Data Center Infrastructure Market Size, Cloud Computing Expansion and Colocation Demand, Forecast 2026–2034

Data Center Infrastructure Market Overview By Fortune Business Insights

Market Summary

According to Fortune Business Insights: The global data center infrastructure market was valued at USD 94.56 billion in 2019 and is projected to reach USD 142.31 billion by 2027, exhibiting a CAGR of 5.5% over the forecast period. North America led the global market with a dominant share of 37.9% in 2019, valued at USD 35.84 billion.

The market's growth is underpinned by the increasing global demand for efficient IT technologies and the economic advantages offered by modern, consolidated connectivity solutions. The rapid proliferation of cloud computing and big data has made it simpler and more cost-effective for enterprises to migrate workloads to self-contained data centers. Government initiatives to foster digital growth are also providing strong tailwinds — for example, Thailand's Cabinet allocated USD 146.6 million in May 2020 specifically for cloud and data center development to accelerate its regional digital economy.

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Key Market Trend: Rise of Hyperscale Data Centers

The shift toward cloud-based operations is fueling strong demand for hyperscale data centers — large-scale facilities capable of delivering vastly greater data and server resources than conventional centers. According to a 2020 Cisco report, hyperscale data center network traffic was projected to quadruple and account for 55% of all data center traffic by 2021. In response to this demand, NTT Communications Corporation launched a new hyperscale data center in Mumbai, India — a 38MW, 375,000 square-foot facility capable of hosting 5,000 racks. The modularity, redundancy, and cost-effectiveness of hyperscale facilities make them a defining trend in the global market going forward.

Key Growth Drivers

Rising Investments in Modular and Traditional Infrastructure: The expanding base of SMEs and startups adopting network infrastructure solutions is driving demand for both traditional and modular data center deployments. Key industry players are committing significant capital to meet enterprise needs. In November 2020, Amazon Web Services (AWS) invested USD 2.8 billion to launch a new cloud region in Telangana, India. In the same month, Microsoft announced investments to advance Sweden's digital transformation with a new data center planned for 2021. Equinix, meanwhile, completed a USD 161 million acquisition of two Mumbai-based data centers from GPX Global Systems in August 2020, reinforcing its Asia Pacific footprint.

Remote Work and COVID-19 Acceleration: The pandemic fundamentally elevated the role of data center infrastructure by forcing organizations across BFSI, IT, telecommunications, and retail sectors to transition to remote operations. This shift created surging demand for cloud-based solutions, communication infrastructure, and networking capacity. Companies such as Google, Oracle, and IBM came to rely even more heavily on data center solutions for storage and daily operations, contributing to accelerated market investment.

Restraining Factors

Two primary challenges temper market growth. First, data centers require high initial capital expenditure and typically take two to three years to complete construction, making it difficult for businesses to manage funds and maintain competitiveness during the build period. Second, energy consumption is a significant concern — the Engineering Department of Stanford University reported that US data center power usage increased by 36%, placing a strain on both operational costs and sustainability goals. These factors represent ongoing headwinds for operators and investors alike.

Market Segmentation

By Component: The market is divided into solutions and services. The solutions segment holds the largest share, driven by widespread adoption among SMEs and large enterprises to manage facility operations, improve planning, and enhance data center efficiency. Within solutions, the thermal module sub-segment leads in share — reflecting strong demand for thermal management tools to handle server-generated heat. The power module sub-segment is projected to grow at the highest CAGR. The services segment overall is expected to grow at the fastest CAGR, propelled by the increasing reliance on consulting, integration, and managed services across industry verticals.

Regional Insights

North America maintains market leadership, supported by the rapid adoption of cloud solutions for remote work, strong SME and startup activity in the US and Canada, and advancing public sector digitization. According to a CBRE Group report, the total capacity of US primary data centers grew by 200 megawatts — an 8% increase — in 2019 alone.

Europe has seen robust growth in data center infrastructure adoption, converting older, legacy facilities into modern, energy-efficient operations, supported by stronger energy infrastructure investments across the region.

Asia Pacific is forecast to grow at the highest CAGR during the forecast period. The region benefits from rapid consumer and business digitalization, with China and India emerging as key growth hubs driven by the expanding SMB sector's demand for mega data center facilities and additional equipment.

Middle East, Africa, and Latin America are experiencing accelerating growth as businesses of all sizes migrate data management and operations to the cloud. Regional data security laws are also compelling organizations to maintain data in localized data centers, further stimulating infrastructure investment.

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Competitive Landscape

The market features prominent players including IBM Corporation, Schneider Electric SE, Vertiv Group Corp., Hewlett Packard Enterprise, Johnson Controls, Eaton, Siemens, ABB, Huawei Technologies, and Delta Electronics, among others. These companies are pursuing innovation and strategic partnerships to meet evolving enterprise demands. In February 2020, Huawei launched its Intelligent Data Center Service Solution to help organizations build high-reliability, energy-efficient green data centers. In December 2020, Lenovo Data Center Group introduced an end-to-end data management product suite, including fiber channel switches and all-flash storage arrays focused on enhanced data security.