Data Center Market to Reach USD 329.82 Billion by 2027, AI Implementation Key Trend - Technavio Report

Technavio, a leading global technology research and advisory company, has projected that the global data center market size is poised to grow by USD 329.82 billion from 2023 to 2027. This growth is forecasted to occur at a Compound Annual Growth Rate (CAGR) of 12.73% during the specified period.

One of the key trends fueling this growth is the implementation of Artificial Intelligence (AI) in data centers. According to Technavio, AI is enhancing energy efficiency in data centers by optimizing server, power, and cooling systems. The utilization of AI expedites decision-making processes, reduces human errors, and provides valuable insights. Service providers are leveraging AI for automation to cut costs and accelerate operations, ultimately leading to benefits such as reduced infrastructure costs, faster deployment, and improved issue responsiveness.

In a statement, Technavio highlighted the significance of AI-driven initiatives, mentioning Intel's third Gen Intel Xeon Scalable processors, which are expected to deliver substantial performance enhancements. By 2027, cloud data centers are projected to integrate AI-driven robots, boosting efficiency by over 30% and driving global market demand.

However, the data center market faces major challenges, particularly in terms of cybersecurity issues. Sensitive data protection is a significant concern, with cyberattacks on the rise due to the increased use of cloud and Internet of Things (IoT) technologies. The risk of DDoS attacks is also growing, posing threats to business operations and data security.

The data center market segmentation includes components such as IT infrastructure, power management, mechanical construction, general construction, and security solutions. End-users are categorized as BFSI, Energy, IT, and Others, with geographical regions spanning North America, APAC, Europe, South America, and the Middle East and Africa.

Moreover, the IT infrastructure segment is expected to experience significant growth, driven by the rising demand for computing power and storage. Investments in hyperscale data centers have been key drivers of growth in this segment, with hyper scalers investing billions in expanding capacities. The forecast indicates sustained growth in the IT infrastructure segment, supported by efficiency-focused practices and innovative technologies.

In conclusion, the data center market is a vital sector in the technology industry, propelled by the growing demand for digital transformation and cloud computing services. As companies invest in advanced technologies like AI, Edge Computing, and IoT, the market is expected to evolve further, overcoming challenges such as energy consumption and data security to meet the evolving needs of modern businesses.