Data Center Physical Infrastructure Market Size, Share, Trends, & Industry Analysis Report
By Component (Cabling, Power Systems, Cooling Systems, Cable Management Solutions, Cabinets, and Others), By Deployment, By End User, and By Region – Market Forecast, 2025–2034
- Published Date:Sep-2025
- Pages: 128
- Format: PDF
- Report ID: PM6440
- Base Year: 2024
- Historical Data: 2020-2023
Overview
The global data center physical infrastructure market size was valued at USD 31.48 billion in 2024, growing at a CAGR of 15.00% from 2025 to 2034. Key factors driving demand for data center physical infrastructure include urbanization, adoption of cloud computing, and investment in smart cities.
Key Insights
- The power systems segment accounted for a major revenue share in 2024, due to the growth of data analytics and big data analytics.
- The on-premises segment held the largest revenue share in 2024, owing to its ability to offer greater control, security, and customization.
- North America accounted for a major data center physical infrastructure market share in 2024, due to high cloud adoption and digital transformation.
- U.S. held the largest revenue share in the North America data center physical infrastructure landscape in 2024. This is due to the migration of businesses to the cloud.
- The industry in Europe is projected to grow at a rapid CAGR from 2025 to 2034, due to strict data sovereignty laws.
Industry Dynamics
- Adoption of cloud computing is creating the need for data center physical infrastructure for processing and storage.
- Investment in smart cities is leading to market growth as components of smart cities, such as IoT sensors and surveillance cameras, need data center physical infrastructure.
- Expansion of e-commerce services is creating a lucrative market opportunity.
- The high energy consumption of data center physical infrastructure is expected to hamper the market demand.
Market Statistics
- 2024 Market Size: USD 31.48 Billion
- 2034 Projected Market Size: USD 127.15 Billion
- CAGR (2025-2034): 15.00%
- North America: Largest Market Share
AI Impact on Data Center Physical Infrastructure Market
- AI helps in managing cooling, power distribution, and server workloads. This reduces energy wastage and lowers operational costs.
- AI helps in identifying hardware failures and network issues before they occur.
- AI by monitoring access controls and detecting anomalies enhances physical and cyber security.
Data center physical infrastructure is the base of computing, network, and storage of an enterprise. Storage systems, servers, and data cables are key components of data centers. Data center physical infrastructure also includes power and cooling systems to ensure components operate at optimal temperatures. Virtualization technologies and software tools are covered under the data center physical infrastructure as they contribute to workload and resource management.
Organizations such as governments, financial institutions, tech companies, and healthcare providers need data center physical infrastructure. This is due to as data center physical infrastructure hosts websites, manages cloud applications, and processes vast amounts of data. Cloud providers such as Amazon Web Services (AWS) and Microsoft also use data center physical infrastructure to build and maintain the vast physical infrastructure that forms the basis of their cloud services.
The population growth is leading to urbanization. This is creating the need for data center physical infrastructure. United Nations, in its report, stated that the global urban population is projected to increase to around two-thirds of the total population in 2050. Urban areas use data center infrastructure to power cities, provide essential IT services like AI and big data analytics, support the growing digital economy, and facilitate high-speed internet connectivity. Urban areas are also hubs for businesses and innovation, which require data center physical infrastructure to process, store, and manage the vast amounts of data generated by businesses.
Drivers & Opportunities/Trends
Adoption of Cloud Computing: Cloud computing is being widely adopted by industries such as financial services, healthcare, and manufacturing for various functions, such as data management, supply chain optimization, and advanced analytics. This is creating the need for data center physical infrastructure. Data center physical infrastructure helps organizations that are using cloud computing in processing and storage. Data center physical infrastructure also provides crucial network connectivity and power cooling that allow cloud services to operate continuously and efficiently. Therefore, the demand for data center physical infrastructure is projected to grow, with increasing adoption of cloud computing.
Investment in Smart Cities: Governments across the globe, to attract foreign investment, create jobs, and improve living standards, are investing in smart cities. 94% of the total 8,067 projects under Smart Cities Mission have been completed in India as of June 2025, with ₹1.64 lakh crore or USD 19.4 billion invested. This is creating high demand for data center physical infrastructure to collect, process, and store the massive amounts of data generated by IoT sensors, smart grids, and surveillance cameras placed in smart cities. Data center physical infrastructure also improves a smart cities overall energy efficiency by consolidating servers, updating equipment, and optimizing airflow. Hence, the growing investment in smart cities is propelling the adoption of data center physical infrastructure.
Segmental Insights
Component Analysis
Based on component, the segmentation includes cabling, power systems, cooling systems, cable management solutions, cabinets, and others. The power systems segment accounted for a major revenue share in 2024. This is due to the growth of data analytics and big data analytics, as well as the expansion of e-commerce. Data analytics and big data analytics require power systems in data centers to power the massive computational resources, such as servers and GPUs. E-commerce also relies on data centers to handle fluctuating traffic, secure customer data, and process transactions 24/7, which need power systems for uninterrupted operations, data availability, and business continuity.
Deployment Analysis
In terms of deployment, the segmentation includes on-premises and cloud-based. The on-premises segment held the largest revenue share in 2024. This is owing to on-premises ability to offer greater control, security, and customization. The need for security and strict data control, such as HIPAA or GDPR, encouraged organizations to invest in on-premises data center physical infrastructure. The rise of generative artificial intelligence in countries like the U.S. also propelled the segment dominance, as on-premises solutions provide real-time processing and low latency. Moreover, on-premises infrastructure allows organizations to customize network configurations and hardware to their exact needs. This attracted millions of enterprises toward on-premises data center physical infrastructure.
End User Analysis
In terms of end user, the segmentation includes IT and telecom, BFSI, healthcare, retail, government and defense, and others. The IT and telecom segment dominated the revenue share in 2024. This is due to the rapid expansion of 5G networks, cloud platforms, and streaming services. Data center physical infrastructure is required in 5G networks to support real-time applications and provide the necessary processing, storage, and networking resources. Meanwhile, cloud platforms need it for network connectivity and power cooling. Data center physical infrastructure is also needed in streaming services, such as on-demand video, live video, and audio streaming, to store, process, and deliver vast amounts of video and audio data directly to users over the internet.
The healthcare segment is estimated to grow at a rapid CAGR from 2025 to 2034. This is due to high adoption of digital health solutions, telemedicine, and precision medicine. Telemedicine depends on data center physical infrastructure to provide reliable, scalable, and secure platforms for processing, storing, and transmitting large volumes of health data. Precision medicine also needs data center physical infrastructure to analyze massive, heterogeneous datasets from sources such as electronic health records (EHRs), genomics, and lifestyle data to enable personalized healthcare.
Regional Analysis
North America accounted for a major data center physical infrastructure market share in 2024. This is attributed to high cloud adoption and digital transformation. Cloud services need physical data center infrastructure for storage and networking equipment that provides on-demand computing resources. The region’s high reliance on artificial intelligence, machine learning, and big data analytics also contributed to the demand for data center physical infrastructure by creating the need for high-performance computing capabilities. The adoption of IoT devices in the region, especially in the U.S., led to high demand for physical data center infrastructure for handling massive amounts of data.
U.S. Data Center Physical Infrastructure Market Insight
U.S. held the largest revenue share in the North America data center physical infrastructure landscape in 2024. This is due to the migration of businesses to the cloud and the digitalization of services such as healthcare and public services. Healthcare digitalization includes telemedicine, electronic health records (EHRs), and wearable medical devices. These all generate massive amounts of sensitive data requiring data center physical infrastructure. Moreover, government regulations on data security and compliance requirements also encouraged the deployment of physical data center infrastructure.
Asia Pacific Data Center Physical Infrastructure Market
The Asia Pacific market is projected to hold a significant revenue share in 2034, driven by e-commerce expansion. E-commerce needs large-scale data centers supported by strong physical infrastructure to handle massive user traffic, store customer data, and transaction information. The deployment of 5G networks across emerging nations such as India also propelled the demand for data center physical infrastructure to provide the necessary processing, storage, and networking resources. 4.69 lakhs 5G base transceiver stations (BTSs) have been installed by the Telecom Service Providers (TSPs) across India as of February 2025.
China Data Center Physical Infrastructure Market Overview
The demand for data center physical infrastructure in China is being driven by massive investments in AI research, cloud services, and e-commerce platforms. Data center physical infrastructure is needed in AI research for processing and analysis of massive datasets at high speeds. The government's digital economy initiatives and data localization policies are also propelling the construction of advanced data centers with upgraded power and cooling systems. The high demand for video streaming, gaming, and fintech services in the country is further leading the market growth.
Europe Data Center Physical Infrastructure Market
The industry in Europe is projected to grow at a rapid CAGR from 2025 to 2034, owing to strict data sovereignty laws, growth of cloud services, and the shift toward digital business models. General Data Protection Regulation (GDPR) enacted by the European Union (EU), are creating the need for data center physical infrastructure by mandating that personal data of EU citizens remain within the European Economic Area. The smart city projects in the region are also propelling the market growth by creating the need for localized infrastructure with advanced energy and cooling capabilities.
Key Players & Competitive Analysis Report
The data center physical infrastructure market has become highly competitive as demand for faster, more efficient, and sustainable facilities continues to grow. Companies in this space are focusing on developing flexible designs that can handle rising power densities and the shift toward cloud and edge computing. Moreover, the need for reliability and scalability in the industry is shaping the competitive landscape. Also, innovation plays a critical role, but so do partnerships and acquisitions, which allow players to strengthen their technology portfolios and global reach.
Major companies operating in the data center physical infrastructure industry include ABB; CoreSite; Dell; Digital Realty; Eaton; Equinix; Hewlett Packard Enterprise (HPE); IBM; Schneider Electric; Switch, Inc.; and Vertiv.
Key Companies
- ABB
- CoreSite
- Dell
- Digital Realty
- Eaton
- Equinix
- Hewlett Packard Enterprise (HPE)
- IBM
- Schneider Electric
- Switch, Inc.
- Vertiv
Industry Developments
May 2025, Vertiv, a global provider of critical digital infrastructure announced the global launch of Vertiv SmartRun, a modular prefabricated overhead infrastructure system.
April 2025, iGenius launched one of the world’s largest sovereign AI data centers leveraging Vertiv infrastructure.
Data Center Physical Infrastructure Market Segmentation
By Component Outlook (Revenue, USD Billion, 2020–2034)
- Cabling
- Power Systems
- Cooling Systems
- Cable Management Solutions
- Cabinets
- Others
By Deployment Outlook (Revenue, USD Billion, 2020–2034)
- On-Premises
- Cloud-Based
By End User Outlook (Revenue, USD Billion, 2020–2034)
- IT and Telecom
- BFSI
- Healthcare
- Retail
- Government and Defense
- Others
By Regional Outlook (Revenue, USD Billion, 2020–2034)
- North America
- US
- Canada
- Europe
- Germany
- France
- UK
- Italy
- Spain
- Netherlands
- Russia
- Rest of Europe
- Asia Pacific
- China
- Japan
- India
- Malaysia
- South Korea
- Indonesia
- Australia
- Vietnam
- Rest of Asia Pacific
- Middle East & Africa
- Saudi Arabia
- UAE
- Israel
- South Africa
- Rest of Middle East & Africa
- Latin America
- Mexico
- Brazil
- Argentina
- Rest of Latin America
Data Center Physical Infrastructure Market Report Scope
|
Report Attributes |
Details |
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Market Size in 2024 |
USD 31.48 Billion |
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Market Size in 2025 |
USD 36.14 Billion |
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Revenue Forecast by 2034 |
USD 127.15 Billion |
|
CAGR |
15.00% from 2025 to 2034 |
|
Base Year |
2024 |
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Historical Data |
2020–2023 |
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Forecast Period |
2025–2034 |
|
Quantitative Units |
Revenue in USD Billion and CAGR from 2025 to 2034 |
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Report Coverage |
Revenue Forecast, Competitive Landscape, Growth Factors, and Industry Trends |
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Segments Covered |
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Regional Scope |
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Competitive Landscape |
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Report Format |
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Customization |
Report customization as per your requirements with respect to countries, regions, and segmentation. |
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