Data Center Transformation Market by Service Type (Consolidation Services, Optimization Services, Automation Services, and Infrastructure Management Services), Tier Type, Data Center Type, Data Center Size and Region - Global Forecast to 2028

Data Center Transformation Market by Service Type (Consolidation Services, Optimization Services, Automation Services, and Infrastructure Management Services), Tier Type, Data Center Type, Data Center Size and Region - Global Forecast to 2028

The market size of the data center transformation market is projected to grow from USD 11.5 billion in 2023 to USD 18.9 billion by 2028 at a CAGR of 10.5% during the forecast period. The rise in cloud adoption and hybridization drives the growth of the data center transformation market.

“As per tier type, the tier 3 segment holds the highest CAGR during the forecast period.”

The data center transformation market by tier type bifurcates into tier 1, tier 2, tier 3, and tier 4. During the forecast period, 2023-2028, the tier 3 segment holds the highest CAGR. Tier 3 data centers provide advanced functionalities that large companies widely utilize. As mentioned by Uptime Institute, tier 3 data centers have higher uptime, a guaranteed 99.982% availability, and experience a low downtime of only 1.56 hours per year. These data centers are characterized by the N+1 redundancy level, which guarantees the availability of a minimum of one backup equipment in case of system failure. Tier 3 data centers can also provide at least 72-hour power outage protection.

“As per vertical, the healthcare vertical holds the highest CAGR during the forecast period.”

The verticals studied in the report are IT & telecom, BFSI, healthcare, manufacturing, government & defense, transportation, retail, energy & utilities, and other verticals (education and media & entertainment). During the forecast period, 2023-2028, the healthcare vertical segment holds the highest CAGR. The healthcare industry has witnessed an exponential increase in the generation of biomedical data. The healthcare industry needs to expand its data center infrastructure to support this increasing data and accommodate system upgrades. The shift from paper-based medical records to electronic health records (EHRs) requires robust data center infrastructure to securely store and manage patient data, ensuring accessibility to authorized healthcare providers. Adopting telemedicine and remote patient monitoring solutions relies on data centers to facilitate real-time video consultations, data collection, and analysis, offering patients more accessible and efficient healthcare services. Healthcare organizations increasingly leverage data analytics and big data for medical research, patient outcomes analysis, and population health management. Data center transformation is essential to support these data-intensive activities.

“As per region, Europe holds the second-largest market share during the forecast period.”

The data center transformation market includes an analysis of five regions. Europe holds the second-largest market share in 2023 and will have similar dominance over the forecast period. Europe has diverse business needs, as several large retailers and manufacturing companies demand robust and scalable IT infrastructure solutions. The region has always been a challenging market for cloud providers due to the stringent regulations and security standards regarding user data privacy. In Europe, there is a growing demand for hyperscale data center facilities and data center colocation owing to the availability of green power and favorable climatic conditions. As per findings, the Netherlands has the most advanced hyperscale data center facilities and hosts online services of major cloud providers.

The breakup of the profiles of the primary respondents is below:

By Company: Tier I: 30%, Tier II: 45%, and Tier III: 25%

By Designation: C-Level Executives: 50%, Director Level: 35%, and Others: 15%

By Region: North America: 50%, Asia Pacific: 15%, Europe: 30%, Rest of World: 5%

Note: Others include sales managers, marketing managers, and product managers

Note: The rest of the World consists of the Middle East & Africa, and Latin America

Note: Tier 1 companies have revenues of more than USD 100 million; tier 2 companies’ revenue ranges from USD 10 million to USD 100 million; and tier 3 companies’ revenue is less than 10 million

Source: Secondary Literature, Expert Interviews, and MarketsandMarkets Analysis

The key technology vendors in the market include Dell (US), Microsoft (US), IBM (US), Schneider Electric (France), Cisco (US), NTT (Japan), HCLTech (India), Accenture (Ireland), Cognizant (India), Google (US), Wipro (India), Atos (France), TCS (India), Hitachi (Japan), NetApp (US), Mindteck (India), Bytes Technology Group (UK), General Datatech (US), Insight Enterprises (US), Tech Mahindra (India), NETSCOUT (US), Dyntek (US), Softchoice (Canada), InKnowTech (India), Rahi Systems (US), Blue Mantis (UK), GreenField Software (India), Hyperview (Canada), FlexiScale (UK), LiquidStack (US), RackBank Datacenters (India), and Vapor IO (US). Most key players have adopted partnerships and product developments to cater to the demand for data center transformation.

Research coverage:

The market study covers the data center transformation market across segments. The study aims to estimate the market size and the growth potential of the data center transformation market across different market segments, including service type, tier type, data center type, data center size, verticals, and region analysis. It includes an in-depth competitive intelligence analysis of the key players in the market, company profiles, observations related to products, services, business offerings, recent developments, and key market strategies.

Reasons to buy this report:

The report provides insights on the following pointers:

Analysis of key drivers (Leveraging digital transformation to drive data center evolution, Indispensable requirements to improve data center uptime and energy efficiency, Proliferation of data center colocation facilities globally, Rising necessity to tackle significant network congestion within data centers, Increasing cloud adoption and hybridization, Rapid data explosion drives the market growth), restraints (Data security and privacy concerns, Complexity related to transformation), opportunities (Rise in number of data center facilities, Data center consolidation and optimization to drive the demand for data center transformation services, Growing demand for AI and Automation)and challenges (Downtime and disruption challenge, Need to partner with other vendors for data center expertise) influencing the growth of the data center transformation market

Product Development/Innovation: Detailed insights on the latest technologies in the data center transformation market

Market Development: In-depth information about lucrative markets – the report analyses the data center transformation market across various regions.

Market Diversification: Comprehensive information about new products & services, recent developments, untapped geographies, and investments in the data center transformation market.

Competitive Assessment: Detailed assessment of growth strategies, market shares, and service offerings of leading players. The critical technology vendors in the market include Google (US), Microsoft (US), IBM (US), Schneider Electric (France), and TCS (India), among others, in the data center transformation market.