Data Center Services Market size was estimated at USD 117.2 billion in 2024 and is projected to attain USD 836.9 billion in 2037, surging at a CAGR of 17.8% during the forecast period i.e. 2025 to 2037. In 2025, the industry size of data center services is evaluated at USD 138 billion.
The market has been in keen expansion due to the combination of advancing technologies and shifting business demands. The rapid expansion of 5G networks increases edge computing demand, necessitating a decentralized nature of data centers to support low-latency processing at the network edge. For instance, in September 2024, the expansion of T-Mobile to its flagship data center in Prague began. The operator is currently setting up a photovoltaic power plant on the grounds of the new facility and plans to install a Private 5G network within the data center.
The market is growing as a result of the growing trend of moving from physical infrastructure to the cloud, the introduction of new technologies such as artificial intelligence (AI), instant service, and startup-friendly prices, as well as improved security and updates with new technologies. For instance, in September 2024, Nokia introduced the most advanced data center automation platform in the industry, designed with AI capabilities. This approach seeks to eliminate human error in network operations to minimize service outages and network disruptions. It is anticipated that cloud computing will become more and more popular. All these factors are changing the shape of the future global data center services market into a pathway to new opportunities for innovation and growth.
Growth Drivers
Challenges
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
17.8% |
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Base Year Market Size (2024) |
USD 117.2 billion |
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Forecast Year Market Size (2037) |
USD 836.9 billion |
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Regional Scope |
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Infrastructure Type (Server, Storage, Networking)
In data center services market, server segment is projected to account for revenue share of around 50% by 2037. Their dominance is primarily attributed to the support required by businesses for a large number of applications that need a mighty, scalable, and reliable server infrastructure. For instance, in October 2024, Dell Technologies launched a new line of integrated rack-scalable systems, Rack 7000 (IR7000) server, storage, and data management innovations in the Dell AI factory. Thus, servers act as the backbone, offering high-performance computing, large-scale data storage, and efficient management of workloads, which makes them indispensable in today's modern data center environments.
Organization Size (Small, Medium, Large)
The large organization segment is expected to dominate the data center services market attributable to the vast IT infrastructure that is needed to process massive amounts of data. It necessitates strong, scalable data center solutions to ensure business continuity and support for mission-critical applications. For instance, in September 2024, Princeton Digital Group sealed an agreement to build three more data centers outside Mumbai, India. Under this alliance, Mindspace REIT will develop data centers for PDG with an additional 1 million sq ft, the new constructions will be integrated into the larger 50-acre campus. The financial capabilities of companies further help in repositioning them as the key growth engine of market requirements.
Our in-depth analysis of the market includes the following segments:
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Infrastructure Type |
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Organization Size |
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Vertical |
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North America Market Statistics
By 2037, North America data center services market is likely to account for around 45.3% share. The growth is stimulated owing to the advanced technologies integrated into the state-of-the-art infrastructure. In addition, the strong existence of key players meeting the growing demand for data storage and real-time processing is assisting the market to flourish clubbed with a supportive regulatory environment.
The major characteristic of the Canada landscape for the market is the expansion of services in the country. For instance, in June 2024, Telehouse Canada announced the opening of its first three data centers in downtown Toronto. It has planned to grow the ecosystem of carriers considerably and enlarge its spaces to power the digital transformation of Canada and propagate high-speed Internet across the nation.
The U.S. utilities are inking concrete supply deals with data-center operators seeking more power amid a boom in artificial intelligence, paving the way for higher sales and profit in the coming quarters. For instance, in May 2024, a report published by Goldman Sachs that data centers will consume 8% of the power used by the US in 2030, compared to 3% in 2022. The US utilities would need to invest around USD 50 billion in new generation capacity only to meet the power demand of data centers alone.
Asia Pacific Market Analysis
Asia Pacific is the most rapidly growing region in the data center services market, driven by the shift towards digitalization across various sectors. This demands the need for data centers in the region to render reliable and efficient services. In addition, the local government that promotes digital infrastructure through its initiatives and programs helps in upscaling the data center services in the region.
The primary growth driver for the market in China is the local government initiative. For instance, in October 2024, through a new pilot program of local government that embraces the ease of the restriction of 100% foreign ownership in data centers and value-added telecom services in Beijing, Shanghai, Hainan, and Shenzhen. This marks a big shift in investment opportunities for multinational companies within the tech sector.
India is rapidly transforming from an emerging market into a developed one, and digital technology is in the vanguard of this revolution. It accelerates economic growth across all industries and functions as a foundation for better public services. For instance, in May 2024, India’s data center sector is likely to witness outstanding growth, with an addition of 791 MW of capacity by 2026. The same expansion is likely to fuel 10 million sq. ft. of real estate space, raising investment of USD 5.7 billion.
The top-notch key players in the market offer scalable, secure, and globally distributed networks. Moreover, providers cater to enterprise desires of housing their infrastructure in third-party data centers. The growing prominence of data security, edge computing, and sustainability promotes companies to embrace green technologies. For instance, in September 2024, Alibaba Cloud unveiled its Green Data Center initiative, utilizing renewable energy sources and advanced cooling technology to minimize carbon emissions. In its Tianjin data center, Tencent is using the full potential of natural cooling and renewable energy sources.
Here’s the list of some key players:
Author Credits: Abhishek Verma
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