Data Center Outsourcing Market size is estimated at USD 134.6 billion in 2024 and is anticipated to exceed USD 255.9 billion by the end of 2037, witnessing over 5.5% CAGR during the forecast period i.e., between 2025-2037. In 2025, the industry size of data center outsourcing is evaluated at USD 142 billion.
The growing adoption of big data analytics and increasing demand for advanced data centers is fuelling the overall data center outsourcing market growth. For instance, as of 2023, 39.5% of businesses used big data to manage datasets as a business asset. The U.S. is home to 2,701 data centers alone. Across the world, 82% of businesses anticipate raising their data modernization spending. Following the industry's heightened recognition of the importance of big data and data modernization, this percentage rose from 41% in 2022.
Data center outsourcing refers to the practice where a third party offers management and operation of data center facilities rather than handling these functions in-house. This includes services such as infrastructure management, colocation, network services, and security. Scalability, flexibility, and cost efficiency are some of the prime factors driving the sales of data center outsourcing services across the world. Outsourcing reduces the capital expenditure of the organization related to the installation and maintenance of hardware infrastructure. This also reduces the operation cost and need for in-house IT support by shifting to a pay-as-you-go model. Several end use organizations are widely adopting data center outsourcing services as it aids the companies to concentrate on their core business operations.
Growth Drivers
Challenges
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
5.5% |
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Base Year Market Size (2024) |
USD 134.6 billion |
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Forecast Year Market Size (2037) |
USD 255.9 billion |
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Regional Scope |
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Organization Size (Large Enterprises, Small and Medium Enterprises (SMEs))
Large enterprises segment is anticipated to capture data center outsourcing market share of around 75.5% by the end of 2037. Outsourcing data center functions allows large enterprises to focus on their core competencies and strategic goals, rather than diverting resources to manage and maintain complex IT infrastructure. Additionally, data center providers often offer state-of-the-art technologies and innovations, including cutting-edge security measures, high-performance computing, and advanced data management solutions. Large enterprises leverage these technologies to stay competitive and improve operational efficiency.
Component (Hardware, Software, Services)
The data center outsourcing market hardware segment is anticipated to hold a dominant position throughout the forecast period owing to the increasing demand for effective data storage solutions. Several end use organizations are witnessing a digital shift and the rising adoption of IoT devices leading to high data production is further fuelling the need for effective data outsourcing.
The growing demand for advanced digital infrastructure for product development and deployment is driving the need for innovative data center outsourcing hardware solutions. Data center outsourcing providers continuously upgrade their hardware infrastructure to offer advanced services and attract a wider consumer base, thus technological advancements in hardware and data center management tools are contributing to the segmental growth.
Our in-depth analysis of the data center outsourcing market includes the following segments:
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Component |
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Physical Infrastructure |
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Organization Size |
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End use |
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North America Market Forecast
North America in data center outsourcing market is projected to hold more than 39.5% revenue share by 2037 owing to the strong presence of IT organizations and high adoption of digital technologies such as IoT, AI, and ML in the manufacturing sector. The region’s strict data security policies are promoting end use companies to adopt advanced ata services, driving the overall data center outsourcing market growth.
The U.S. for data center outsourcing market was evaluated at USD 36.1 billion in 2024 and is foreseen to increase at a CAGR of 5.2% from 2025 to 2037. The continuous innovations in data center technologies are influencing the data center outsourcing market growth in the U.S. For instance, in March 2024, Avant Technologies, Inc. announced that it is set to build an advanced data center facility in Milwaukee and is expected to be operational by the first half of 2025. Avant Technologies specializes in advanced AI infrastructure solutions and mainly attracts AI and big data companies.
Canada is also an opportunistic for data center outsourcing market providers owing to the presence of strong tech companies such as Shopify, Descartes Systems Group Inc., Constellation Software Inc., and more. Cegen Environment is one of the top providers of cost-effective and green data center services in the country.
APAC Market Statistics
The Asia Pacific data center outsourcing market is estimated to be valued at USD 37.9 billion in 2025 owing to the rising infrastructure development projects and digital transformative initiatives. Asia Pacific is witnessing rapid advancements in sectors such as telecommunications, manufacturing, energy, and BFSI driving high adoption of data center outsourcing services. BFSI is one of the sectors that is highly vulnerable to data security threats, to protect their data these organizations rely on advanced outsourcing technologies.
India is witnessing a rise in remote jobs, fintech, and online education that is positively influencing the demand for scalable data center solutions, ultimately uplifting the profits of outsourcing service providers. The growing adoption of cloud computing by several businesses is also augmenting the demand for outsourced data centers in the country.
China is one of the prime manufacturing hubs across the world, and the increasing adoption of digital technologies in this sector is pushing the need for reliable outsourced data centers. Also, the rapid advancements in the e-commerce sector are driving the need for flexible and scalable outsourced data centers with strict data security compliance.
Key players in the data center outsourcing market are adopting strategies such as the introduction of advanced hardware and software outsourced data center solutions, collaboration & partnerships, and regional expansion to earn high profits. To grab this digital shift opportunity, industry giants are focusing on the development of customized outsourced data center solutions.
Some of the key players include:
Author Credits: Abhishek Verma
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