Data center market capitalization hits USD 283bn in 2027

Predictions say data center market capitalization to be $283bn in 2027, up from $30bn in 2017. At the same time, projections indicate that the global data center market will reach $283 billion by 2027 at a CAGR of 13%.

Why does the Data Center Market Continue to Grow?

The increasing demand for data storage and processing facilities drives the market. Moreover, an increase in cloud-based services has boosted the industry's growth.

Several factors contribute to this growth:

• Increasing use of data centers by enterprises and cloud companies

• The growing demand for remote offices and branch offices of large enterprises and small businesses alike

• Increased adoption of cloud services like SaaS (software as a service), PaaS (platform as a service), IaaS (infrastructure as a service), and other cloud-based applications

Cloud computing has been one of the primary drivers behind the growth of the global data center market over the past several years, said Jennifer Lambert-Slack, research vice president at IDC.

But she added that there are still plenty of opportunities for growth as companies move more workloads into their private clouds and use hybrid architectures consisting of public cloud services and remote infrastructure located on-premises or in other regional locations.

The data center market projects to grow over the next eight years

The International Data Corporation (IDC) report indicates The data center market will grow over the next eight years, with a compound annual growth rate (CAGR) of 6.8 percent from 2019 to 2026.

There are expectations for the total market for data centers to reach $74 billion by 2026, up from $55 billion in 2019. The largest markets will be in North America and Western Europe, with CAGRs of 8.2 percent and 7.4 percent, respectively, over the same period.

"The global data center market has been upward for several years now," said Daniela Stockmann, senior research analyst at IDC's Worldwide Quarterly Data Center System Tracker. "This growth is driven by the increasing demand for connectivity and computing power that comes with new technologies such as cloud computing and artificial intelligence."

The market intelligence firm forecasts revenue to climb from $8 billion in 2020 to $14 billion in 2028.

Green Data Center Size

Projections indicate that data center hardware will be the largest segment of the overall data center market, with a share of 36.3% by 2025-2027, followed by services at 34%. Software solutions will have a share of 24.1%, while colocation services will account for 18%.

Green data center companies are already emerging as a new sector within the industry as they focus on reducing their carbon footprint through sustainable energy usage and improving energy efficiency.

The green data center market is heading to grow at a CAGR of 8.1% from 2019 to 2027, with an estimated USD 6.69 billion in 2027.

One can attribute the growth to the rising demand for cloud computing services among enterprises, which is driving the adoption of green IT solutions in their infrastructure plans.

The following drives The green data center market:

• increasing demand for carbon-neutral or carbon-free data centers;

• increased awareness among enterprises regarding environmental issues;

• rising demand for sustainable products;

• increase in government regulations regarding energy efficiency standards;

• and growing interest among consumers toward socially responsible products and services.

Enterprises are adopting several green IT solutions as they help reduce energy consumption by lowering cooling costs and improving the overall efficiency of IT equipment.

Enterprises also look forward to using renewable energy resources such as solar power to power their data centers through onsite generation or offsite procurement through utility companies, increasing awareness about environmental impact.

Read more about: green data center companies

Conclusion

The global green data center market will reach USD 38.4 billion in 2017 and generate a revenue of USD 74.9 billion by 2027.

There are expectations for North America to dominate the world green data center market at a market share of around 42% by 2027, but the energy source problem has risen.

The Americas are on the path to becoming the highest-growing region in the upcoming years, owing to increasing awareness about green data centers and growing demand for renewable energy across several regional verticals.