SAN FRANCISCO, United States – Oct. 9, 2026 – The global data center market was valued at USD 383.8 billion in 2025 and is projected to grow from USD 425.3 billion in 2026 to USD 902.2 billion by 2033, according to Grand View Research. The market is expected to expand at a compound annual growth rate (CAGR) of 11.3% from 2026 to 2033. Enterprises, governments, and hyperscale cloud providers are expanding digital infrastructure to support rising data volumes, artificial intelligence (AI) workloads, and cloud-based applications.
Key Highlights
Cloud Adoption, AI, and Edge Computing Fuel Expansion
Cloud computing is a central growth catalyst. Enterprises are moving critical applications and data to public, private, and hybrid cloud models to improve scalability and reduce capital expenditure. In response, hyperscalers such as Amazon Web Services, Microsoft Azure, Google Cloud, and Alibaba Cloud are expanding their global regions and availability zones.
Edge computing adds momentum, as data from Internet of Things (IoT) devices and real-time applications increases demand for low-latency processing in sectors such as autonomous vehicles, healthcare, and smart cities. Sustainability also shapes investment, with operators prioritizing energy-efficient designs, renewable energy, and liquid cooling.
Hardware Dominates While Software Grows Faster
Hardware accounted for the largest component share, at 67.4% in 2025. Demand for high-performance computing (HPC) and AI workloads is increasing the need for GPUs, accelerator-based servers, high-density racks, and 100G, 400G, and 800G Ethernet networking. The server segment accounted for over 34.0% of revenue share in 2025, while uninterruptible power supply (UPS) systems are expected to record the fastest CAGR through 2033.
Software is projected to grow at a CAGR of 12.6%, as data center infrastructure management (DCIM) platforms give operators real-time visibility for capacity planning and predictive maintenance.
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Segment Trends Favor Higher Density and Resilience
The on-premise segment held the largest type share in 2025, while hyperscale is expected to grow at a significant CAGR. By rack density, the 10-19kW segment led in 2025, while 20-29kW racks are expected to grow fastest. N+1 redundancy led the market, while N+2 is expected to grow fastest. Facilities with a power usage effectiveness (PUE) of 1.2-1.5 led, while those below 1.2 are expected to grow fastest.
Traditional designs held the largest share, yet modular designs are expected to grow fastest. Tier 3 facilities led, while Tier 4 is projected to grow fastest. Large enterprises held the largest share, while small and medium enterprises are expected to grow fastest. Cloud service providers led end use, while technology providers are projected to expand fastest.
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North America Leads, Asia Pacific Grows Fastest
North America held a 38.3% revenue share in 2025, supported by cloud, AI, and big data analytics adoption. The U.S. market is expected to grow at a CAGR of 10.4% from 2026 to 2033, backed by a high concentration of hyperscale providers. Asia Pacific is expected to register the largest CAGR, at 13.7%, as cloud adoption, e-commerce, and 5G expand across China, Japan, India, and Singapore.
Competitive Landscape and Recent Developments
Dell Technologies, Vertiv, ABB, Schneider Electric, and Broadcom are among the key players, pursuing new products, partnerships, and agreements. In July 2026, ABB partnered with Podium, an AI-powered data center design platform, to integrate its source-to-rack power solutions into facility design. In May 2026, Dell introduced PowerStore Elite storage and expanded PowerEdge servers supporting air and liquid cooling.
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