Data Center Market to Grow by USD 434.8 Billion (2024-2028), Driven by Multi-Cloud Adoption and 5G Network Upgrades, AI-Powered Report Highlights Market Trends - Technavio

NEW YORK, Nov. 13, 2024 /PRNewswire/ -- Report on how AI is redefining market landscape - The global data center market size is estimated to grow by USD 434.8 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of 14.52% during the forecast period. Rise in adoption of multi-cloud and network upgrades to support 5G is driving market growth, with a trend towards implementation of AI in data centers. However, cybersecurity issues poses a challenge.Key market players include 365 Data Centers, Alphabet Inc., Amazon.com Inc., Apple Inc., China Telecom Corp. Ltd., Cisco Systems Inc., CyrusOne LLC, Cyxtera Technologies Inc., Digital Realty Trust Inc., Equinix Inc., Hewlett Packard Enterprise Co., Intel Corp., International Business Machines Corp., KDDI Corp., Microsoft Corp., Nippon Telegraph and Telephone Corp., Oracle Corp., Salesforce Inc., SAP SE, and Verizon Communications Inc..

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Market Driver

Data centers are enhancing energy efficiency through the application of Artificial Intelligence (AI). AI technology enables faster decision-making and optimization of server, power, and cooling systems. Data center service providers are integrating AI into automation software to eliminate human intervention and promote energy efficiency. AI facilitates real-time adjustments to cooling processes, optimizing power usage, and minimizing downtime and human errors. AI monitors device performance in data centers, predicting potential issues and adjusting processes accordingly. By 2028, advanced robots with AI and machine learning capabilities will increase operating efficiency in cloud data centers by over 30%. This trend will significantly contribute to the growth of the global data center market. The benefits of AI-based data center automation include reduced infrastructure costs, operating expenses, deployment time, and quicker issue resolution. 

Data centers play a crucial role in today's digital world, supporting e-commerce businesses, personalized data storing and analyzing for applications, and managing increasing storage requirements from mobile data use and internet usage. Cloud data storage solutions like Amazon Web Services offer scalability and flexibility for businesses and individuals. Data security, backups, and internet bandwidth are top priorities, driving demand for managed hosting and colocation services. Big data and data analytics require specialized regions and hyper-scale platforms. IoT, Artificial Intelligence, and Machine Learning also add to the growing workloads. Green data centers and IT infrastructure solutions are essential for energy efficiency. Enterprise Engineering Solutions and Software Testing Help cater to customers' needs in digitalization. The Department of Energy is pushing for innovation in this sector. Overall, data centers are essential for application performance, data security, and business growth. 

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 Market Challenges

• Data is a valuable asset for businesses, fueling revenue opportunities through trend analysis and informed decision-making. However, securing sensitive data, such as customer information, is a significant concern. Cyberattacks, particularly against cloud services and IoT solutions, pose a growing threat. These attacks can compromise data and even force small enterprises to shut down. Strict data protection regulations and potential penalties for non-compliance add to the challenge. The rise of DDoS attacks, which make data center resources unavailable, further hinders market growth. These factors collectively present significant hurdles for the global data center market during the forecast period.
• Data Centers are essential for businesses and individuals in today's digital economy, supporting Artificial Intelligence, Machine Learning, IoT, Cloud computing, and Edge computing. However, challenges abound. The Department of Energy Green Data Centers for energy efficiency. Enterprise Engineering Solutions and Software Testing Help address IT infrastructure needs. Macroeconomic factors, including cost savings, scalability, and flexibility, drive businesses towards cloud technology. Real-time data processing is crucial for autonomous vehicles and smart cities, but latency is a concern. Decentralized Data Centers address local special circumstances and data sovereignty regulations. B2B enterprises grapple with hardware-related expenses, while national statistical offices require high levels of digitization. Exponential trend smoothing and the S-curve function help businesses navigate the exponential growth of data. Business leaders must consider the impact of exchange rates, digitalization, and competition when making decisions. Online retailers, in particular, need to ensure fast speed to prevent lost data and sales.

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Segment Overview 

This data center market report extensively covers market segmentation by

1. Component 
• 1.1 IT infrastructure
• 1.2 Power management
• 1.3 Mechanical construction
• 1.4 General construction
• 1.5 Security solutions
2. End-user 
• 2.1 BFSI
• 2.2 Energy
• 2.3 IT
• 2.4 Others
3. Geography 
• 3.1 North America
• 3.2 APAC
• 3.3 Europe
• 3.4 South America
• 3.5 Middle East and Africa

1.1 IT infrastructure- The data center market is experiencing significant growth due to increasing digital transformation and cloud adoption. Companies are investing heavily in data centers to support their expanding digital operations. Data centers provide businesses with essential services, including data storage, processing, and connectivity. They enable organizations to manage and analyze large amounts of data efficiently and securely. The market is expected to continue growing as more businesses adopt digital strategies and rely on data centers to power their operations.

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Research Analysis

The Data Center market is experiencing significant growth due to the increasing demand for IT infrastructure to support the digitalization of businesses and individuals. Artificial Intelligence and Machine Learning are driving the need for large-scale data processing, while the Internet of Things generates vast amounts of data that require efficient storage and analysis. Cloud computing and edge computing are popular solutions for businesses seeking cost savings, scalability, and flexibility. Real-time data processing is crucial for online retail and e-commerce, making data centers an essential component of their IT infrastructure. Data center systems enable businesses to store, analyze, and manage data center workloads efficiently, ensuring speed and minimizing the risk of lost data. Digitalization is transforming various industries, leading to an increased demand for data centers to support personalized data and real-time insights. Data centers play a vital role in the digital economy, enabling businesses to leverage cloud technology and improve their competitiveness.

Market Research Overview

The Data Center market is experiencing significant growth due to the increasing adoption of technologies such as Artificial Intelligence (AI) and Machine Learning (ML) in various sectors. The Internet of Things (IoT) and Cloud computing are driving the demand for IT infrastructure, with the Department of Energy promoting Green Data Centers for energy efficiency. Businesses, individuals, and B2B enterprises are leveraging data centers for cost savings, scalability, and flexibility, enabling real-time data processing and reducing latency. Digitalization is transforming industries, from autonomous vehicles to smart cities, leading to an exponential trend in data generation and storage requirements. Decentralized Data Centers and End-users in specialized regions address local circumstances and data sovereignty regulations. Macroeconomic factors, digital economy growth, internet penetration, and the rise of big data and data analytics further fuel the market's expansion. Cloud technology, data center systems, and managed hosting solutions cater to various industries, ensuring data security, backups, and Internet bandwidth. Competitors in the market include colocation, public cloud, and hyper-scale platforms, offering various services such as application performance, storage requirements, mobile data use, and e-commerce solutions.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Component
• IT Infrastructure
• Power Management
• Mechanical Construction
• General Construction
• Security Solutions
• End-user
• BFSI
• Energy
• IT
• Others
• Geography
• North America
• APAC
• Europe
• South America
• Middle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio