Data Center Market

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Data Center Market by Type (Colocation, Hyperscale, Edge, and Others), by Deployment Model (On-premise, Cloud, and Hybrid), by Enterprise Size (Large Enterprise and Small and Medium Size Enterprise), and by End User (BFSI, IT and Telecom, Government, Energy and Utilities, and Other End Users)– Global Opportunity Analysis and Industry Forecast, 2024–2030

Industry: ICT & Media | Publish Date: 05-Sep-2024 | No of Pages: 269 | No. of Tables: 221 | No. of Figures: 172 | Format: PDF | Report Code : IC570

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Market Overview

The Data Center Market size was valued at USD 214.0 billion in 2023, and is predicted to reach USD 406.6 billion by 2030, with a CAGR of 9.60% from 2024 to 2030. 

The data center industry encompasses the planning, construction, operation, and maintenance of infrastructure dedicated to hosting computing resources. This infrastructure includes servers, storage systems, and networking equipment, along with services such as cloud computing and connectivity solutions. Key trends in the industry include the widespread adoption of cloud services, the rise of edge computing to minimize latency, and a growing focus on sustainability.

Additionally, cybersecurity concerns are increasing, leading to heightened security measures. The integration of hybrid and multi-cloud strategies is also prominent, along with the impact of 5G networks. These trends reflect the industry's response to the escalating demand for scalable, efficient, and secure data processing and storage solutions amid the ongoing digital transformation. According to the United States International Trade Commission, the data processing and storage market is projected to increase in value from USD 56 billion in 2020 to USD 90 billion by 2025.

The Widespread Digitalization of Businesses Across the World Drives the Industry 

The data center industry is experiencing significant growth driven by the global shift towards digitalization. With businesses and individuals increasingly relying on digital technologies, cloud services, and data-intensive applications, there's a heightened demand for robust and scalable data infrastructure. 

According to the International Data Corporation (IDC), spending on digital transformation (DX) is projected to reach nearly USD 3.9 trillion by 2027, with a five-year compound annual growth rate (CAGR) of 16.1% worldwide. 

This surge in demand is further fueled by trends such as the Internet of Things (IoT), Artificial Intelligence (AI), machine learning, and the rise of remote work. Data centers play a crucial role in supporting these digital advancements by providing the necessary infrastructure for storing, processing, and efficiently managing vast amounts of data.

As the landscape of digital services continues to evolve, along with the need for secure and high-performance computing, the data center industry remains at the forefront of driving global digital transformation initiatives. 

 

Global Adoption of Cloud Services by Companies Drives the Market

The widespread adoption of cloud services across diverse sectors such as technology, e-commerce, finance, healthcare, and government agencies is significantly propelling the expansion of the data center industry. As businesses increasingly migrate their operations and infrastructure to the cloud, there's a growing demand for data centers to facilitate the storage, processing, and management of large volumes of data.

According to Gartner's latest forecast, global end-user spending on public cloud services is projected to soar to USD 679 billion in 2024, showcasing a robust growth rate of 20.4% from the previous year's USD 563.6 billion. This surge in cloud adoption underscores the need for data center construction and expansion to accommodate the evolving requirements of businesses embracing cloud computing. Consequently, data center providers are investing in advanced technologies and infrastructure to meet the rising demand for cloud-based solutions, reshaping the data center landscape across various industries.

High Initial Investment is the Major Factor Hindering Market Growth

The data center sector confronts significant hurdles, including substantial initial investments and strict environmental regulations. Setting up and managing data centers demands considerable upfront financial resources, posing obstacles for smaller enterprises and startups.

Moreover, compliance with environmental standards presents challenges, prompting continuous investments in energy-efficient technologies. For instance, Singapore implemented a moratorium to manage the proliferation of new data centers, aiming to strike a balance between environmental preservation and supporting business demands. Similarly, other nations such as the Netherlands and Ireland have temporarily halted new constructions to alleviate pressure on power grids. 

Introduction of edge computing in data center is expected to create future opportunities

Edge computing presents promising opportunities for the data center industry by minimizing latency and facilitating real-time processing. By positioning computing resources closer to end-users, edge computing supports applications such as the Internet of Things (IoT) and Augmented Reality (AR), thereby alleviating strain on centralized cloud data centers. 

This decentralized approach offers scalability, flexibility, and specialized solutions tailored to specific industries, paving the way for edge cloud services. Moreover, edge computing enhances security by locally processing sensitive data, addressing concerns related to data sovereignty, and adapting to the evolving digital landscape, thereby opening up diverse avenues for data center providers. 

For instance, Armada, a startup specializing in edge computing, recently secured over USD 55 million in funding to provide mobile data centers and software for managing Starlink deployments. Through leveraging advancements in IoT and Artificial Intelligence (AI), Armada offers a comprehensive infrastructure solution encompassing software suite Commander for data management and data center solution Galleons, aimed at bridging the digital divide and tackling significant connectivity challenges.

North America Dominates the Data center Market 

In North America, particularly in the United States, the data center landscape is robust and expansive, with over 5,300 strategically positioned facilities across the nation. Northern California serves as a notable hub for data-intensive enterprises, housing major companies such as Google, Facebook, Uber, Twitter, and Yelp. The distribution of data centers across various jurisdictions reflects the widespread integration of data in the US economy and the influence of cost-effective energy sources in specific regions. 

Remarkably, the top 10 data center locations in the US collectively account for less than 40% of all data centers, underscoring the extensive geographic dispersion, with nearly every state hosting at least one data center. Dominated by major players such as Lumen Technology, Verizon, Digital Realty, AT&T, and Equinix, the data center industry in the US is largely consolidated, with these top five operators comprising 25.9% of total US data centers. Moreover, reports indicate substantial contributions to the US GDP by data centers, with a PwC study commissioned by the Data Center Coalition revealing a USD 2.1 trillion boost between 2017 and 2021.

Additionally, data intelligence firm CloudScene highlights the US's significant lead in data center numbers, hosting 5,389 facilities, a figure five times greater than the UK's 512 data centers. Furthermore, substantial investments by tech giants such as Amazon Web Services (AWS), exemplified by a USD 35 billion allocation for new data centers in Virginia, underscore the industry's growth trajectory and its vital role in supporting cloud expansion initiatives, even amidst broader corporate restructuring efforts. 

 

Asia-Pacific is expected to show steady growth in the data center market

The Asia-Pacific data center industry is experiencing significant growth and development, with notable developments in key countries. China leads the region with 440 data centers, driven by its booming digital economy and innovative projects such as the world's first submerged commercial data center. Japan is experiencing significant growth, supported by government subsidies and global collaborations. India, aiming for a USD 1 trillion ICT sector by 2025, attracts significant companies such as OVHcloud and Digital Realty. South Korea plans a 1GW data center campus, emphasizing sustainability.

Australia sees Microsoft's USD 3.4 billion investment as a significant expansion. Indonesia collaborates on a nationwide data center platform, while Singapore focuses on water conservation and energy efficiency. Taiwan's growing data traffic spurs investment, with Vantage Data Centers expanding. Thailand's digitalization fuels Amazon, Google, and Microsoft's USD 8.46 billion investment. New Zealand and Malaysia witness significant data center developments, with Spark New Zealand investing in data centers and Malaysia positioning itself as a regional hub with incentives and NTT's USD 50 million CBJ6 data center.

 

Competitive Landscape

Several market players operating in the data center market include Amazon.com Inc., IBM Corporation, Microsoft Corporation, Cisco System Inc., Oracle Corporation, SAP SE, Hewlett Packard Enterprise Company, NTT Communications Corporation, Equinix Inc., Digital Reality Trust Inc. and others. These market players are adopting business expansion across various regions to maintain dominance in the data center market.

For instance, in January 2024, Digital Realty launched its first Indian data center in Chennai, known as MAA10. This facility is designed to meet the growing demand for data center services in India, particularly from cloud and network service providers, reflecting the company's expansion into key global markets such as India.

Also, in June 2023, Equinix announced plan to open its first data centre in Kuala Lumpur in the first quarter of 2024, aiming to meet the increasing demand for data centre services in the Southeast Asian region and support the digital transformation efforts of businesses.

Moreover, in April 2023, Microsoft launched its first datacenter region in Poland, marking a significant expansion of its cloud infrastructure. This move not only brings new opportunities for the development of the digital economy in Poland but also strengthens Microsoft's presence in the European data center market.

Key Market Segments 

By Type    

  • Colocation

  • Hyperscale

  • Edge 

  • Others

By Deployment Model

  • On-Premises

  • Cloud

  • Hybrid

By Enterprise Size 

  • Large Enterprise

  • Small and Medium Size Enterprise

By End User

  • BFSI

  • IT and Telecom

  • Government

  • Energy and Utilities 

  • Other End Users

By Region        

  • North America    

    • The U.S.

    • Canada

    • Mexico

  • Europe    

    • The UK

    • Germany

    • France

    • Italy

    • Spain

    • Denmark

    • Netherlands

    • Finland

    • Sweden

    • Norway

    • Russia

    • Rest of Europe

  • Asia-Pacific    

    • China

    • Japan

    • India

    • South Korea

    • Australia

    • Indonesia

    • Singapore

    • Taiwan

    • Thailand

    • Rest of Asia-Pacific

  • Rest of the World (RoW)    

    • Latin America

    • Middle East

    • Africa

REPORT SCOPE AND SEGMENTATION:

Parameters

Details

Market Size in 2023

USD 214.0 Billion

Revenue Forecast in 2030

USD 406.6 Billion

Growth Rate

CAGR of 9.60% from 2024 to 2030

Analysis Period

2023–2030

Base Year Considered

2023

Forecast Period

2024–2030

Market Size Estimation

Million (USD)

Growth Factors

  • The Widespread Digitalization of Businesses Across the World

  • Global Adoption of Cloud Services by Companies

Countries Covered

28

Companies Profiled

10

Market Share

Available for 10 companies

Customization Scope

Free customization (equivalent up to 80 working hours of analysts) after purchase. Addition or alteration to country, regional, and segment scope.

Pricing and Purchase Options

Avail customized purchase options to meet your exact research needs.

KEY PLAYERS

  • Amazon.com Inc. 

  • IBM Corporation, 

  • Microsoft Corporation, 

  • Cisco System Inc., 

  • Oracle Corporation, 

  • SAP SE, 

  • Hewlett Packard Enterprise Company, 

  • NTT Communications Corporation, 

  • Equinix Inc., 

  • Digital Reality Trust Inc.

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Frequently Asked Questions

The top companies in the data center industry include Amazon.com Inc., IBM Corporation, Microsoft Corporation, Cisco System Inc., Oracle Corporation, SAP SE, Hewlett Packard Enterprise Company, NTT Communications Corporation, Equinix Inc., Digital Reality Trust Inc. and others.

According to the report published by Next Move Strategy Consulting, the global data center market is expected to hit USD 406.6 billion by 2030.

Introduction of edge computing in data center is expected to create future opportunities in the market.

North America dominates the data center market.

According to the report published by Next Move Strategy Consulting, the global data center market is valued at USD 214.0 billion in 2023.

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