data center operators such as Google, Facebook, and Apple, and some educational and government data centers come under the enterprise data center category. These are private facilities operated to support a single organization. They develop the facility according to their IT infrastructure's operational requirements. This type of construction is commonly termed as "built to suit." These providers are involved in constructing data centers with over 300,000 square feet of floor space.

Recent Developments

• March 2023- Cisco announced that it is constructing a new data center in Chennai and revamping the existing one in Mumbai to provide customers with enhanced security solutions. 
• August 2023- Vodafone Idea's enterprise division, Vi Business, partnered with Yotta Data Services to expand its data center Colocation and Cloud services portfolio. Vi Business will leverage its synergies with Yotta through this collaboration to provide enterprise customers with integrated connectivity, cloud, and security solutions.