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The global data center automation market size was valued at USD 7.40 billion in 2021. The market is projected to grow from USD 8.49 billion in 2022 to USD 27.35 billion by 2029, exhibiting a CAGR of 18.2% during the forecast period. Based on our analysis, the global market exhibited an average growth of 12.87% in 2020 as compared to 2019.
In our market study, we have considered various data center automation solutions offered by the market players, such as Microsoft Corporation’s Microsoft Focus Data Center Automation, Microsoft Azure Data Center, Cisco Systems Inc.’s Cisco UCS Manager, Cisco UCS Central, and Cisco UCS Performance Manager, among others. In addition, our study covers Dell Inc.’s Dell EMC (data center consolidation, migration) and SDDC (software-defined data center), among others.
The global data center automation market growth can be attributed to several factors such as the rising adoption of cloud, video streaming platforms, social media, and the Internet of Things (IoT) devices across enterprises. In addition, the emergence of the 5G network and increased demand for improved data center performance in response to the rising data volume create ample market growth opportunities.
Emergence of the COVID-19 Pandemic Increased the Investment in Development of Data Center Infrastructure
The COVID-19 pandemic accelerated the adoption of digital services, such as contactless payments, e-payment, online banking, e-commerce, and others, resulting in the generation of huge amounts of data. Similarly, work-from-home and social distancing increased internet traffic. They created huge demand for data center smooth connectivity, networking, and computing power for offering collaborative software for organizations and maintaining data safety and security. Thus, data center automation solutions gained traction during the crisis to manage the data centers during social distancing and lockdown periods.
A surge in demand for e-commerce services, consumer cloud services, and online collaboration tools sharply increased cloud infrastructure consumption, aiding all the major cloud providers. For instance –
However, the COVID-19 pandemic surged data center investment led by Microsoft, AWS, and Google, extending up to USD 37 billion in the third quarter of 2020. Since the pandemic's start, cloud providers such as Amazon Web Services (AWS), Microsoft, Google Cloud, and Alicloud platforms have grown their revenues ranging from 25% to 100%.
The increasing investment by prominent market players to develop data centers worldwide in response to the COVID-19 pandemic is anticipated to drive the market in the coming years. For instance,
Thus, such growing funding and spending are projected to create substantial market opportunities for data center automation solutions.
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Rising Number of Green Data Centers to Act as a Key Trend
Data centers consume around 1% of global electricity demand and contribute to around 0.3% of all carbon dioxide emissions, according to the Environmental Investigation Agency in 2020. Also, the data centers utilize more than 3 to 5 million gallons of water per-day. In addition, as per the Central Statistics Office of Ireland report in 2021, data centers consumed 32% more electricity than in 2020. This high electricity consumption reduction has propelled the demand for green data centers.
Several leading key players are investing in green data centers to reduce carbon emissions and maintain sustainability. For instance,
Surge in Volume of Data to Fuel Market Growth
The rise in the adoption of the Internet of Things (IoT) devices, social media, and smartphones and growing internet penetration generate huge volumes of data per second. For instance,
As per the NASSCOM report, the number of IoT devices generating 79.4 zettabytes of data will reach approximately 75 billion in 2025. The massive volume of data creates demand for data center infrastructure worldwide, which is expected to drive the growth of automation solutions across the data center.
Similarly, the pandemic highlighted the importance of automation in the data center's day-to-day operations. In response, companies invest more in automation and robotics than ever. Automation solutions enable the data center operators to deliver IT services faster and boost their productivity by eliminating manual tasks. For instance,
The constant data generation and use of advanced digital technologies across all industries, including healthcare, BFSI, manufacturing, and retail & e-commerce increase the need to develop sustainable and hyperscale data centers and servers. For instance,
Lack of Skilled Professionals Hinder the Market Growth
With innovations flooding the market, having employees skilled in maintaining and programming advanced technologies is essential. When addressing skill shortage, the data center skills gap is broadening.
According to an Uptime Institute report, as of April 2021, more than half of data center operators are struggling to recruit staff. In addition, the number of employees required to operate global data centers is expected to increase from 2 million in 2019 to about 2.3 million in 2025, so that number is expected to increase further.
Similarly, as per AFCOM’s study, 76% of data center professionals actively try to entice young employees into their organizations. In addition, they are offering free education, remote working options, gym memberships, and meal accounts.
The increased demand for skilled professionals is driven by the projected growth of cloud or internet giants and the increasing capacity of colocation data centers in Southeast Asia, China, Australia, and other APAC countries.
According to AFCOM’s 2021 State of the Data Center Report, most respondents faced difficulties in hiring or recruiting at least some types of skilled professionals. According to the survey, 29% of respondents faced challenges recruiting cloud professionals, and 26% respondents stated they faced difficulties recruiting data center facilities, engineering, and technicians. Besides, 25% of respondents reported difficulties finding the right talent for network security, IT and data center management, and DevOps.
Thus, lack of skilled professionals restricts the market growth.
Solutions Segment to Lead Backed by the Introduction of Data Centers
In terms of component, the market is classified into solutions and services.
The solutions segment held the largest share in 2021 and are anticipated to grow with a remarkable CAGR during the projection period. The services segment is expected to grow with maximum CAR during the projection period owing to the rising demand for managed services and technological advancement with the growing technology. New product launches and product enhancements surge the demand for automation solutions among enterprises.
Large Enterprises to Hold Major Market Share Owing to Deployment of Automation Solutions to Monitor Hyper Scale Data Centers
Based on enterprise type, the market is divided across SMEs and large enterprises. The large enterprises segment is expected to hold a major market share during the projection period due to the rising adoption of automation solutions to manage and monitor complex and hyper-scale data centers. SMEs segment is expected to grow with maximum CAGR during the forecast period owing to the increased adoption of data center automation technology.
As per Zapier’s 2021 State of Business Automation Report, 90% of respondents stated that automation improved employees’ lives in enterprises or workplaces. 88% of small enterprises stated automation helps them to compete with large organizations. This factor indicates that SMEs are expected to fuel the adoption of automation solutions across the data center.
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Public Cloud Data Center Segment to Grow Backed by Robust Investments in Development of Data Centers
Based on data center type, the market is divided into enterprise or on-premise data center, colocation or managed data center, and public cloud data center.
Among these, the public cloud data center segment is expected to grow with maximum growth rate owing to a surge in demand for cloud computing technology and its capabilities, such as cost-effectiveness, ease of installation, and remote access to data.
The growing investment to build cloud data centers is expected to fuel market growth. For instance,
Healthcare Segment to Lead Backed by Rising Adoption of Emerging Technologies
Based on end-user, the market is divided into BFSI, retail & e-commerce, IT & telecommunications, government & public sector, energy & utilities, manufacturing, healthcare, and others.
The adoption of technologies such as virtual reality, the Internet of Things, and wearable technologies across healthcare spurred the demand for better data center networking capacity, computation power, and storage space.
Further, the rising adoption of online payments, contactless payments, and net banking increased the demand for secure data center infrastructure across the BFSI industry. The rapid adoption of industry 4.0 emergence of autonomous vehicles and self-driving cars generates huge volumes of data every second, which creates demand for data center automation solutions in the manufacturing industry.
North America Data Center Automation Market Size, 2021 (USD Billion)
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Geographically, the market is divided into five major regions, North America, South America, Europe, the Middle East & Africa, and Asia Pacific.
North America holds the maximum data center automation market share owing to the presence of the largest data centers and the rapid adoption of automation technology across organizations. For instance, according to Statista, North America had 3,009 data centers as of January 2022. The U.S. and Canada had 2,701 and 308 data centers, respectively. The increased adoption of IoT devices, smart home devices, and wearable technology across the U.S. generates a huge volume of data and creates demand for data center automation to eliminate manual tasks and accelerate operations.
Europe is expected to hold a significant market share during the forecast period due to the presence of major data centers across Germany, the U.K., the Netherlands, and France. The government's efforts to build green data centers and achieve sustainability create new market opportunities in the region. The European Union’s Climate Neutral Data Centre Pact aims to make the region the first climate-neutral continent globally by 2050.
Asia Pacific is expected to hold the maximum CAGR during the projection period. The surge in investment by key market players to develop cloud and colocation data centers is anticipated to create new market opportunities for growth. For instance,
The Middle East & Africa is anticipated to show potential market growth in the coming years.
Similarly, the Digital Oman 2030 strategy, Qatar National E-Health & Data Program, Saudi Arabia’s e-Health strategy, Qatar's Smart educational platform, and Kuwait's First Virtual Clinic, among others are expected to fuel rapid digital transformation across the region. This factor is projected to boost the growth of corporate, government, healthcare, and education industries across the region.
South America is projected to exhibit steady growth during the forecast period. However, the COVID-19 pandemic accelerated foreign direct investment across the region. The emergence of new data centers across Brazil and Argentina is expected to propel the demand for data center automation solutions in the region. For instance,
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November 2021 - Tencent Cloud launched a data center campus in Brazil to provide reliable, secure, and high-performance cloud services for clients in Brazil.
Market Players to Drive Merger and Acquisition Strategies to Expand their Shares
Prominent players operating in the global market focus on expanding their global presence and market share through merger and acquisition strategies. These companies aim to acquire small and local firms to expand their business presence.
An Infographic Representation of Data Center Automation Market
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The research report provides a detailed market analysis. It focuses on key aspects such as leading companies, software types, and leading software and services applications. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market in recent years.
Value (USD Billion)
By Component, Enterprise Type, Data Center Type, End-user, and Region
By Enterprise Type
By Data Center Type
The market is projected to reach USD 27.35 billion by 2029.
In 2021, the market value stood at USD 7.40 billion.
The market is projected to grow at a CAGR of 18.2%.
The public cloud data center segment is likely to lead the market.
The surge in volume of data drives the market growth.
Microsoft Corporation, IBM Corporation, Dell Inc., Arista Networks Inc., ABB, Fujistu, Cisco Systems Inc., Micro Focus, Broadcom, and BMC Software Inc. are the top players in the global market.
North America is expected to hold the highest market share.
Asia Pacific is expected to exhibit the highest growth rate during the forecast period.
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