Data Center Outsourcing Market Size, Share, and Industry Analysis, By Component (Hardware, Software, and Services), By Physical Infrastructure (Data Center Facilities, Racks and Cabinets, Cabling and Wiring, and Power Cooling Infrastructure), By Enterprise Type (SMEs and Large Enterprises), By Industry (BFSI, Healthcare, Government, IT & Telecom, Energy & Utility, Manufacturing, and Others), and Regional Forecast, 2026-2034

The global data center outsourcing market size was valued at USD 162.73 billion in 2025. The market is projected to grow from USD 172.99 billion in 2026 to USD 282.22 billion by 2034, exhibiting a CAGR of 6.31% during the forecast period.

The global data center outsourcing market is experiencing substantial growth due to an increase in the demand for advanced data centers. By outsourcing data centers, businesses can operate more economically and efficiently while gaining additional advantages, such as the ability to concentrate on their core business functions. Outsourcing data centers enables companies to manage their ICT infrastructures with flexibility, ensuring that security and reliability are not compromised.

According to the latest estimates, around 328.7 million terabytes of data is created every year. In the digital world, managing data has become an essential aspect for businesses and individuals alike. The volume of data is expected to reach 181 zettabytes by 2025, which is a 3x increase over 2020. As the volume of data increases, the demand for data centers also increases. According to the Datacentermap, in 2023, there were around 10,978 data centers located globally. As the volume of data increases, the demand for advanced data centers also increases, and due to this, companies outsource data centers. Outsourcing data centers help companies improve their performance and efficiency by leveraging the expertise of the data center provider.

Data Center Outsourcing Market Driver

Rising Demand for AI-powered Applications to Drive Market Growth

In recent years, there has been a surge in the use of AI technologies such as deep learning, advanced machine learning, and automated language processing across several sectors. These technologies are applied in various industries, including financial analysis, medical research, and smart production. These applications often require immediate data processing and sophisticated computations, which necessitate high-performance data centers designed for such workloads.

As per a recent article published by Acropolium, over 42% of businesses that were surveyed reported integrating AI into their operations. In addition, out of the early adopters, 59% of businesses have plans to speed up and expand their investments in AI technology.

Thereby, a surge in AI-powered applications is expected to drive market growth.

Data Center Outsourcing Market Restraint

Privacy Issues and High Initial Cost to Hamper Market Growth

Concerns regarding cyberattacks and possible data breaches are the primary issues that hinder market growth. Additionally, complying with data protection laws such as GDPR and CCPA can be difficult when outsourcing and companies may struggle to guarantee that third-party data centers meet stringent compliance requirements. Furthermore, outsourcing often comes with various hidden costs, and modifying outsourced solutions to align with specific organizational needs or integrate them into existing systems can lead to substantial additional expenses. Therefore, these issues restrict market growth.

Data Center Outsourcing Market Opportunity

Hybrid and Multi-Cloud Deployments to Propel the Market Growth

Several businesses are using hybrid and multi-cloud strategies, combining on-premise data centers with public cloud services. As AI models evolve, the need for varying computing, storage, and networking requirements grows. Hybrid and multi-cloud setups offer dynamic environments to meet these demands. In addition, AI generates and processes large volumes of data. Hybrid and multi-cloud solutions allow businesses to manage this data efficiently across different environments.

As per the industry experts, over 86% of businesses have adopted a multi-cloud strategy owing to shifting business priorities.

Therefore, hybrid and multi-cloud deployments are best suited for organizations searching for flexibility to meet their data center needs.

Segmentation

Key Insights

The report covers the following key insights:

• Micro Macro Economic Indicators
• Drivers, Restraints, Trends, and Opportunities
• Business Strategies Adopted by the Key Players
• Consolidated SWOT Analysis of Key Players

Analysis by Component

By component, the market is divided into hardware, software, and services.

In 2023, the hardware segment was the leading in the market, fueled by the necessity for specialized infrastructure to aid in product development, testing, and deployment. For manufacturers in the hardware industry, running their own data centers can be costly and resource-heavy work. By outsourcing data center functions, they can reduce expenses, enhance resource efficiency, and utilize cutting-edge infrastructure without the responsibilities of ownership and management.

Analysis by Physical Infrastructure

By physical infrastructure, the market is divided into data center facilities, racks and cabinets, cabling and wiring, and power cooling infrastructure.

Data center facilities are expected to showcase significant growth in the coming years as they encompass a wide range of services, including colocation, managed hosting, and cloud infrastructure, catering to the diverse needs of businesses seeking to outsource their IT infrastructure requirements. These facilities invest heavily in state-of-the-art infrastructure, including redundant power systems, cooling mechanisms, and security measures, to ensure uninterrupted operations and optimal performance for their clients. The data center facilities specialize in providing tailored solutions to meet the unique requirements of different industries and use cases.

Analysis by Enterprise Type

By enterprise type, the market is divided into SMEs and large enterprises.

In 2023, large enterprises dominated the market. These organizations, known for their extensive operations and varied IT needs, frequently encounter difficulties in effectively managing their data center environments. As their digital presence expands, the complexity and resource demands of maintaining in-house data centers increase, leading many of these large enterprises to turn to outsourcing providers for specialized expertise and scalable solutions.

Analysis by Industry

By industry, the market is divided into BFSI, healthcare, government, IT & telecom, energy & utility, manufacturing, and others.

The IT and telecommunications industry is projected to experience substantial growth, indicating a strong dependence on outsourced data center services to meet their essential operational and infrastructure requirements. In the IT and telecom sectors, companies function in intensely competitive settings where technological advancement and operational effectiveness are crucial. Consequently, these organizations highlight the importance of scalable and secure data center solutions.

Regional Analysis

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In terms of geography, the global market is segmented into North America, Europe, Asia Pacific, South America, and the Middle East & Africa.

North America accounted for the largest share in 2023, owing to the adoption of advanced technologies, including AI. The expansion in this region is due to the early acceptance of data centers, driven by the growing need for big data, data processing, storage, and analysis. Additionally, the increasing demand for adaptable IT infrastructure and the integration of online services will create substantial growth prospects for the data center outsourcing industry in North America in the foreseeable future. Around 25% of data center space in North America is outsourced, and this trend is continuing.

The U.S. is leading in the region. The capacity of data centers in North America is projected to grow by 2.5 times, with over 24,000 Megawatts currently under construction, according to a report by Cushman & Wakefield. The U.S. is currently a prime location for investing in data centers. Industry experts indicate that the demand for data centers in the U.S. is expected to increase by 10% annually until 2030. The U.S. represents approximately 40% of the global demand, with Germany, Britain, and China following closely behind. Currently, Northern Virginia has the largest data center market globally, with over 275 facilities. Furthermore, substantial construction is underway in Dallas/Ft. Worth, Chicago, and Silicon Valley are anticipated to drive market growth in the coming years.

Asia Pacific is estimated to grow with the highest CAGR during the forecast period as the convergence of cloud computing and artificial intelligence is reshaping industries, and the region stands at the forefront of this transformation. As businesses strive to stay competitive and meet the demands of an increasingly connected world, the demand for robust data center infrastructure has surged. In 2023, according to LSEG, the region’s data center deals hit a record of USD 3.45 billion.

The expansion of data centers is taking place in key European cities, including London, Dublin, Frankfurt, Amsterdam, and Paris. According to Coldwell Banker Richard Ellis (CBRE) Group, in 2023, the supply of data centers in Frankfurt, London, Amsterdam, and Paris (FLAP) has increased in comparison to 2022 as providers work to fulfill the strong demand in these leading European markets. Although there are power availability challenges, significant development and major project deliveries are anticipated in 2024.

Key Players Covered

The global data center outsourcing market is fragmented, with the presence of a large number of group and standalone providers.

The report includes the profiles of the following key players:

• Dell (U.S.)
• Infosys (India)
• TCS (India)
• IBM Corporation (U.S.)
• Atos (France)
• Capgemini (France)
• Fujitsu Ltd (Japan)
• Wipro (India)
• Accenture (Ireland)
• HPE (U.S.)

Key Industry Developments

• In August 2023, Digital Reality introduced high-density colocation services through its platform, platformDIGITAL. These services are designed to offer an infrastructure setup that enhances high-performance computing, aiding in business growth.
• In July 2023, NTT Data introduced an outsourcing service for security management to help avoid incidents and minimize damage when they do occur.