Data Centre Market Size, Share and Growth Analysis Report - Forecast Trends and Outlook (2025-2034)

The data centre market attained a value of USD 361.50 Billion in 2024. The market is expected to grow at a CAGR of 11.40% during the forecast period of 2025-2034. By 2034, the market is expected to reach USD 1.06 trillion.

Data centre operations are evolving through artificial intelligence (AI) improvements in effectiveness, reliability, and scalability. AI will fulfill an effective function by automating the management of workloads, monitoring the health of the system on a continual basis, allowing it to predict failure of available equipment, and optimizing energy usage. AI applications are dramatically impacting data centres itself by applying GPU intensive workloads, therefore a data centre will require adequate infrastructure and scalable and advanced cooling within their facilities. Automation will also allow for optimized resource that minimizes human interactions to lessen opportunity for errors and minimize operational downtime.

The rapid shift to cloud computing is driving the data centre market development. Businesses are increasingly migrating workloads to cloud platforms like AWS, Microsoft Azure, and Google Cloud, demanding hyperscale and colocation data centres for reliable infrastructure. In June 2025, Alibaba Cloud opened a second South Korea data centre to meet rising local demand for AI and cloud. This trend is fueled by the need for scalable, cost-effective solutions that support remote work, digital transformation, and real-time analytics.

Key Trends and Recent Developments

September 2025

OpenAI announced a major new data centre in India. The facility supports the growing demand for AI services in the region, marking a significant expansion of OpenAI's global infrastructure and reinforcing its commitment to advancing AI capabilities in emerging markets like India.

August 2025

Rolls-Royce launched a new data centre engine in China, targeting the country's growing demand for reliable and efficient digital infrastructure. The advanced power solution is designed to support large-scale data centres with enhanced performance, energy efficiency, and lower emissions, reinforcing Rolls-Royce’s commitment to innovation.

July 2025

Goodman Group launched the Goodman Hong Kong Data Centre Partnership, a USD 2.7 billion investment vehicle focused exclusively on Hong Kong’s data centre market. With this, GHKDC aims to meet rising digital infrastructure demand through strategic development and long-term investment in data centre assets.

July 2025

United Kingdom-based operator Datum launched its second data centre in Manchester, expanding its footprint to meet rising regional demand for secure, high-performance digital infrastructure. The new facility enhances capacity for colocation and cloud services, supporting businesses with scalable, energy-efficient solutions.

Edge Computing Expansion

Edge computing is reshaping the data centre market trends by decentralizing data processing closer to end users and devices. In July 2025, NES Data revealed plans to launch edge and containerized data centres in India for enhancing local connectivity and supporting scalable digital infrastructure. This is essential for supporting latency-sensitive applications such as autonomous vehicles, IoT, smart cities, and AR/VR. Traditional centralized data centres are now complemented by smaller, distributed edge facilities. These micro data centres reduce transmission time, improve user experience, and enable real-time decision-making.

Data Sovereignty and Localization

Data sovereignty laws and regulatory frameworks are influencing where and how data centres are built. Governments worldwide are implementing rules that require data to be stored and processed within national borders, particularly in sectors like finance, healthcare, and defence. This is prompting global operators to localize infrastructure and develop region-specific facilities. Compliance with GDPR, India's data protection laws, and similar legislation in China and Brazil is now a strategic necessity

Sustainability and Green Initiatives

Environmental sustainability is a key driver of innovation and investment in the data centre industry. With rising concerns over energy consumption and carbon emissions, operators are adopting green practices, such as renewable energy integration, efficient cooling systems, and low-power hardware. In July 2025, DayOne began construction of its first 20MW hydrogen-powered data centre in Singapore. Innovations like liquid cooling, AI-driven energy management, and carbon-neutral facilities are also gaining momentum.

Hyperscale Data Centre Growth

The rise of hyperscale data centres continues to reshape the market. Hyperscale operators, such as Amazon, Microsoft, Meta, and Google require vast, scalable environments capable of supporting millions of users simultaneously. The demand for hyperscale centres is also driven by the explosion of data from AI, streaming, gaming, and social media. In September 2025, Techno Digital launched a 36MW AI-ready hyperscale data centre in Chennai, blending advanced technology with innovative, precise engineering.

Investment from Institutional and Private Equity

The data centre market is attracting significant investment from institutional players, private equity firms, and infrastructure funds. In July 2025, Google revealed plans to invest USD 6 billion in a new data centre in southern India, boosting cloud infrastructure and regional connectivity. Investment vehicles are being formed to acquire or develop data centre campuses, colocation facilities, and edge infrastructure. This influx of capital enables operators to scale rapidly, adopt new technologies, and enter emerging markets.

Data Centre Industry Segmentation

The report titled “Data Centre Market Report and Forecast 2025-2034” offers a detailed analysis of the market based on the following segments:

Market Breakup by Solution

• Solution
• Services

Key Insight: The solutions segment encompasses hardware, software, and integrated systems that enable data centre functionality. This includes servers, storage devices, networking equipment, virtualization software, and cooling solutions. Innovations, such as software-defined data centres (SDDC) and AI-driven management platforms also improve efficiency and scalability. In June 2025, NTT DATA launched AI-powered software-defined infrastructure services to enhance automation and efficiency for Cisco product users.

Market Breakup by IT Infrastructure

• Network
• Server
• Storage

Key Insight: The network segment plays a crucial role in the data centre market for ensuring efficient data flow and connectivity. With the rise of 5G, IoT, and edge computing, network infrastructure demands are growing rapidly to support low latency and high bandwidth applications. Companies lead in providing advanced networking equipment that enhances security and performance, enabling seamless data transmission and integration across cloud, colocation, and enterprise environments.

Market Breakup by Type

• Cloud Data Centre
• Colocation Data Centre
• Enterprise Data Centre
• Hyperscale Data Centre
• Others

Key Insight: Hyperscale data centres are enormous facilities designed for global cloud giants like Amazon, Microsoft, and Google, capable of supporting millions of users with massive compute and storage capacity. These centres leverage custom hardware, advanced cooling, and energy optimization techniques to reduce costs and environmental impact. Their rapid expansion drives innovation and competition in the data centre industry. In July 2025, ECP and KKR launched a USD 4 billion hyperscale data centre campus in Texas, boosting cloud infrastructure capacity and innovation.

Market Breakup by Construction

• New Data Centre
• Rebuild Data Centre

Key Insight: New data centre construction is a leading segment, driven by escalating demand for cloud services, AI, and edge computing. Companies and hyperscale providers are investing heavily in greenfield projects to build cutting-edge, energy-efficient facilities tailored to modern workloads. New builds allow incorporation of advanced cooling, renewable energy, and automation from the ground up, ensuring future-proof infrastructure that meets regulatory and sustainability standards, which is critical for long-term operational efficiency.

Market Breakup by Industry

• Banking, Financial Services, and Insurance
• Healthcare
• Government and Defense
• Manufacturing
• IT and Telecom
• Retail
• Energy
• Others

Key Insight: The banking, financial services, and insurance (BFSI) sector is the largest consumer of the data centre market due to its stringent requirements for security, compliance, and uptime. In August 2025, JPMorgan and Mitsubishi UFJ negotiated to back a USD 22 billion Texas data centre project, highlighting growing digital infrastructure investments. The BFSI sector’s increasing use of AI and blockchain technologies further drives demand for high-performance, resilient infrastructure capable of managing massive data volumes and regulatory complexities.

Market Breakup by Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa

Key Insight: North America is the most dominating region, driven primarily by the United States and Canada’s mature cloud ecosystems and hyperscale data centre growth. The region leads in innovation around green data centres, AI integration, and edge computing. In October 2024, Microsoft built its first data centres using wood in Virginia, aiming to reduce carbon emissions and advance its climate goals. Additionally, strong enterprise demand and favorable regulatory environments contribute to rapid data centre market expansion.

Data Centre Market Share

Surging Adoption of Data Centre Services

The services segment is rapidly growing and includes colocation, managed services, cloud hosting, and consulting. Providers like Equinix and Digital Realty offer colocation spaces that allow businesses to rent physical space, power, and cooling while leveraging the provider’s network infrastructure. Managed services simplify operations by handling maintenance, security, and upgrades. Cloud service providers like AWS also fall under this segment, offering scalable, on-demand computing resources.

Data Centre Server & Storage to Witness Prominence

Servers form the backbone of the data centre IT infrastructure and dominate the data centre market due to their essential role in processing and managing workloads. Market leaders offer high-performance, scalable servers designed for demanding cloud, enterprise, and hyperscale environments. Innovations in blade servers, GPU-accelerated computing, and energy-efficient architectures are allowing data centres to meet escalating performance and capacity needs. In May 2205, Qualcomm launched server data centre processors designed to seamlessly integrate with Nvidia chips, boosting AI and computing performance.

Storage infrastructure is vital for handling the massive volumes of data generated daily. This segment includes SAN, NAS, and emerging software-defined storage solutions. Companies provide scalable and resilient storage options to ensure data integrity, quick access, and disaster recovery. With increasing data-intensive applications, including AI, analytics, and streaming, efficient storage solutions are critical to supporting real-time data processing and archival. The growing adoption of flash storage and cloud-integrated storage architectures is transforming this segment, making it increasingly important for overall data centre efficiency.

Thriving Demand for Colocation & Cloud Data Centre

The colocation data centre industry value is rising to provide third-party data centre space where businesses can rent racks or cages for their equipment while benefiting from shared power, cooling, and security. Providers like Equinix and Digital Realty lead this segment, which appeals to enterprises seeking to avoid the capital expense of building their own facilities. Colocation centres offer flexibility, scalability, and connectivity to multiple carriers and cloud providers, enabling hybrid IT environments.

Cloud data centres, operated by providers like Amazon Web Services, Microsoft Azure, and Google Cloud, offer scalable, on-demand computing resources accessed via the internet. Cloud data centres dominate due to their flexibility, cost-effectiveness, and global reach. In July 2025, Google revealed plans to invest USD 6 billion in a 1GW cloud data centre campus in Visakhapatnam, Andhra Pradesh. The growing demand for hybrid and multi-cloud solutions further cements cloud data centres as a core part of modern IT strategies.

Rebuild Data Centre to Gain Traction

The rebuild data centre market remains essential for extending asset life and improving performance. Many enterprises and colocation providers upgrade legacy facilities to support higher power densities, better cooling systems, and enhanced security. In August 2025, Equinix upgraded its Paris PA3 facility with energy-efficient cooling and security enhancements to support enterprise and hyperscale client. This segment also addresses the need to modernize aging infrastructure to handle evolving workloads, reduce energy consumption, and integrate newer technologies.

Rising Data Centre Applications in Healthcare & Government and Defense

Healthcare is a rapidly growing segment, driven by the rise of telemedicine, electronic health records (EHR), and AI-enabled diagnostics. Hospitals, research labs, and health tech firms require secure, compliant data centres that protect sensitive patient information under regulations like HIPAA. Companies partner with cloud and colocation providers to support data-intensive medical imaging and real-time patient monitoring.

Government and defense data centre demand is significant, focusing on security, sovereignty, and disaster recovery. Agencies require robust, highly secure infrastructure to manage sensitive data, national security applications, and public services. In October 2024, Northrop Grumman unveiled flying data centre to provide secure, real-time military intelligence and enhanced battlefield data processing capabilities. This sector increasingly adopts hybrid and edge computing models to enhance real-time intelligence and mission-critical operations.

Data Centre Market Regional Analysis

Europe & Asia Pacific to Drive Increased Data Centre Usage

Europe is more dominant in data centre presence, driven by robust regulatory concern for data privacy and sustainability. Germany, the Netherlands, and the United Kingdom are home to large colocation and hyperscale campuses. The growing deployment of hybrid cloud and edge data centres serves a wide range of industries from finance to manufacturing. Digital infrastructure modernisation also has strong investments from European governments that improve connectivity and drive demand for compliant, secure data centre solutions.

Asia Pacific is the region with the fastest growth in the global data centre market. Digital transformation in China, India, Singapore, and Australia is driving rapid demand for cloud, AI, and edge computing. Investments in data centres are led by local giants, geared towards increasing capacity and underpinning the internet user boom in the region. India’s capacity in the data centre will draw USD 20-25 billion in investments in the next five or six years. Initiatives by the government on digital economies and smart cities further drive growth.

Competitive Landscape

Key players in the data centre industry are using diverse strategies to respond to rising demand and competition from other operators. Principal strategies include geographic expansion, with operators establishing data centres in emerging markets and edge locations to reduce latency and provide data sovereignty. Industry players are incorporating sustainability into business operations by focusing on investing in renewable energy sources, energy-efficient cooling systems, and carbon-neutral operations.

They are adhering to ESG and regulatory obligations while leveraging partnerships and acquisitions to develop and grow capabilities to enhance service offerings and exploit strategic assets or technologies. Firms are focusing on hybrid and multi cloud enablement with offerings integrated seamlessly with major cloud providers to attract and enhance enterprise customers' experience. They are also offering modular and scalable infrastructure for delivery and capacity planning; prioritization of cybersecurity with planned investments in zero-trust architecture and AI security modelling and threat detection.

Hewlett Packard Enterprise Company

Founded in 2015, Hewlett Packard Enterprise (HPE) is headquartered in Houston, the United States. HPE is known for innovations in hybrid cloud, edge computing, and AI-driven infrastructure. Its HPE GreenLake platform has been a key achievement, offering flexible, on-demand IT services across various industries.

Cisco Systems Inc.

Cisco Systems, established in 1984 and based in San Jose, the United States, pioneered internet protocol-based networking and continues to innovate in cybersecurity, cloud infrastructure, and IoT. Cisco’s development of Webex and cutting-edge enterprise networking solutions underscores its technological leadership.

IBM Corporation

IBM, or International Business Machines Corporation, was founded in 1911 and is headquartered in Armonk, the United States. Known for its long-standing legacy in computing, IBM has shifted toward AI, cloud, and quantum computing. Key innovations include Watson AI and advancements in quantum systems and hybrid cloud platforms.

Sify Technologies Limited

Founded in 1995 and headquartered in Chennai, India, Sify Technologies is a leading digital services provider in India. It was among the first Indian companies to offer internet services and has since expanded into data centres, cloud, and managed services. Its integrated ICT ecosystem supports enterprise digital transformation across sectors.

Other players in the data centre market are Dell Technologies Inc, Fujitsu Limited, and Hitachi, Ltd, among others.

Key Features of the Data Centre Market Report

• Comprehensive quantitative analysis of global and regional data centre market size and growth.
• Detailed segmentation by infrastructure, type, solution, component, industry, and geography.
• Insightful forecasts through 2025 and beyond, highlighting emerging trends.
• Evaluation of key market drivers, challenges, and opportunities.
• Competitive landscape analysis with profiles of leading data centre providers.
• In-depth coverage of technological advancements and sustainability initiatives in data centres.

Why Choose This Research?

• Trusted insights from experienced industry analysts and market experts.
• Access to accurate, data-driven forecasts and market intelligence.
• Customized reports tailored to specific business needs and sectors.
• Comprehensive coverage across global markets with actionable strategies.