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The Data Center market is projected to be valued at USD 731.77 billion in 2027 with a CAGR of 12.73%, between 2022 and 2027. The growth of the market depends on several factors, including the rise in the adoption of multi-cloud and network upgrades to support 5G, the demand planning and expansion by hyper scalers, and the growing demand among SMEs.Data centers are centralized facilities for computing, processing, and storage.
|Market Size (2017) Historic Year
|USD 247.97 billion
|Market Size (2027) - Forecasted Year
|USD 731.77 billion
|Historic Opportunity (2017- 2021)
|USD 114.91 billion
|Forecasted Opportunity (2023-2027)
|USD 329.82 billion
|Market Opportunity Transformation Growth
|Market Opportunity Capitalization
|USD 444.73 billion
They include high-performance servers, networking equipment, storage arrays, and supporting services such as powering and cooling solutions. They are established by either large-scale enterprises or enterprises offering cloud-based services. Vendors in the market-built collocation and managed to host facilities and rent them to other large and small- and medium-sized enterprises (SMEs).
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This market report extensively covers market segmentation by component (IT infrastructure, power management, mechanical construction, general construction, and security solutions), end-user (BFSI, energy, IT, and others), and geography (North America, APAC, Europe, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
The global market is experiencing rapid growth due to the increasing demand for storage and processing of digital data.The United States and China are the largest contributors to the data center market.Cloud computing and big data analytics are major driving factors behind the growth of the data center market.Green data centers, which focus on energy efficiency and sustainability, are gaining popularity in the market. With the rise of artificial intelligence and the Internet of Things (IoT), the demand is expected to further increase in the coming years.
The rise in the adoption of multi-cloud and network upgrades to support 5Gs is notably driving the market growth. Its highly capital-intensive business facilities, with investments upward of a billion. The stakeholders used to the building and construction industry face immense pressure to adhere to timelines and start operations as soon as possible. At this time, market and costs per megawatt are the key indicators considered for facility's design and construction process. Meeting contractual schedules and performance requirements are major challenges for the growth of the market. The delay in developing a generally occurs due to government inactions, public opposition, inability to obtain financing, weather conditions, industrial accidents, and labor disruptions.
Moreover, the market has witnessed unprecedented demand in 2021-2022 as businesses increase investments to upgrade IT sector and shift toward cloud services. Enterprises purchase server configurations supporting big data analytics, AI (artificial intelligence), and software-defined infrastructure. However, a shortage in the supply of server components from the supplier side renders it difficult for vendors to meet the demand. The shortage of server components also created an issue in lead times (the period between server order booking and server delivery) for some of the server vendor's channel partners (from 30 days to 3 months). Such issues can delay the launch of servers in the market, resulting in operators incurring additional costs, which may hamper the growth of the market during the forecast period.
Increased adoption of HPC across enterprises is a key trend in the market. HPC is a combination of processes for delivering higher and more efficient performance in computing. Usually, HPC systems are a cluster of processors with 16-64 nodes. They use algorithms, networks, and simulated computer environments, ranging from small cluster computers to large supercomputers. HPC systems are primarily used for scientific and engineering applications. They have a high level of computing performance compared with general-purpose computers. The performance of HPC systems is measured in floating-point operations per second (FLOPS) instead of million instructions (MIPS). HPC systems aid in solving recurring problems and complex operations much faster and more efficiently for applications such as physical simulations, weather forecasting, quantum mechanics, and molecular modelling.
In addition, the increasing need to establish product innovation and economic competitiveness drives the demand for HPC. HPC systems are mainly used by aerospace and defense companies, governments, laboratories, and research centers. Help these firms require these systems to solve highly complex tasks, such as simulating air effects on plane wings and determining weather conditions. Cloud-based HPC systems are likely to minimize the expenditure of SMEs as they require low initial investments for infrastructure construction and hardware implementation. The following are some examples of investments in HPC in the market.
HPC systems incorporate tens of thousands of processors that can perform billions and trillions of computations or calculations per second. To perform these calculations efficiently, HPC systems need highly configured servers that can handle compute-intensive workloads. The rising use of HPC systems will continue to increase the demand for high-performance, These factors impact the development of the market growth and trends during the forecast period.
Increasing power consumption is a challenge to market growth. Due to a rise in internet penetration, the growing use of social networking sites, the improvement of automation technologies, smart city initiatives, and the implementation of AI across industries are driving investments. Globally, it will account for nearly 4% of the world's electricity consumption in 2022. This number is expected to double by the end of the forecast period. In the market, servers and cooling solutions account for a major share of electricity consumption.
Moreover, most developed nations, such as the US, the UK, Japan, and emerging countries, observe significant power production and consumption gaps. Large-sized are used by multiple enterprises, and millions of users need to be powered continuously to ensure business continuity. The construction of globally is increasing yearly, which raises the risk of power shortage during the forecast period. Vendors are also moving toward modernizing. The installation of intelligent infrastructure systems, such as automation software, DCIM solutions, and energy-efficient power equipment, will gain popularity during the forecast period. Moreover, enterprises are slowly moving toward energy-efficient infrastructure models for construction. This shift toward greener energy sources and the focus on reducing carbon emissions can hinder market growth during the forecast period.
The Market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Amazon.com Inc.: The company offers data center solutions such as AWS data center.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the IT infrastructure segment will be significant during the forecast period. IT infrastructure segment includes server infrastructure, storage infrastructure, software-defined network infrastructure, converged infrastructure, backup and recovery software, automation software, and infrastructure management (DCIM) solutions. The use of demand for computing power and storage to support the growth in data traffic. Enterprises globally have embraced cloud technologies and are moving their data from on-premises to cloud-based. This trend is expected to continue during the forecast period to create demand for servers, storage infrastructure, and other IT equipment.
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The IT Infrastructure segment was valued at a market share of USD 171.96 billion in 2017 and continued to grow until 2021. The major reason for the growth of these segments is the rise in investments in hyperscale data centers (HDCs). This segment is growing due to the expansion of green data centers, colocation data centers, and HDCs, increased capacity as well as the adoption of advanced virtualization technologies which will accelerate the growth of the global market during the forecast period.
During the past few years, hyper scalers have invested nearly USD 200 billion in capacity expansion and opening new centres. As the increase in the number of HDCs these trends, the market anticipates sustained growth, driven by a commitment to efficiency, strategic colocation, robust connectivity, and innovative virtualization practices.The increase in the number of HDCs is estimated to create demand IT infrastructure and other related infrastructure across the world these are the factors in turn will help in the growth of the market during the forecast period.
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North America is estimated to contribute 36% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. In this region, enterprises are increasingly adopting cloud solutions from hyper-scale providers such as AWS, Microsoft, and Oracle to meet computing capacity requirements with minimum expenditure. Also, the region has several already established by enterprises. For instance, Apple Inc. (Apple) has all 11 centre of which six are located in this region.
Moreover, real-estate enterprises are supporting the growth of the market in North America. and the US, also followed by countries such as Canada, has been at the forefront of driving the adoption of new technologies, and this trend is expected to result in market growth analysis.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Data Center Market Scope
Growth momentum & CAGR
Accelerate at a CAGR of 12.73%
Market growth 2023-2027
USD 329.82 billion
YoY growth 2022-2023(%)
North America, APAC, Europe, South America, and Middle East and Africa
Performing market contribution
North America at 36%
US, Canada, China, Germany, and UK
|Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks
Key companies profiled
Alphabet Inc., Amazon.com Inc., Apple Inc., Cisco Systems Inc., CyrusOne LLC, Digital Realty Trust Inc., Equinix Inc., Hewlett Packard Enterprise Co., Intel Corp., International Business Machines Corp., Microsoft Corp., Nippon Telegraph and Telephone Corp., Oracle Corp., Salesforce Inc., SAP SE, Verizon Communications Inc., 365 Data Centers, China Telecom Corp. Ltd., Cyxtera Technologies Inc., and KDDI Corp.
Parent market analysis, Market growth and forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period.
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