Burlingame, Aug. 13, 2024 (GLOBE NEWSWIRE) — The global Data Center as a Service marketvalued at $89.58 billion in 2024, is on a path of rapid expansion. Forecasts suggest that it will reach $289.91 billion by 2031, growing at a compound annual growth rate (CAGR) of 18.3% between 2024 and 2031, according to a recent report by Coherent Market Insights. The growing volume of data generated by companies across all industries has increased the need for scalable and flexible IT infrastructure. Data Center as a Service allows companies to provision infrastructure on demand as their computing power and storage requirements change over time. This eliminates the initial capital expenditure of setting up on-site data centers and reduces maintenance costs. This pay-as-you-go model has become very attractive for companies that want to focus more on their core business functions than on managing their IT infrastructure.
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Market dynamics:
Growing demand for cost-effective data center services and increasing usage of cloud-based services are the major factors driving the growth of the global data center as a service market. Data center as a service offers various benefits such as low upfront costs, reduced maintenance costs, increased scalability, and a pay-per-use model. Moreover, it allows organizations to focus on their core business activities instead of worrying about managing their IT infrastructure. Increasing dependence on cloud-based applications and big data analytics is further driving the demand for data center as a service.
Coverage of the Data Center as a Service market report
| Report coverage | Details |
| Market turnover in 2024 | 89.58 billion US dollars |
| Estimated value until 2031 | 289.91 billion US dollars |
| Growth rate | Expected growth of 18.3% on average |
| Historical data | 2019–2023 |
| Forecast period | 2024–2031 |
| Forecast units | Value (millions/billions USD) |
| Report coverage | Sales forecast, competitive environment, growth factors and trends |
| Segments covered | By infrastructure, by organisation size, by industry |
| Regions covered | North America, Europe, Asia-Pacific and Rest of World |
| Growth drivers | • Global need for scalability in IT infrastructure
• Increasing importance of optimal use of resources |
| Limitations and challenges | • Security threats associated with cloud adoption
• High initial investment requirement |
Market trends:
The growing popularity of colocation services and increased investments in data center construction are the key trends in the global data center as a service market. Colocation or colo services provide businesses with dedicated space, power, cooling, and physical security to house their servers and storage devices in the data center. It is a popular data center infrastructure outsourcing option for enterprises to reduce capital expenditure. Moreover, leading cloud service providers are investing heavily in the design and construction of mega data centers to meet the growing demand of enterprises. For example, in 2021, AWS announced plans to invest $5 billion in building data centers in 27 regions worldwide by 2030.
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Market opportunities:
Infrastructure as a Service (IaaS) allows companies to outsource their data center hardware infrastructure such as servers, storage, network components, and data center space. It enables on-demand provisioning of servers, storage, and other computing resources without upfront capital expenditure. Companies can avoid huge upfront capital expenditure in building their own data centers and instead opt for a pay-per-use basis. The use of IaaS is increasing because it offers companies flexibility, scalability, and faster time to market.
Managed services allow companies to outsource the management and maintenance of their data centers to third-party managed service providers. Various managed services are provided such as server management, storage management, database management, backup and disaster recovery services, and network management. Managed services help internal IT teams focus on more strategic initiatives rather than routine data center operations. This further reduces IT costs and risks for companies. The increasing complexity of on-premises data center infrastructure and the need for continuous optimization are driving the adoption of managed services.
Key insights for the market
Due to the increasing demand for scalable, flexible and economical data center solutions, the Data Center as a Service market is expected to grow at a CAGR of 18.3% during the forecast period 2024-2031.
On the basis of infrastructure, the server segment is expected to take a dominant position due to the increasing dependence of enterprises on virtualization. In the server space, the demand for virtual servers is expected to grow at a higher rate.
Based on company size, the SME segment is expected to dominate during the forecast period due to the need to optimize IT budgets.
On a vertical level, the retail segment is expected to dominate due to the growing e-commerce industry that requires scalable data center infrastructure.
At the regional level, North America is expected to hold a dominant position during the forecast period owing to early adoption of advanced data center solutions in this region.
The major players in the Data Center as a Service market include IBM Corporation, Microsoft Corporation, Hewlett Packard Enterprise Development LP and others. These players are focused on launching new services and partnerships to expand their market share.
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Current developments:
In June 2024, Cisco expanded its security footprint with the opening of the first security cloud data centers in Jakarta, Indonesia. This opening marks a new milestone in Cisco’s commitment to supporting the cybersecurity readiness of enterprises in the country. This is in response to the rapidly growing demand for security services across the country. This move enables enterprises in Indonesia, particularly public sector, financial services, and government enterprise customers, to better align with local data protection regulations and compliance requirements.
In August 2023, Digital Realty launched high-density data center colocation services in 28 markets across Asia Pacific, EMEA, and North America. The service can support up to 70 kilowatts of workload per rack.
Detailed segmentation:
By infrastructure:
By organization size:
By region:
North America:
Latin America:
- Brazil
- Argentina
- Mexico
- Rest of Latin America
Europe:
- Germany
- United Kingdom
- Spain
- France
- Italy
- Russia
- Rest of Europe
Asia-Pacific:
- China
- India
- Japan
- Australia
- South Korea
- ASEAN
- Rest of Asia-Pacific
Middle East:
- GCC countries
- Israel
- Rest of the Middle East
Africa:
- South Africa
- North Africa
- Central Africa
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Biography of the author:
Priya Pandey is a dynamic and passionate PR writer with over three years of experience in content writing and proofreading. Priya holds a Bachelor’s degree in Biotechnology and has a knack for making content engaging. Her diverse portfolio includes content and document writing for various industries including Food & Beverages, Information & Technology, Healthcare, Chemical & Materials, etc. Priya’s meticulous attention to detail and commitment to excellence make her an invaluable asset in the world of content creation and refinement. (LinkedIn- https://www.linkedin.com/in/priya-pandey-8417a8173/)
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