The global data center market was valued at USD 347.60 billion in 2024 and is expected to reach USD 652.01 billion by 2030, expanding at a robust compound annual growth rate (CAGR) of 11.2% from 2025 to 2030. This growth is primarily driven by the exponential surge in data generation across various sectors, fueled by widespread digital transformation initiatives and the increasing adoption of advanced technologies such as cloud computing, artificial intelligence (AI), machine learning (ML), and the Internet of Things (IoT).

As organizations generate and process vast volumes of data, the demand for scalable, secure, and energy-efficient data center infrastructure has intensified. Enterprises are seeking agile and resilient IT architectures to support evolving business needs and digital services. This has led to the rapid expansion of data center capacity worldwide, with a particular focus on hyperscale and colocation facilities.

Hyperscale data center operators—including major players such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud—are continuously scaling their infrastructure to meet global demands for cloud storage, computing power, and data processing. These tech giants are making substantial investments in constructing new data centers and upgrading existing ones to ensure seamless service delivery, latency reduction, and improved data security.

Simultaneously, the colocation segment is gaining momentum as businesses pursue cost-effective solutions to manage IT infrastructure. Colocation centers offer shared facilities equipped with high-speed connectivity, advanced cooling systems, and robust physical and cyber security. These benefits allow companies—especially small and medium enterprises—to scale their operations flexibly without the high capital expenditure required to build and maintain in-house data centers.

Another major trend accelerating market growth is the rise of edge computing. As the number of IoT devices and real-time applications grows, there is an increasing need for decentralized computing infrastructure. Edge data centers, located closer to end-users and data sources, provide reduced latency and faster response times—critical for applications in sectors such as autonomous vehicles, remote healthcare, industrial automation, and smart cities.

Key Market Trends & Insights

• In 2024, North America dominated the global data center market with a share of over 40.0%, propelled by the widespread adoption of cloud services, AI-powered applications, and big data analytics across industries.
• The United States data center market is anticipated to grow at a CAGR of 10.7% between 2025 and 2030, driven by continued digital innovation, enterprise cloud adoption, and the expansion of e-commerce and fintech platforms.
• On the basis of components, the hardware segment accounted for the largest market share of more than 67.0% in 2024. The surge in online content consumption, social networking, digital transactions, and IoT connectivity has significantly boosted demand for high-capacity, high-performance hardware.
• Within the hardware category, the server segment emerged as the market leader, contributing over 34.0% to revenue in 2024. Modern servers are being equipped with enhanced processing power, memory, and storage efficiency, all of which are crucial to supporting next-generation computing needs.
• Among software solutions, the virtualization segment held a dominant share of nearly 18.0% in 2024. Virtualization allows data centers to maximize hardware utilization by enabling multiple virtual machines (VMs) to operate on a single physical server, reducing costs and increasing operational flexibility.

Order a free sample PDF of the Data Center Market Intelligence Study, published by Grand View Research.

Market Size & Forecast

• 2024 Market Size: USD 347.60 Billion
• 2030 Projected Market Size: USD 652.01 Billion
• CAGR (2025-2030): 11.2%
• North America: Largest market in 2024
• Asia Pacific: Fastest growing market

Key Companies & Market Share Insights

Key players operating in the data center industry are Amazon Web Services (AWS), Inc. Microsoft, Google Cloud, Alibaba Cloud, and Equinix, Inc. The companies are focusing on various strategic initiatives, including new product development, partnerships & collaborations, and agreements to gain a competitive advantage over their rivals. The following are some instances of such initiatives.

• In February 2025, Alibaba Cloud, the digital technology arm of Alibaba Group, opened its second data center in Thailand to meet the growing demand for cloud computing services, particularly for generative AI applications. The new facility enhances local capacity and aligns with the Thai government's efforts to promote digital innovation and sustainable technology. Offering a range of services including elastic computing, storage, databases, security, networking, data analytics, and AI solutions, the data center aims to address industry-specific challenges.
• In December 2024, Amazon Web Services (AWS) introduced redesigned data center infrastructure to accommodate the growing demands of artificial intelligence (AI) and sustainability.  The updates features advancements in liquid cooling, power distribution, and rack design, enabling a sixfold increase in rack power density over the next two years. AWS stated that these enhancements aims to deliver a 12% boost in compute power per site, improve energy efficiency, and enhance system availability.
• In May 2024, Equinix, Inc. launched its first two data centers in Malaysia, with the International Business Exchange (IBX) facilities now operational in Johor and Kuala Lumpur. The facilities are intended to cater to Equinix Inc.'s customers in Malaysia while enhancing regional connectivity.

Key Players

• Alibaba Cloud
• Amazon Web Services, Inc.
• AT&T Intellectual Property
• Lumen Technologies (CenturyLink)
• China Telecom Americas, Inc.
• CoreSite
• CyrusOne
• Digital Realty
• Equinix, Inc.
• Google Cloud
• IBM Corporation
• Microsoft
• NTT Communications Corporation
• Oracle
• Tencent Cloud

Browse Horizon Databook on Global Data Center Market Size & Outlook

Conclusion

The global data center market is undergoing rapid expansion, driven by the growing digital economy, technological advancements, and the ever-increasing demand for data storage, computing power, and connectivity. Hyperscale and colocation facilities are at the forefront of this transformation, offering scalable and secure infrastructure that supports cloud computing, AI workloads, and real-time applications. Edge computing is further reshaping the landscape by bringing processing capabilities closer to data sources, enabling faster and more efficient services across various industries.

As the market continues to evolve, investment in energy-efficient hardware, software virtualization, and regional data center development will be critical to meeting future demands. Companies that adopt flexible, sustainable, and innovation-driven data infrastructure strategies will be best positioned to capitalize on the tremendous growth opportunities in the data center space over the coming years.