Burlingame, Aug. 13, 2024 (GLOBE NEWSWIRE) -- The global Data Center as a Service Market, valued at $89.58 billion in 2024, is on a trajectory of rapid expansion, with projections indicating it will soar to $289.91 billion by 2031, growing at a compound annual growth rate (CAGR) of 18.3% from 2024 to 2031, as per a recent report by Coherent Market Insights. Growing volume of data generated by organizations across industries has increased the need for scalable and flexible IT infrastructure. Data center as a service allows organizations to deploy infrastructure on demand as their computational and storage requirements change over time. It eliminates the upfront capital expenditure required to set up on-premise data centers and reduces the maintenance overhead. This pay-as-you-go model has become highly attractive for enterprises looking to focus more on their core business functions rather than managing IT infrastructure.
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Market Dynamics:
The growing demand for cost-effective data center services and increasing adoption of cloud-based services are the major factors driving the growth of the global data center as a service market. The data center as a service offers various benefits such as low upfront cost, reduced maintenance cost, increased scalability, and pay-per-use model. Additionally, it allows enterprises to focus on their core business activities rather than IT infrastructure management. The growing reliance on cloud-based applications and big data analytics is further propelling the demand for data center as a service.
Data Center as a Service Market Report Coverage
| Report Coverage | Details |
| Market Revenue in 2024 | $89.58 billion |
| Estimated Value by 2031 | $289.91 billion |
| Growth Rate | Poised to grow at a CAGR of 18.3% |
| Historical Data | 2019–2023 |
| Forecast Period | 2024–2031 |
| Forecast Units | Value (USD Million/Billion) |
| Report Coverage | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Segments Covered | By Infrastructure, By Organization Size, By Vertical |
| Geographies Covered | North America, Europe, Asia Pacific, and Rest of World |
| Growth Drivers | • Global Need For Scalability In IT Infrastructure • Rising Significance Of Optimal Resource Utilization |
| Restraints & Challenges | • Security threats associated with cloud adoption • High initial investment requirement |
Market Trends:
The growing popularity of colocation services and increased investments in data center construction are the major trends witnessed in the global data center as a service market. Colocation or colo services provide dedicated space, power, cooling, and physical security for organizations to house their servers and storage equipment within the data center. It is a popular data center infrastructure outsourcing option for organizations to reduce capital expenditure. Moreover, leading cloud service providers are investing heavily in designing and constructing mega data center facilities to cater to the growing demand from enterprises. For instance, in 2021 AWS announced plans to invest $5 billion for construction of data centers across 27 regions globally by 2030.
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Market Opportunities:
Infrastructure as a Service (IaaS) allows enterprises to outsource their data center hardware infrastructure such as servers, storage, networking components, and data center space. It provides on-demand provisioning of servers, storage, and other computing resources as needed without upfront investment. Enterprises can avoid huge upfront capital expenditure on building their own data centers and instead opt for pay-per-use basis. IaaS adoption is growing as it provides enterprises flexibility, scalability, and accelerated time-to-market.
Managed services allow enterprises to outsource management and maintenance of their data centers to third-party managed service providers. It provides various managed services like server management, storage management, database management, backup and disaster recovery services, and network management. Managed services help focus internal IT teams on more strategic initiatives rather than routine data center operations. It further reduces IT costs and risks for enterprises. Growing complexity of on-premise data center infrastructure and need for continuous optimization is fueling adoption of managed services.
Key Market Takeaways
Data Center as a Service market is anticipated to witness a CAGR of 18.3% during the forecast period 2024-2031, owing to growing demand for scalable, flexible and economic data center solutions.
On the basis of Infrastructure, servers segment is expected to hold a dominant position, owing to increasing dependence of enterprises on virtualization. Within servers, demand for virtual servers is expected to grow at higher rate.
On the basis of Organization Size, SMEs segment is expected to hold a dominant position over the forecast period, due to their need to optimize IT budgets.
On the basis of Vertical, Retail segment is expected to hold a dominant position due to growing e-commerce industry requiring scalable data center infrastructure.
On the basis of region, North America is expected to hold a dominant position over the forecast period, due to early adoption of advanced data center solutions in this region.
Key players operating in the Data Center as a Service market include IBM Corporation, Microsoft Corporation, Hewlett Packard Enterprise Development LP, and others. These players are focusing on new service launches and partnerships to expand their market share.
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Recent Developments:
In June 2024, Cisco expanded its security footprint with the launch of the first security cloud data centers in Jakarta, Indonesia. This launch marks a new milestone in Cisco’s commitment to supporting businesses’ cyber security readiness in the country. This is in response to the fast-growing demand for security services across the country. The move allows businesses in Indonesia, especially the public sector, financial services, and state-owned enterprise customers, to align closer to local data regulations and compliance requirements.
In August 2023, Digital Realty introduced high-density data center colocation services in 28 markets in Asia Pacific, EMEA, and North America. Up to 70 kilowatts of workload per rack can be supported by the service.
Detailed Segmentation:
By Infrastructure:
- Servers
- Storage
- Networking
By Organization Size:
- SMEs
- Large Enterprises
By Region:
North America:
- U.S.
- Canada
Latin America:
- Brazil
- Argentina
- Mexico
- Rest of Latin America
Europe:
- Germany
- U.K.
- Spain
- France
- Italy
- Russia
- Rest of Europe
Asia Pacific:
- China
- India
- Japan
- Australia
- South Korea
- ASEAN
- Rest of Asia Pacific
Middle East:
- GCC Countries
- Israel
- Rest of Middle East
Africa:
- South Africa
- North Africa
- Central Africa
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