Data Center Services Market

Data Center Services Market Size

The global data center services market was estimated at USD 24.8 billion in 2024. The market is expected to grow from USD 28.7 billion in 2025 to USD 102.5 billion in 2034, at a CAGR of 15.2%, according to latest report published by Global Market Insights Inc.

• The data center services market is expanding rapidly due to the increasing demand for AI, cloud computing, IoT, and edge workloads. As of 2024, there were over 1,100 hyperscale facilities globally, with over 10 GW of facilities in planning for 2025. The consumption of electricity of data centers is expected to increase by about 91 percent by 2030, and efficiency/sustainability and service optimization thus become very vital to the longevity of data centers.
  
• For instance, in March 2025, Schneider Electric collaborated with NVIDIA and ETAP to introduce a digital twin-based data center platform. The solution incorporates real-time thermal, electrical and mechanical analysis allowing operators to forecast facility performance, reduce time and optimize energy consumption. These partnerships illustrate how, as the complexity in large-scale, AI enabled data center environments grows, advanced simulation and monitoring technologies are taking more responsibility.
  
• With the increased adoption of renewable energy, data centers are investing in novel sourcing models to reduce carbon emissions. In 2024, corporations around the world entered into close to 70 GW of clean energy power purchase agreements, with data centers the largest portion. Some of the emerging tools include combining facilities with advanced nuclear forces and combining large-scale battery storage and connecting them to smart grids which can help operators to achieve a carbon-free 24/7 energy and maintain stable growth in capacity that is necessary to support artificial intelligence and cloud workloads requirements.
  
• The COVID-19 pandemic has hastened the transition to a cloud-first and hybrid IT strategy, which has significantly increased demand in data center services. Under lockdowns, physical IT processes have been limiting, and businesses have turned to colocation, hosted infrastructure, and virtual environments to stay operational. This established an enduring structural demand in remote hosting, digital resilience, and disaster recovery services which makes third-party data center operators imperative collaborators in the digital transformation programs of enterprises.
  
• North America is a world leader in data center services as a result of hyperscale growth, favorable tax environment and mature interconnection fragment. Northern Virginia alone has a total capacity of over 3 GW and vacancy rates below 1%, owing to unparalleled demand in colocation and cloud infrastructure. The region is also enhanced by strong federal and state-level renewable energy programs, under which operators can manage high-density workloads against ambitious sustainability and energy efficiency objectives.
  
• The Asia-Pacific data center services market is the fastest-growing, with this region benefitting from increased digitalization, sovereign AI strategies, and hyperscale cloud deployments. China, Japan, India, and other regions in Southeast Asia are putting up multi-hundred-megawatt campuses to service local and regional demand. In 2025, Microsoft invested USD 3 billion to increase AI-filled data centers in India, and Malaysia, Singapore, and Indonesia are still attracting global operators through strategic investments.
  

Data Center Services Market Trends

• Data center services are transforming with the deployment of artificial intelligence tools and digital twins that model power consumption, cooling, and workload demand. These technologies enable the operator to become informed about the maintenance that is required and enhance their energy efficiency and lead to cost reduction and improve the up time. They also streamline complex simulations and satisfy regulatory and sustainability requirements.
  
• In January 2025, Amazon Web Services (AWS) launched the implementation of AI-powered cooling systems in European datacenters. By simulating the airflow and energy consumption with digital twins, AWS saved up to 15% of cooling costs. That also increased the quality of equipment and made it possible to adjust during peak demand periods demonstrating how large-scale operators are transitioning to smarter infrastructure management.
  
• As the use of AI and GPU-intensive tasks increase, more flexible and scalable infrastructure has become necessary. Organizations are deploying hybrid cloud systems that integrate in-house management with cloud-based services to support peak loads. In April 2024, Google introduced a colocation service based on AI that uses machine learning to control tasks. This allows the clients to keep their performance and security and reduces their costs of scaling.
  
• The trend in the market is shifting toward modular with features such as liquid cooling, sustainability dashboards, renewable energy solutions, and AI-based security. Operators will provide varying service levels, from colocation through managed services, and to fully automated operations. These services are in most cases compliance tools, carbon tracking and automation that fulfill the expectations of customers and give providers a chance to sell more.
  
• The data centers services are also evolving to include other applications such as construction, manufacturing and smart-grid systems. The model now also provides testing of grid connections, renewable energy inputs and equipment performance before facilities are active. In November 2024, Equinix collaborated with Siemens to implement digital twin technology in new data center designs. This saved 20% of the commissioning time and was more efficient, showing how simulations are just not part of the design process.
  

Data Center Services Market Analysis

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Based on services, the market is divided into installation & integration services, training services, consulting services, maintenance and support, and others. The installation & integration services segment dominated the market accounting for around 38% in 2024 and is expected to grow at a CAGR of over 15% through 2034.

• The installation & integration services segment currently leads the data center services market because new hyperscale facilities, colocation centers, and the enterprise-level construction of IT infrastructure are impossible without this service in place. These services automate the installation of servers, networking, power and cooling systems and guarantee a smooth transition with existing architecture. Their leadership is supported by the growing need of hybrid cloud, AI-ready, and high-density computing, which necessitate accurate design and intricate deployment skills.
  
• For example, in February 2025, Equinix launched a significant new installation project in Mumbai, with AI-optimized power distribution units and liquid cooling systems being incorporated into its new hyperscale campus. The project demonstrated the power of advanced integration solutions and how integration solutions could assist operators in faster commissioning, energy efficiency, and minimal disruption as customers migrate workloads.
  
• Moreover, the growth of cloud computing, especially in enterprises, government-led digital infrastructure projects and the rise of hyperscale data centers globally are driving the need to utilize professional installation services. This market segment is further enhanced by increasing concerns in cybersecurity integration and use of modular deployments, sustainability architecture-driven retrofits that gain deployment momentum and enable customers to achieve compliance and business objectives.
  
• The consulting services segment is expected to grow at a CAGR of over 17% due to the rising complexity of hybrid cloud, AI, and edge deployments. Companies are increasingly using consultants to plan their capacity, regulatory compliance, sustainability strategies and digital transformation roadmap. The expansion of this segment is interconnected with the need to seek professional advice on the optimization of the infrastructure performance, resilience, and cost-efficiency.
  

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Based on data center size, the market is categorized into small data centers, medium data centers, and large data centers. The large data centers segment dominates the market accounting for around 45% share in 2024, and the segment is expected to grow at a CAGR of over 15.3% from 2025-2034.

• Large data centers currently lead the data center services market as they are the backbone of hyperscale and colocation deployments. The facilities offer the best capacity, sophisticated cooling, and a high interconnect, allowing flexible deployment of AI, cloud, and enterprise digital transformation. Their power is enhanced by the increased need of scalable, energy-efficient infrastructure and capability to support multi-tenant workloads across industries.
  
• For example, in April 2025, Microsoft launched an expansion of a new campus of large-scale AI-optimized data centers in Sweden, incorporating the use of liquid cooling and renewability-powered grids to support generative AI loads. This project will focus on how big data centers are being engineered to be more efficient, resilient, and sustainable to rapidly scale, in addition to satisfying regulatory and environmental obligations.
  
• Moreover, the shift of enterprises to cloud-based systems, the rise of AI-powered workloads, and government-sponsored programs on digital infrastructure are contributing to the growth of large-scale implementations. Their competitive advantage is enhanced by their economies of scale, modularity innovations, and long-term cost advantages, which position them as the desired preference to major hyperscale’s, telecoms, and global service providers.
  
• The small data center segment is expected to grow at the highest CAGR 17%, driven by edge computing, IoT and 5G applications are the drivers. These facilities will provide local processing and support low latency performance, assisting smart cities and autonomous vehicles. This trend follows the concentration of large data centers, with the industry shifting towards a hybrid approach balancing centralized hyperscale services with distributed edge infrastructure.
  

Based on application, the data center services market is segmented into BFSI, colocation, energy, government, healthcare, manufacturing, IT & telecom, and others. IT & telecom segment is expected to dominate the market with around 36% share due to rising cloud adoption, 5G expansion, and AI-driven workloads, requiring scalable, secure, and high-performance data center infrastructure globally.

• The IT and telecom sector continues to lead the data center services industry as the operators scale up cloud platforms, hyperscalers and edge data centers to complement digital migration. The expansion of 5G, fast connectivity, and need in AI/ML-based tasks upsurge the pace of the utilization of sturdy data center service remedies.
  
• In addition, telecom providers are investing heavily in hybrid and multi-cloud deployment to increase agility, decrease latency and secure interconnecting across regions. This involves high-end integration and managed services, and high-bandwidth colocation spaces to streamline global connectivity.
  
• For instance, in June 2024, Equinix announced an expansion of USD 390 million in Asia-Pacific to construct new hyperscale data centres to meet the escalating demand by telecom operators and other global IT enterprises in order to provide enhanced interconnection and low-latency services.
  
• The healthcare segment will see the most tremendous CAGR of around 18.6% owing to heightening of digitalization of medical records, AI diagnostics and growth of telehealth. Increased regulatory compliance, and secure, high-performance infrastructure are also encouraging investments in healthcare-specific data center services globally.
  

Based on deployment model, the market is divided into On-premises, cloud, and hybrid. On-Premise dominated the market.

• The on-premise segment dominates the data center services market as enterprises continue to prioritize full control, customization, and security of their IT infrastructure. Industries such as banking, healthcare, government, and defense often deal with sensitive data requiring strict compliance with regulations, which makes on-premise facilities the preferred choice. These deployments provide organizations with higher reliability, consistent performance, and direct oversight of their hardware and software systems that cloud-only environments cannot fully guarantee.
  
• In addition, large corporations with significant IT budgets invest heavily in on-premises data centers to integrate advanced technologies, such as AI-powered monitoring and cybersecurity tools, within their facilities. For example, in 2024, major financial institutions expanded on-premises data centers to enhance risk management and data protection, reinforcing the segment’s continued dominance in the market.
  
• Furthermore, the hybrid segment is expected to experience high growth owing to its ability to combine the security and control of on-premise systems with the flexibility and scalability of cloud infrastructure. This deployment model allows enterprises to keep mission-critical and sensitive workloads in private environments while leveraging the cloud for innovation, data analytics, and disaster recovery. The growing need for cost optimization, compliance adherence, and workload portability makes hybrid deployment an attractive choice across industries.
  

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North America dominated the global data center services market with a market share of 37% in 2024.

• U.S. dominated the North America market in 2024 with around 85% share and generated USD 7.7 billion in revenue. Its leadership is attributed to the prevalence of hyperscale cloud providers, sophisticated digital infrastructure, and enterprise adoption of hybrid IT solutions, which form a holistic ecosystem that supports installations, integration, and managed services.
  
• Investments in AI, edge computing, and digital twin technologies are catalyzing adaptations in how industries execute tasks. The proliferation of 5G networks, cloud migration, and cybersecurity are some of the factors that are making companies look to secure, scalable, and high performances to support data centers in general. This is increasing the vendor opportunity among service providers who offer the services of installation, consultation, and support.
  
• For example, in June 2024, Microsoft pledged a USD 3.2B course of investment in the expansion of data center operations in the U.S.  The expansion includes AI-ready infrastructure, sustainable operations, and cloud-enabled facilities to accommodate the rising enterprise demands. These investments indicate the market is developing around the shape of big cloud providers offering energy-efficient and AI-centered data-center solutions.
  
• Canada is projected to continue its growth at a CAGR of over 15%, until the year 2034, due to its emphasis on renewable energy sources and the development of digital infrastructure. Canada is emerging as a primary location of green data centers, in addition to the U.S. leadership in the region, due to the increasing investments in cloud and colocation centers and availability of clean energy sources.
  

The data center services market in Germany is expected to experience significant and promising growth from 2025-2034.

• Europe accounts for around 28% of the data center services industry in 2024 and is expected to grow at a CAGR of over 15% owing to Germany's strong digital economy, high demand for cloud and colocation services, and the presence of major hyperscale operators. The country’s industrial strength and widespread digital adoption create significant opportunities for service providers.
  
• Germany is also gaining an advantage as it is primarily driven by huge hyperscale investments by companies like Amazon Web Services, Microsoft Azure, and Google Cloud.  Players like Deutsche Telekom and the NTT Global Data Centers are also expanding their facility to regional levels. The expansions have been done to respond to the increasing demand in the hybrid cloud and AI needs, and secure hosting, and Germany becomes the major data center destination in Europe.
  
• Moreover, stringent laws on data sovereignty, cybersecurity, and sustainability make German companies embrace the modern providers of data center services to guarantee compliance and deliverability. The government’s interest in green energy and carbon neutrality is another factor portraying the use of energy-efficient infrastructure. This enables the expansion of green colocation and managed services in major cities such as Frankfurt, Berlin, and Munich.
  
• In November 2023, Equinix introduced an investment of USD 104 million to increase its data centers in Frankfurt. The growth is centered in interconnections of high capacity and renewable energy activities. All these moves and trends solidify Germany as the European data center leader as more businesses select German providers to ensure sustainable, reliable, secure, and compliant European digital infrastructure.
  
• Moreover, the European data center services market in the UK is projected to grow at the highest rate during the forecast period. This growth is fueled by a rise in cloud adoption, growth in the fintech industry and government investment into digitalization. Collaborations with hyperscale providers, universities, and businesses are leading to innovation.
  

The data center services industry in China is expected to experience strong growth from 2025-2034.

• Asia Pacific accounts for over 31% of the global data center services market in 2024 and is the fastest-growing region with a CAGR of around 17% owing to large digital ecosystem, strong government support for digital infrastructure, and major players like Alibaba Cloud, Tencent Cloud, and Huawei Cloud. This growth is driven by rapid cloud adoption, the expansion of e-commerce, and 5G rollouts.
  
• The country is enhanced by significant colocation and hyperscale data center investments in key cities of Beijing, Shanghai, Guangzhou, and Shenzhen. The growing adoption of AI applications, fintech, and smart city initiatives contribute to the expansion of the usage of secure, scalable, and high-performance data center services. The domestic providers are growing rapidly, which means that China is the face of the data-driven economy in Asia-Pacific.
  
• Strict controls on data sovereignty, cybersecurity, and green computing would also prompt businesses to use local data center providers. Government initiatives such as the East-to-West Computing Project and the New Infrastructure Plan are accelerating construction of mega-scale renewable-powered facilities. These initiatives have transformed China into the biggest and most developed market of data center services in the region.
  
• For example, in March 2025, VNET Group, a major Chinese data center operator, issued convertible bonds to finance wholesale internet data center construction worth USD 430 million to meet the increased AI and cloud infrastructure requirements.
  
• India is the fastest-growing economy leading and is projected to grow the fastest in the Asia-Pacific data center services market up to 2034. The growth of the country is driven by the rising digitalization, state initiatives to localize information and border-less affordability in cloud infrastructure. As foreign and domestic firms are experiencing growth in Indian cities such as Mumbai, Hyderabad and Bangalore, the country is becoming an important growth market with China leading the region.
  

The market in Brazil is expected to experience significant and promising growth from 2025-2034.

• Latin America holds around 3% of the global data center services market and is growing steadily at a CAGR of around 16%. This growth is driven by renewable energy adoption, EV manufacturing expansion, and government-led digitalization initiatives. Increasing partnerships with global cloud providers and local investments in digital infrastructure are further enhancing the region’s demand for advanced data center and colocation services.
  
• Brazil is the leader in the Latin America data centre services market, with its growing digital economy, widespread cloud adoption, and positive regulatory environment. Excellent development in financial technology, e-commerce, and telecommunication sector has led to an intense need of hyperscale and colocation services. Subsequently, high customer base with the ever-growing demands of low-latency services, Brazil has become the main data hosting and cloud operation hub in the region.
  
• In addition, government policies that encourage renewable energy and data sovereignty as well as the growing local R&D collaborations are driving sustainable data center demand in Brazil. They are gaining momentum due to investments by major international players in hyperscale and colocation facilities. This powerful ecosystem infrastructures supports cloud computing, AI, and enterprise digitalization, and makes Brazil the Latin American core innovation center in terms of its data center market.
  
• For example, in April 2025, Equinix launched the third data center in Rio de Janeiro called RJ3 and was launched by spending USD 94 million. The facility has 560 racks in 1,465 sqm of colocation space. Powered by Cool Array technology it is able to support dense, air-cooled workloads and provides connectivity through a redundant fiber ring to RJ2.
  
• The Mexico market is growing at the fastest rate in Latin America due to the rapid growth of the automotive and manufacturing industries, increased cloud penetration, and a strong government push towards digitalization. The need to meet high-demand advanced, scale, and sustainable data center infrastructure is being driven by strong foreign investments and renewable energy projects.
  

The data center services market in UAE is expected to experience significant and promising growth from 2025-2034.

• The Middle East and Africa (MEA) combined represent about 2% share of the data center services industry in 2024, experiencing steady growth due to the surge in investments in digital infrastructure, renewable energy projects and government efforts to encourage cloud deployment and energy-efficient operation. The rising information industrialization, the rising acceptance of AI and IoT solutions and the expanding IT needs among corporates are some of the other factors driving demand in improved data center services across various industries.
  
• The UAE is leading the development of the data center services market in MEA because it has been investing a lot in smart cities, cloud computing, and renewables-based infrastructure. Investments in hyperscale and edge data centers, as well as collaboration with the global technology providers, enhance the implementation of performance-filled and secure data center solutions on the mass-scale level. Digitalization of industries is promoted by such governmental programs as the UAE AI Strategy and the Smart Dubai initiative.
  
• The Saudi Arabian market is the fastest growing in the region, as it is a part of the Vision 2030 that prioritizes renewable energy, sustainability, and digital technologies. Major investment into the expansion of hyperscale, colocation and cloud computing facilities, coupled with initiatives to support electric vehicles, energy storage and industrial digitalization, are translating into rapid rising rates of utilization of cutting-edge data center services in the automotive, utility and enterprise service segments.
  

Data Center Services Market Share

• The top 7 companies in the data center services industry are Equinix, Digital Realty, NTT Data, Cisco, IBM, Schneider Electric, and Siemens contributed around 48% of the market in 2024.
  
• Companies prioritize continuous innovation by integrating advanced technologies such as AI, automation, and edge computing to optimize workloads, improve energy efficiency, and reduce latency. Emphasis is placed on developing modular and software-defined data center solutions that provide flexibility, scalability, and resilience to support diverse enterprise and cloud requirements.
  
• Market players expand cloud-based and managed services to enable global enterprises to scale infrastructure rapidly while ensuring compliance, security, and cost optimization. Hybrid and multi-cloud adoption is accelerating, driving demand for colocation, storage, and disaster recovery services. Partnerships with hyperscalers, telecom providers, and cybersecurity firms strengthen value propositions and expand service ecosystems.
  
• Regional expansion remains a key focus, with providers tailoring services to meet local regulatory requirements, power availability, and connectivity needs. Emerging markets in Asia Pacific, Latin America, and Africa are attracting heavy investment, as players set up new facilities. Customer-centric offerings such as AI-driven monitoring, sustainable green data centers, and flexible service models further enhance adoption and competitiveness.
  

Data Center Services Market Companies

Major players operating in the Data center services industry are:

• ABB
• Cisco Systems
• Dell Inc
• Digital Realty
• Eaton
• Equinix
• IBM
• NTT Data
• Schneider Electric
• Siemens
  
• Schneider Electric

Schneider Electric leads the data center services market with a share of 10.7% in 2024 and offers sustainability, energy efficiency and digitalization in services offered in data centers. The company employs the strategy of EcoStruxure, a platform which brings together power, cooling and IT management to support resilience operations. Schneider is an innovator in modular and prefabricated data centers that can be installed in very short time. With emphasis on renewable energy integration, smart monitoring, and predictive maintenance, it can help businesses to meet their operational efficiency and sustainability objectives, as well as enable it to broaden its reach across the world.

• NTT Data

NTT Data focuses on integrated data center solutions, combining colocation, cloud services, and managed IT infrastructure. The strategy emphasizes hybrid IT, AI-driven optimization, and advanced security services. NTT leverages its global network to serve enterprises across sectors, invests in energy-efficient and sustainable operations, and strengthens partnerships with cloud and telecom providers.

• Cisco

Cisco focuses on delivering integrated networking, security, and automation solutions tailored for modern data centers. Its strategy emphasizes hybrid cloud enablement, software-defined networking, and AI-driven operations to enhance efficiency and resilience. Cisco invests heavily in edge computing and zero-trust security frameworks, positioning itself as a key enabler of secure, scalable, and agile infrastructure for enterprises transitioning toward multi-cloud and distributed IT environments

Data Center Services Industry News

• In June 2024, Cisco expanded its security footprint with the launch of the first security cloud data centers in Jakarta, Indonesia. This launch marks a new milestone in Cisco’s commitment to supporting businesses’ cyber security readiness in the country. This is in response to the fast-growing demand for security services across the country. The move allows businesses in Indonesia, especially the public sector, financial services, and state-owned enterprise customers, to align closer to local data regulations and compliance requirements.
  
• In May 2024, Cologix, a leading network-neutral interconnection and hyperscale edge data center provider in North America, launched its fourth and largest data center in Columbus, Ohio. This milestone reinforces Cologix’s commitment to meeting the surging demand for colocation and interconnection services in the region.
  
• In May 2024, Microsoft unveiled its first-ever data center region in Mexico, named the Mexico Central region. The launch provides global organizations with local access to scalable, resilient, and highly available cloud services. It underscores Microsoft’s commitment to driving digital transformation and sustainable innovation in Mexico, supporting companies such as Binaria ID and DocSolutions.
  
• In February 2024, MOD Mission Critical (MOD), a global infrastructure Platform-as-a-Service provider, expanded its partnership with 365 Data Centers (365). Through this collaboration, MOD now delivers fractional colocation and connectivity solutions, giving clients access to 365’s network-centric data centers in 20 U.S. markets, as well as more than 125 additional points of presence nationwide.
  
• In March 2024, Eaton, a leader in intelligent power management, introduced its SmartRack modular data center solutions in North America. Designed for rapid deployment, these modular systems address the growing needs of edge computing, machine learning, and AI. They are adaptable for diverse environments, including enterprise data centers, colocation facilities, manufacturing plants, and warehouses.
  
• In September 2023, Equinix acquired a European data center service provider to strengthen its global footprint through mergers and acquisitions.
  

The data center services market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($Bn) from 2021 to 2034, for the following segments:

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Market, By Service

• Installation & integration services
• Training services
• Consulting services
• Maintenance and support
• Others

Market, By Data Center Size

• Small data centers
• Medium data centers
• Large data centers

Market, By Deployment Mode

• On-Premise
• Cloud
• Hybrid

Market, By Tier Type

• Tier 1
• Tier 2
• Tier 3
• Tier 4

Market, By Application

• BFSI
• Colocation
• Energy
• Government
• Healthcare
• Manufacturing
• IT & telecom
• Others

The above information is provided for the following regions and countries:

• North America
  • US
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Philippines
  • Indonesia
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • South Africa
  • Saudi Arabia
  • UAE