logo

Data Center Services Market Size (2024 - 2029)

The data center services market is experiencing significant growth driven by the increasing demand for cloud technology, which offers flexibility and high speed, essential for businesses to manage and analyze vast amounts of data. The rise in online retail and e-commerce has further propelled the need for data center services, as organizations seek to store and process personalized customer data. Despite challenges related to data privacy and security, the shift towards cloud data storage and the expansion of internet usage continue to bolster the market. The COVID-19 pandemic accelerated this trend, as the demand for internet bandwidth and cloud services surged due to remote work and increased online activities.

Home Market Analysis Technology, Media and Telecom Research Information Technology Research IT Infrastructure Research Data Centers Research Data Center as a Service Market Market Size

Market Size of Data Center Services Industry

Data Center Service Market Summary
Study Period 2019 - 2029
Market Size (2024) USD 127.44 Billion
Market Size (2029) USD 272.04 Billion
CAGR (2024 - 2029) 16.38 %
Fastest Growing Market Asia Pacific
Largest Market North America

Major Players

Data Center Services Market Major Players

*Disclaimer: Major Players sorted in no particular order

Data Center Services Market Analysis

The Data Center Services Market size is estimated at USD 127.44 billion in 2024, and is expected to reach USD 272.04 billion by 2029, growing at a CAGR of 16.38% during the forecast period (2024-2029).

The primary driver behind the surge in demand for data center services is the widespread adoption of cloud computing. Businesses and firms are turning to cloud services for their storage, computing, and application requirements, leading to a surge in data volumes that necessitates expanded data center capacity.

The rising demand for digital transformation initiatives in multiple industries is driving the need for robust data center infrastructure. Firms are increasingly turning to digital technologies to boost operations, elevate customer experiences, and foster innovation. Organizations are progressively relying on big data and analytics, collecting and analyzing extensive data sets for decision-making. This trend underscores the growing need for robust data storage and processing infrastructure.

In January 2024, Digital Realty, a global provider of cloud- and carrier-neutral data center services, unveiled its inaugural data center in India. Situated in Chennai's industrial hub, the 10-acre campus boasts the capacity to support up to 100 megawatts of critical IT load. This marks a pivotal expansion for the company's global data center platform, addressing the escalating digital transformation demands in significant global markets.

Moreover, the increase of the Internet of Things (IoT) adds another layer of demand, with countless connected devices generating massive amounts of data that need to be stored, processed, and analyzed. The expanding sophistication of artificial intelligence and machine learning necessitates substantial computational power and storage, thereby driving up the demand for data center services.

The surge in remote work and digital services, catalyzed by the COVID-19 pandemic, underscored the importance of data centers. They now serve as crucial hubs for secure and reliable access to information and applications. Additionally, stringent data protection regulations are nudging businesses to bolster their investments in data center services to meet compliance standards. Technological advancements, including energy-efficient designs and enhanced cooling solutions, are enhancing the appeal and cost-effectiveness of data centers, thereby fuelling market growth.

In April 2024, CoreSite, a subsidiary of American Tower Corporation and a provider of hybrid IT solutions, revealed its certification under the NVIDIA DGX-Ready Data Center program. This certification equips CoreSite to offer scalable, high-performance infrastructure, catering specifically to organizations seeking to leverage the growing appetite for artificial intelligence (AI), machine learning (ML), and other high-density applications. Customers opting to host their NVIDIA DGX infrastructure with CoreSite can gain access to a network of high-density data center campuses in key locations, such as Los Angeles, Silicon Valley, Chicago, and Northern Virginia, tailored for NVIDIA AI and high-performance computing.

However, the growth of the market is restricted by high operational costs, energy consumption concerns, and limited availability of skilled professionals. Additionally, data security and privacy challenges, along with regulatory compliance requirements, pose significant barriers to expansion.

Data Center Services Industry Segmentation

Data center service encompasses processing, networking, and data storage. With the increasing recognition of data as a valuable asset, the data services market is poised for robust growth. The rise of industry automation and the expansion of digital businesses are driving the demand for extensive data center services.

The data center services market is segmented by type of service (managed hosting service and colocation service), data center type (tier-i and -ii, tier-iii, and tier-iv), end-user industry (BFSI, healthcare, retail, manufacturing, IT and telecom, and other end-user industries), and geography (North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa).

The market size and forecasts are provided in terms of value (USD) for all the above segments.

By Type of Service
Managed Hosting Service
Colocation Service
By Data Center Type
Tier-I and -II
Tier-III
Tier-IV
By End-user Industry
BFSI
Healthcare
Retail
Manufacturing
IT and Telecom
Other End-user Industries
By Geography
North America
Europe
Asia-Pacific
Latin America
Middle East and Africa
Need A Different Region Or Segment?
Customize Now

Data Center Services Market Size Summary

The data center services market is poised for significant expansion, driven by the increasing demand for cloud technology and the surge in data generation from IoT and Industry 4.0 advancements. As businesses strive to manage vast amounts of critical data and maintain a competitive edge, the flexibility and speed offered by cloud computing have become essential. This shift is further accelerated by the growing e-commerce sector, which necessitates advanced data storage and analysis capabilities. Despite concerns over data privacy and security, the market continues to thrive, with data center services playing a crucial role in supporting remote work and digital transformation, especially during the COVID-19 pandemic. The rise of smart cities and intelligent buildings also contributes to the demand for robust data center infrastructure, as these environments generate and require real-time data processing and storage solutions.

Regionally, North America stands out as a key player in the data center services market, driven by its technological innovations and the high demand for cloud computing and IoT solutions. The United States, in particular, benefits from its strong IT sector and the proliferation of hyper-scale platforms, which necessitate advanced data center services. The popularity of colocation data centers is also on the rise, as businesses recognize the advantages of leasing infrastructure over building their own. Globally, the market remains fragmented with intense competition among major players like Fujitsu Ltd, Capgemini, and HCL Technologies. Strategic partnerships and technological advancements, such as those by Intel Corp and Google Cloud, continue to enhance the efficiency and security of data center operations, further propelling market growth.

Explore More

Data Center Services Market Size - Table of Contents

  1. 1. MARKET DYNAMICS

    1. 1.1 Market Overview

    2. 1.2 Industry Value Chain Analysis

    3. 1.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 1.3.1 Bargaining Power of Suppliers

      2. 1.3.2 Bargaining Power of Consumers

      3. 1.3.3 Threat of New Entrants

      4. 1.3.4 Intensity of Competitive Rivalry

      5. 1.3.5 Threat of Substitute Products

    4. 1.4 Impact of COVID-19 on the Market

    5. 1.5 Market Drivers

      1. 1.5.1 Increase in the Expenditure on Data Center Technology

      2. 1.5.2 Rising Data Center Complexities Due to Scalability

    6. 1.6 Market Restraint

      1. 1.6.1 Concerns Relating to Data Privacy

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Type of Service

      1. 2.1.1 Managed Hosting Service

      2. 2.1.2 Colocation Service

    2. 2.2 By Data Center Type

      1. 2.2.1 Tier-I and -II

      2. 2.2.2 Tier-III

      3. 2.2.3 Tier-IV

    3. 2.3 By End-user Industry

      1. 2.3.1 BFSI

      2. 2.3.2 Healthcare

      3. 2.3.3 Retail

      4. 2.3.4 Manufacturing

      5. 2.3.5 IT and Telecom

      6. 2.3.6 Other End-user Industries

    4. 2.4 By Geography

      1. 2.4.1 North America

      2. 2.4.2 Europe

      3. 2.4.3 Asia-Pacific

      4. 2.4.4 Latin America

      5. 2.4.5 Middle East and Africa

Data Center Services Market Size FAQs

The Data Center Services Market size is expected to reach USD 127.44 billion in 2024 and grow at a CAGR of 16.38% to reach USD 272.04 billion by 2029.

In 2024, the Data Center Services Market size is expected to reach USD 127.44 billion.

Data Center Services Market Report Snapshots

Data Center Services Market Analysis - Industry Forecast, Size & Report (2024 - 2029)