Data Center Market is expected to reach a revenue of USD 736.9 Bn by 2033, at 6.8 % CAGR: Dimension Market Research

New York, Dec. 09, 2024 (GLOBE NEWSWIRE) -- Overview:

The Data Center Market size is expected to reach USD 409.3 billion by 2024 and is further anticipated to reach USD 736.9 billion by 2033 according to Dimension Market Research. The market is anticipated to register a CAGR of 6.8% from 2024 to 2033.

A data center is an ecosystem of technologies, businesses, and services used in the development, usage, and operation of data center facilities. It contains various components, like hardware, software, and services. Hardware such as server storage devices, racks, networking equipment, and other hardware is utilized to store and distribute digital data and services.

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The US Overview

The Data Center Market in the US is projected to reach USD 146.4 billion in 2024 at a compound annual growth rate of 6.4% over its forecast period.

The US data center market is expanding due to increased cloud adoption, edge computing, and AI development, with key sectors like finance, healthcare, and e-commerce driving demand. Sustainability efforts, like green data centers, provide additional opportunities. However, challenges like high energy consumption, rising costs, and environmental regulations push providers toward energy-efficient infrastructure to ensure sustainable growth and compliance.

Important Insights

• The Data Center Market is expected to grow by USD 736.9 billion by 2033 from 2025 with a CAGR of 6.8%.
• The hardware segment is anticipated to get the majority share of the Data Center Market in 2024.
• The Tier 3 segment is expected to be leading the market in 2024.
• The Cloud service providers are expected to get the largest revenue share in 2024 in the Data Center Market.
• North America is predicted to have a 41.2% share of revenue share in the Global Data Center in 2024.

Global Data Center Market: Trends

• Hybrid Cloud Solutions: Various organizations are adopting hybrid cloud models, integrating on-premises data centers with public and private clouds to optimize flexibility, scalability, and cost-efficiency.
• Edge Computing Growth: The expansion of edge computing is gaining momentum as businesses look to reduce latency and enhance performance for IoT applications and real-time data processing.
• Increased Automation and AI: Automation & AI technologies are being highly integrated into data center operations to improve efficiency, streamline management, and enhance predictive maintenance.
• Focus on Sustainability: Data centers are prioritizing sustainability initiatives, like using renewable energy sources and implementing energy-efficient designs, in response to regulatory pressures and growing environmental concerns.

Data Center Market: Competitive Landscape

The data center market is driven by rapid digital transformation and growth in the demand for cloud services, AI, and edge computing. Operators focus on efficiency, scalability, and sustainability, with new entrants launching solutions and established players expanding globally. High capital investments, energy challenges, and regulations drive efforts toward faster deployment, greener technologies, and easy connectivity.

Some of the major players in the market include Google, AWS, Microsoft, HPE, NTT, and more.

Some of the prominent market players:

• Google
• AWS
• Microsoft
• HPE
• NTT
• IBM
• Cisco
• Schneider Electric
• ABB
• Other Key Players

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Data Center Market Scope

Segment Analysis:

Tier 3 data centers are anticipated to dominate the market in 2024, valued for their high reliability & redundant network connectivity. By connecting multiple carriers and ISPs, they develop diverse communication paths, reducing network disruptions and ensuring consistent uptime for mission-critical applications. Further, Tier 4 data centers are anticipated to grow the fastest, prioritizing both physical and cybersecurity. They use biometric access, intrusion detection, surveillance, and secure portals to provide unauthorized entry, while advanced cybersecurity strategies protect against cyber threats, ensuring robust data protection for sensitive operations.

Data Center Market Segmentation

By Offerings

• Hardware
  • IT Modules
  • Power Modules
  • Cooling Modules
• Software
  • Monitoring & Management Tools
  • Automation & Orchestration Software
  • Backup & Disaster Recovery
  • Security Software
  • Virtualization Software
  • Analytics Software
• Services
  • Design & Consulting
  • Integration & Deployment
  • Support & Maintenance

 By Level

• Tier 1
• Tier 2
• Tier 3
• Tier 4

By Enterprise Size

• Large Enterprises
• SMEs

By Data Center Type

• Cloud Data Center
• Colocation Data Center
• Hyperscale Data Center
• Enterprise Data Center
• Micro Data Center
• Edge Data Center
• Others

By End User

• Cloud Service Provider
• Technology Provider
• Telecom
• Healthcare
• BFSI
• Retail & E-commerce
• Entertainment & Media
• Energy
• Others

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Global Data Center Market: Driver

• Cloud Services Demand: The growth in the adoption of cloud computing solutions across many industries drives the need for more data centers to help scalable and flexible infrastructure.
• Edge Computing Expansion: The growth of edge computing necessitates localized data processing, improving the demand for data centers that can provide lower latency and better performance.
• AI and Big Data: The increasing dependency on artificial intelligence and big data analytics needs advanced data storage and processing capabilities, pushing the need for more robust data centers.
• Sustainability Initiatives: A growing focus on energy efficiency and sustainability leads companies to invest in green data centers, creating opportunities for innovation and compliance with environmental regulations.

Global Data Center Market: Restraints

• High Energy Consumption: Data centers demand major power for operation and cooling, leading to better operational costs and environmental concerns.
• Rising Operational Costs: Maintenance, staffing, and energy costs can highly impact profitability, mainly for smaller operators struggling to compete with larger providers.
• Stringent Regulations: Accepting environmental and data protection regulations can impose additional costs & operational challenges, restricting market entry and expansion.
• Supply Chain Disruptions: Global supply chain issues can delay the procurement of important hardware and technology, impacting the timely deployment and scaling of data center facilities.

Global Data Center Market: Opportunities

• Emerging Markets: The increase in digitalization in emerging economies presents opportunities for data center expansion as the need for cloud services and internet access rises.
• AI and Machine Learning: The rise in integration of AI and machine learning in many applications drives the demand for advanced data processing capabilities, creating demand for specialized data centers.
• Green Data Centers: There is a major focus on sustainability, presenting opportunities for companies to invest in energy-efficient technologies and green practices, attracting environmentally-conscious clients.
• 5G Deployment: The rollout of 5G technology improves connectivity and data transfer speeds, growth in the demand for edge computing solutions and localized data centers to support real-time applications.

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Regional Analysis

North America is expected to hold the largest market share of 41.2% in 2024, driven by technological development and digital transformation, driving the demand for data centers to support cloud computing, e-commerce, and online services. Key sectors like finance, healthcare, entertainment, and e-commerce develop vast data, growing the need for advanced infrastructure. Further, the Asia Pacific region is anticipated to grow fastest, powered by rapid digitization across industries and rising e-commerce. Broad mobile device usage further boosts demand for data centers to support mobile apps, payments, and services, driving regional market expansion.

By Region

North America

• The U.S.
• Canada

Europe

• Germany
• The U.K.
• France
• Italy
• Russia
• Spain
• Benelux
• Nordic
• Rest of Europe

Asia-Pacific

• China
• Japan
• South Korea
• India
• ANZ
• ASEAN
• Rest of Asia-Pacific

Latin America

• Brazil
• Mexico
• Argentina
• Colombia
• Rest of Latin America

Middle East & Africa

• Saudi Arabia
• UAE
• South Africa
• Israel
• Egypt
• Rest of MEA

Recent Developments in the Data Center Market

• September 2024: G42 planned to plant 2 Gigawatts (GW) of AI data centers in India and deploy them as India’s largest supercomputers with up to 8 exaFLOP performance, as its capacity is almost double India's total existing data center capacity, which is estimated to be above 1 GW.
• June 2024: Freshworks Inc. launched its new data center, powered by Amazon Web Services (AWS), in the UAE, which highlights its’ commitment to driving innovation across the Middle East and Africa (MEA) by making it easy for businesses to have the full power of its modern, AI-powered customer and employee service solutions.
• June 2024: CtrlS Datacenters plans to create a data center campus in Kolkata by investing USD 264 million to build the data center campus, implemented over four phases, and providing more than 60MW of IT capacity.
• May 2024: Microsoft announced its plan to plant a new cloud and artificial intelligence (AI) infrastructure in Thailand, to provide AI skilling opportunities for over 100,000 people and help the nation's growing developer community.
• January 2024: Digital Realty launched its first data center in India on a 10-acre campus capable of helping up to 100 megawatts of critical IT load capacity that is located in the heart of Chennai's industrial and manufacturing hub, which is a major addition to the company's global data center platform as it expands to meet digital transformation needs in key markets around the world.

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About Dimension Market Research (DMR):

Dimension Market Research (DMR) is a market research and consulting firm based in India & US, with its headquarters located in the USA (New York). The company believes in providing the best and most valuable data to its customers using the best resources analysts into work, to create unmatchable insights into the industries, and markets while offering in-depth results of over 30 industries, and all major regions across the world. We also believe that our clients don’t always want what they see, so we provide customized reports as well, as per their specific requirements to create the best possible outcomes for them and enhance their business through our data and insights in every possible way.