Data Center Transformation Market Size
|Study Period:||2018 - 2028|
|Fastest Growing Market:||Asia Pacific|
|Largest Market:||North America|
*Disclaimer: Major Players sorted in no particular order
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Data Center Transformation Market Analysis
Data center transformation market is expected to register a CAGR of 18% over the forecast period.
- Data center providers across the globe are gradually moving towards data center transformation in order to increase overall efficiency whilst reducing operational costs. Owing to the rapidly rising adoption of cloud, Ineternet of Things (IoT), and big data analytics across various enterprises as a part of their digital transformation strategy, the burden on the data centers is also increasing, leading to the growth in the data centers globally.
- Moreover, data center traffic across the world is also increasing, considering the number of increasing communicating devices and more enterprises switching to software-as-a-service (SaaS)-based applications, as forecasted by Cisco, which will also drive the market.
- With the increasing reliability and the increase in the number of data centers around the world, data center providers are finding it difficult to maintain consistency and operational efficiency.
- Energy efficiency considerations are also gaining importance among data centers since energy accounts for almost 40% of total costs (according to network strategy and technology company Ciena). Infrastructure management, as a part of the data center transformation, is expected to gain traction over the years, considering the attempt to increase energy efficiency as a cost-saving measure.
- COVID-19 impacted the data center construction in the market examined, as it has caused the construction of several new facilities to be delayed. Building from businesses and colocation service providers has come to a halt. Project pipelines with opportunities between Q4 2020 and Q1 2021 were significantly impacted. Datacenter infrastructure-related supply chain problems were blamed for the same. The situation deteriorated with problematic imports already in place, as many vendors rely on imports of IT, electricity, and cooling infrastructure solutions.
Data Center Transformation Industry Segmentation
The process of changing a data center in order to enhance its general functionality and performance is known as data center transformation. Some experts define and characterize data center transformation as large-scale change programs that affect many important aspects of data center use, such as hardware configurations, users, and business processes.
The data center transformation market is segmented by service (consolidation, automation, optimization, infrastructure management), level of the data center (tier 1, tier 2, tier 3, Tier 4), end user (data center providers, enterprises-BFSI, IT and telecom, retail, healthcare, manufacturing, aerospace, defense, and intelligence, and other end-users), and geography (North America, Europe, Asia-Pacific, Latin America, and Middle East and Africa).
The market sizes and forecasts are provided in terms of value (USD million) for all the above segments.
|By Level of Data Center|
|By End User|
|Data Center Providers|
|Middle East & Africa|
Data Center Transformation Market Trends
Data Center Consolidation Service are Expected to Grow at a Significant Rate
- Data center consolidation is the service organizations provide that plans to reduce the size of a single center or merge one or more centers to reduce the overall operating costs and the IT footprint.
- Data center consolidation services offered by vendors in the market allow enterprises to control their data center assets better and more efficiently. The solutions the vendors provide for the data centers are consolidating physical locations, consolidating software into less hardware, etc..
- Consolidation can lower the required equipment, such as servers, storage, and networking equipment, due to CAPEX efficiency. This saves the company a lot of money on purchases. Data centers are well known for being substantial energy consumers and significant contributors to global warming. Consolidating data centers uses less energy overall, significantly lowering the organization's carbon impact.
- Increasing awareness of the data center transformation with respect to consolidating the physical locations has been evident in recent times. According to the Data Center Alliance, 62% of data centers are making consolidation efforts.
- With the increasing data center IP traffic globally, there is a need to consolidate the data centers to reduce cost and improve functionality, which is one of the primary reasons for boosting the growth of the data center transformation market.
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North America Occupies the Largest Market Share
- The North American region holds the largest market share of the global cloud and internet data centers, according to China Internet Network Information Center (CNNIC). This high share can also be because many major players are headquartered in this region.
- North America also contributes substantially to the global data center demand from various end-user industries such as IT, BFSI, retail, and healthcare.
- The Federal government's Data Center Optimization Initiative (DCOI) primarily aims to encourage data center players to consolidate the inefficient infrastructure, optimize existing facilities, achieve cost savings, and transition to a more efficient infrastructure.
- Due to the increased focus on dependability and sustainability, data center owners and operators must investigate cutting-edge technologies like fuel-cell energy storage. Older assets that might be deemed unsuitable for modern colocation are receiving new opportunities thanks to cryptocurrency mining, a comparatively recent source of demand.
- To generalize the statement, through this initiative, the government intends to reduce the costs of physical data centers by a minimum of 25% by the end of the fiscal year. The dominance of this region in the market, combined with the increasing need to reduce operational costs, provides scope for adopting data center transformation solutions, hence driving the market.
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Data Center Transformation Industry Overview
The data center transformation market is highly competitive owing to the presence of many players in the market operating in the domestic as well as the international market. The market is moderately concentrated, with key players adopting product and design innovation strategies. Some of the major players in the market are IBM Corporation, Cisco Systems, Inc., and Wipro, among others.
In October 2022, Kyndryl announced a comprehensive hybrid cloud solution in collaboration with Dell Technologies and Microsoft Corporation. This solution empowers clients in data center, remote, and mainframe environments to expedite their cloud transformation journey by leveraging the infrastructure offered by Dell, Kyndryl's managed services, and Microsoft Azure.
In January 2022, IBM launched the IBM Z and Cloud Modernization Center to facilitate the adoption of hybrid clouds. The center serves as a digital gateway to a wide range of tools, resources, training, and ecosystem partners, assisting IBM Z clients in accelerating the digitization of their applications, processes, and data in a hybrid cloud environment.
Data Center Transformation Market Leaders
Cisco Systems, Inc.
Schneider Electric SE
*Disclaimer: Major Players sorted in no particular order
Data Center Transformation Market News
- January 2022: Kyndryl established a strategic partnership with Google Cloud aimed at digital transformation projects and assisting business customers in becoming more data-driven and sustainable. It combined the companies' capabilities in data and analytics, artificial intelligence, and infrastructure modernization.
- January 2022: Microsoft Corporation announced that it would build some of its most advanced data centers to date in Sweden. These new data network centers in Gävle and Sandviken are planned to be among the most sustainable in the world. Microsoft is building these data centers to meet the needs of future cloud services.
Data Center Transformation Market Report - Table of Contents
1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Overview
4.2 Introduction to Market Drivers and Restraints
4.3 Market Drivers
4.3.1 Need to Reduce Costs and Increase Efficiency of Data Centers
4.3.2 Adoption of Cloud-based Services
4.4 Market Restraints
4.4.1 ROI Concerns Over the Investment across Low Load Data Centers
4.5 Industry Attractiveness - Porter's Five Forces Analysis
4.5.1 Threat of New Entrants
4.5.2 Bargaining Power of Buyers/Consumers
4.5.3 Bargaining Power of Suppliers
4.5.4 Threat of Substitute Products
4.5.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION
5.1 By Services
5.1.1 Consolidation Services
5.1.2 Optimization Services
5.1.3 Automation Services
5.1.4 Infrastructure Management
5.2 By Level of Data Center
5.2.1 Tier 1
5.2.2 Tier 2
5.2.3 Tier 3
5.2.4 Tier 4
5.3 By End User
5.3.1 Data Center Providers
18.104.22.168 IT and Telecom
22.214.171.124 Aerospace, Defense, and Intelligence
126.96.36.199 Other End Users
5.4.1 North America
5.4.4 Latin America
5.4.5 Middle East & Africa
6. COMPETITIVE LANDSCAPE
6.1 Company Profiles
6.1.1 IBM Corporation
6.1.2 Cisco Systems, Inc.
6.1.3 NetApp, Inc.
6.1.4 NTT Communications
6.1.5 Dell EMC (Dell Inc.)
6.1.6 Microsoft Corporation
6.1.7 Schneider Electric SE
6.1.8 HCL Technologies Limited
6.1.9 Accenture plc
6.1.10 Wipro Technologies
6.1.11 Hitachi Vantara Federal, Corporation
6.1.12 Emerson Network Power, Inc
- *List Not Exhaustive
7. INVESTMENT ANALYSIS
8. MARKET OPPORTUNITIES AND FUTURE TRENDS
Data Center Transformation Market Research FAQs
What is the study period of this market?
The Data Center Transformation Market is studied from 2018 - 2028.
What is the growth rate of Data Center Transformation Market?
The Data Center Transformation Market is growing at a CAGR of 18% over the next 5 years.
Which region has highest growth rate in Data Center Transformation Market?
Asia Pacific is growing at the highest CAGR over 2021 - 2026.
Which region has largest share in Data Center Transformation Market?
North America holds highest share in 2022.
Who are the key players in Data Center Transformation Market?
IBM Corporation, Cisco Systems, Inc., Microsoft Corporation, Schneider Electric SE, Wipro are the major companies operating in Data Center Transformation Market.
Data Center Transformation Industry Report
Statistics for the 2023 Data Center Transformation market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Data Center Transformation analysis includes a market forecast outlook to for 2023 to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.