Global Data Center Market
Data Center Market size is estimated at USD 282.32 billion in 2024 and is anticipated to reach USD 938.9 billion by the end of 2037, expanding at a CAGR of 9.8% during the forecast period, i.e., 2025-2037. In 2025, the industry size of data center is assessed at USD 304.9 billion.
Growth of the data center market can be attributed to rising demand for cloud computing, big data analytics, and growing traction for AI technologies. Due to an increase in remote work, online learning, and virtual entertainment, companies are digitizing their operations, and the need for a robust data storage and processing environment is high. For example, in September 2023, Vantage Data Centers announced a USD 9.2 billion equity investment led by DigitalBridge Group and Silver Lake. This investment will help Vantage build more capacity to meet the increasing demand it faces because of the surge in cloud and AI services across the globe.
Government policies toward enhancing digital infrastructure also contribute to the growth of the data center market. For example, the Government of India incentivizes the creation of data centers within the country through many policies and steps to maximize connectivity, as it ensures reliable power access. According to the Digital Personal Data Protection Act 2023, the establishment of local data centers creates a high demand in the market. The government’s commitment to enabling an environment for data centers to thrive is further accelerated through acts like creating Data Center Economic Zones and facilitating investments in this vital infrastructure.
Growth Drivers
Challenges
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
9.8% |
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Base Year Market Size (2024) |
USD 282.3 billion |
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Forecast Year Market Size (2037) |
USD 938.9 billion |
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Regional Scope |
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Component (Hardware, Software, Services)
The hardware segment in the data center market is predicted to capture 58.8% of the revenue share during the forecast period. The growth of this segment is largely based on better performance, efficiency-boosting server technologies, and storage solutions in a variety of applications. Additionally, the deployment of high-performance computing systems in support of AI applications will increase, thus fueling demand for the segment. For example, in May 2023, Dell Technologies introduced its new series of servers for deep learning workloads in AI applications to further solidify its position as a leader in hardware innovation.
End user (BFSI, Telecommunication, Healthcare, Retail & E-commerce, Entertainment & Media, Energy, Others)
The Banking, Financial Services, and Insurance (BFSI) segment is anticipated to dominate the data center market with a 33.3% share. In this industry, secure infrastructure with scalability is required to process vast data regarding finances. By promoting online banking, mobile payments, and other related digitalization of financial services, BFSI requires data centers to be able to handle such continuous operations. For example, in April 2024, Microsoft declared an investment of USD 2.9 billion to expand the facility of its data center in Japan to meet the growing requirements from the BFSI sectors for secure cloud solutions.
Our in-depth analysis of the data center market includes the following segments:
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Component |
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Type |
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Infrastructure |
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Design |
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End user |
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North America Market Analysis
North America data center market is expected to dominate with a share of around 37.2% by 2037, driven by its well-established digital economy based on high demand for cloud services and advanced technological infrastructure. Additionally, AI technologies being increasingly adopted across various industries drive the investment pace in facilities capable of sustaining such innovations. The U.S. and Canada are witnessing a rapid surge in the demand for data centers, which is creating significant opportunities for new entrants in the market.
The U.S. continues to be a prominent market in North America, with massive investment and development by leading players such as AWS, Microsoft, and Google. For example, Microsoft's investment of USD 100 billion in the 'Stargate AI supercomputer project is in the pipeline and expected to be launched by 2028.
The data center market in Canada is expected to record significant growth due to favorable government policies toward technology investment and sustainability initiatives. Canada has emerged as a lucrative destination for global tech companies that need reliable infrastructure with regulatory support to host their operations. In January 2024, the federal government announced a new program to drive innovation in technology sectors with funding opportunities, particularly in enhancing digital infrastructures such as data centers.
APEJ Market Statistics
Asia Pacific excluding Japan is poised to witness an expansion at a CAGR of 11.1% through 2037, driven by the increased internet penetration rates and digital transformation efforts across sectors such as healthcare and retail. Moreover, governments in several countries within the region have been extending their support by promoting investments in the technology infrastructure. This, in turn, becomes vital to allow new technologies such as AI and IoT to gain widespread adoption, further driving the data center market growth in APEJ during the forecast period.
With its robust digital economy and strong data localization rules, China is anticipated to turn into a dominant country in APEJ data center market. Players in the country continue to invest heavily in cloud infrastructure to support the rapidly growing verticals like e-commerce and fintech. Furthermore, major technology companies like Alibaba, Tencent, and Fujitsu are developing their data center capacities to meet the rising demand. In May 2023, ServiceNow, a U.S.-based software company, and Fujitsu signed an agreement to establish the Fujitsu-ServiceNow Innovation Center, which will focus on digital transformation and customer success.
The data center market in India is witnessing steady expansion due to rising mobile internet usage and cloud adoption. Favorable policies by the government are also attracting both domestic and international investments, hence creating a business climate. These articulated policies attract several global players to establish a strong foothold in India. With more industries investing to boost digital infrastructure, demand for data centers is anticipated to rise steadily in India. This momentum places India in an important position in the global data center market.
The competitive outlook in the data center market is dominated by some leading players vying for market share through strategic partnerships and technological innovation. Some of these companies are IBM, Cisco, Amazon Web Services, Microsoft, and Google Cloud, which have been at the forefront in continuously updating their service offerings while expanding their geographical footprint. Furthermore, these players take advantage of the increasing demands for scalable, energy-efficient, and highly secure data center solutions driven by AI. Moreover, partnerships with regional players further support investments in infrastructure development to meet the increasing demand of emergent markets and make necessary adjustments to adapt to emerging industry standards.
In January 2023, CyrusOne acquired an office campus in Frankfurt, Germany, which it intends to refurbish into a large data center campus. Investment group Corum confirmed that it had sold the Europark office complex for USD 103.92 million to CyrusOne. The deal cements CyrusOne's position in Europe and reinforces its strategy of expansion in key markets where demand for hyperscale data center capacity is already well underway. This development underlines the growing prominence of data centers as companies vie to meet the rising demand for the region's blossoming digital infrastructure. Here are some leading companies in the data center market:
Author Credits: Abhishek Verma
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