Data Center as a Service Market Size and Trends

Global data center as a service market is estimated to be valued at US$ 89.58 Bn in 2024 and is expected to reach US$ 289.91 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 18.3% from 2024 to 2031.

Data Center as a Service Market Key Factors

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Data center as a service market growth is driven by increased adoption of cloud-based services among enterprises globally. Evolution of technologies such as AI, ML, IoT and 5G networks boosts the need for scalable and efficient data storage. Enterprises are increasingly outsourcing their data management requirements to specialized service providers due to advantages such as low upfront costs, scalability, operational flexibility and faster deployment. Cloud service providers are making significant investments in building robust data center infrastructures to capture this growing opportunity. Rapid digital transformation among organizations can boost demand for on-demand access to data center infrastructure and resources in the near future.

Global Need for Scalability in IT Infrastructure

Global shift towards digitization of businesses has increased data generation and data usage. Every organization , irrespective of industry, relies heavily on data and IT infrastructure to power their digital operations. However, maintaining expensive on-premise data centers is a challenge for many organizations, especially small and medium sized businesses. The high costs associated with building, operating and scaling traditional data centers does not make economic sense for all companies. Businesses need to ensure scalability and flexibility of their IT infrastructure to quickly adapt to changing market conditions and business needs. Cloud-based data center services allow organizations to avoid huge upfront capital expenditure and obtain robust IT resources on demand. Companies can easily scale their computing power, storage and network bandwidth based on real-time usage requirements without worrying about expensive infrastructure upgrades. This delivers tremendous agility and flexibility for digital transformations. As more industries get disrupted through technology, the ability to flexibly scale IT infrastructure is a critical success factor. Data center as a service addresses this need perfectly by offering on-demand, pay-per-use resources to businesses of all sizes.

For instance, in October 2022, Intel, an American multinational corporation and technology company and Google Cloud, Google Cloud Platform (GCP) is a suite of cloud computing services offered by Google that provides a series of modular cloud services including computing, data storage, data analytics, and machine learning, alongside a set of management tools, jointly developed the E2000 chip, known as Mount Evans, that enhances data center security and efficiency by offloading data packaging from CPUs, thus, improving performance and security for cloud customers sharing resources.

Rising Significance of Optimal Resource Utilization

With growing climate change concerns, businesses are under increasing pressure to curb their carbon footprint and optimize resource consumption. Traditional on-premise data centers often exhibit suboptimal power and space utilization rates, typically falling below 20%. This leads to wastage of huge amounts of electricity as well as valuable office real estate space. Cloud-based mega data centers adopted by top service providers are designed with the highest efficiency standards. State-of-the-art cooling systems, power distribution architecture, and server virtualization enable cloud data centers to achieve a power usage effectiveness (PUE) ratio as low as 1.1, which translates to 90% more efficient compared to typical on-premises facilities. Furthermore, cloud providers are able to maximize space utilization through advanced rack design and workload consolidation across thousands of customers. Shared multi-tenant services allow businesses to utilize resources only when required without under-utilizing expensive on-premise assets. With growing focus on sustainability, data center as a service delivers unmatched efficiency benefits that are difficult to achieve through traditional models. This boosts adoption of cloud-based infrastructure solutions worldwide.