Data Center Transformation Market Innovations: Embracing AI and Automation
The global data center transformation market size is estimated to reach USD 28.62 billion by 2030, registering to grow at a CAGR of 15.7% from 2025 to 2030 according to a new report by Grand View Research, Inc. The demand for data center transformation is likely to grow owing to increasing investment in data center technologies.
The COVID-19 pandemic had a positive impact on the data center transformation market. The leading players increasing inclination toward data security as a result of the pandemic is creating growth prospects for the data center transformation market. Businesses worldwide are making efforts to expedite their digital transformation initiatives to remain viable. Consumers are spending most of their time online. This has led to a rise in demand for data centers with increased storage.The pandemic made it difficult for businesses of all sizes, particularly small ones, to maintain on-premises servers. And they have begun migrating to the cloud. This has resulted in a surged requirement for cloud servers and infrastructures.
The rising adoption of Internet-enabled gadgets worldwide has resulted in a significant increase in the volume of data collected by industries. The introduction of 5G technology, which provides fast data streaming speed, is anticipated to encourage a large number of customers to use digital services. This has prompted IT and telecommunication service providers to deploy enhanced data storage and transportation systems.
Gather more insights about the market drivers, restrains and growth of the Global Data Center Transformation Market
Data Center Transformation Market Report Highlights
- The consolidation services segment accounted for the largest revenue share of over 36.0% in 2024 driven by the rising demand for optimized operational efficiency and cost reduction.
- The cloud service providers segment accounted for the largest revenue share of over 45.0% in 2024 owing to the increasing demand for hybrid and multi-cloud environments. As organizations seek to take advantage of both on-premises and cloud solutions, they are adopting hybrid cloud strategies to facilitate a smooth flow of data and applications between these environments.
- The IT and telecommunication segment accounted for the largest revenue share of over 36.0% in 2024. Growing data traffic is a critical factor driving the transformation of data centers in the IT and telecommunications sectors.
- The data center transformation market in North America held a share of over 45.0% in 2024.
Key Data Center Transformation Company Insights
Key players operating in the data center transformation market IBM, Microsoft, Cisco Systems, Inc., Dell Inc., and Schneider Electric SE. 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 October 2024, Dell Inc. launched new rack-scalable systems, servers, and storage innovations within its Dell AI Factory, tailored for high-density computing and scalable AI workloads. The 21-inch Dell IR7000 rack, designed for high CPU and GPU density, includes native liquid cooling capable of managing up to 480KW and capturing nearly 100% of heat. Dell's Integrated Rack Scalable Systems (IRSS) simplifies AI infrastructure setup with a plug-and-play approach, while new PowerEdge models like the XE9712 (NVIDIA-based) and M7725 (AMD-based) support large AI clusters and dense compute. PowerScale advancements boost capacity, AI performance, and data discoverability, with Dell’s Generative AI Solutions delivering optimized, scalable systems.
- In June 2024, Cisco Systems, Inc. introduced its Nexus HyperFabric AI Clusters, a streamlined data center solution developed in partnership with NVIDIA to support generative AI workloads. This solution combines Cisco and NVIDIA technologies to simplify the deployment of generative AI applications, providing extensive visibility and analytics across the entire AI infrastructure stack. The Nexus HyperFabric AI Clusters enable enterprises to build AI models and inference application infrastructure without needing advanced IT expertise. In addition, the exclusive cloud management capabilities make it easier for customers to deploy, handle, and monitor their data centers, colocation facilities, and edge sites efficiently.
List of Key Players in Data Center Transformation Market
- Accenture
- Atos
- Cisco Systems, Inc.
- Cognizant
- Dell Inc.
- HCL Technologies
- IBM
- Microsoft
- Schneider Electric SE
- Wipro
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