The data center as a service market provide outsourced data center capabilities such as rack space usage, workload management, load balancing, security, cooling and bandwidth to enterprises. With data center as a service, enterprises don't have to buy costly IT infrastructure and take care of maintenance of servers. They can rent infrastructure and other capabilities on pay-as-you-go model from various service providers like colocation facilities, cloud platforms and managed hosting providers. This helps businesses focus on their core competencies rather than IT infrastructure management.
The Global Data Center as a Service Market is estimated to be valued at US$ 89.58 Billion in 2024 and is expected to exhibit a CAGR of 18.3% over the forecast period 2024-2031.
Key Takeaways
Key players operating in the data center as a service are AWS, Microsoft, IBM, Google, Equinix and Digital Realty. AWS dominates the market with over 30% market share owing to its early movement advantage in cloud services.
Data Center As A Service Market Demand is increasing adoption of hybrid cloud and multicloud strategies by enterprises presents huge opportunities for data center as service providers. With hybrid cloud, organizations are leveraging both public and private cloud infrastructure managed by third-party service providers.
Major data center as a service providers are expanding their geographical presence globally through acquisition and partnership strategies. They are establishing new data centers across regions to cater to the latency and compliance requirements of customers globally.
Market drivers
Migration of workloads to cloud and lack of expertise in infrastructure management drives enterprises to adopt data centers as managed service. Benefits like Capex to Opex model, scalability, managed security and upgrades acceleration are boosting the market growth.
Market restrain
Compliance challenges related to data location regulations inhibits global expansion of players. Rigid rules around data storage boundaries pose restrain to public cloud infrastructure. Managing hybrid solutions across private-public platforms increases complexity for providers as well. Concerns around vendor lock-in and rising subscription costs could impact long term adoption of the service.
Segment Analysis
The data center as a service market can be segmented on the basis of organization size, service type, service model type and end users.
Organization Size- The organization size segment can be categorized into small and medium enterprises and large enterprises. The large enterprises sub-segment dominates currently due to the growing need for efficient data storage with minimum investment and maintenance cost in this sector.
Service Type- On the basis of service type, the market can be classified into disaster recovery as a service, storage as a service, backup as a service, and others. The storage as a service sub-segment dominates presently as it provides storage of all critical and non-critical data in cloud with desired security and accessibility features.
Service Model Type- Depending on service model, the market is divided into infrastructure as a service, platform as a service, and software as a service. The infrastructure as a service sub-segment leads due to its cost-effectiveness and ability to offer efficient data center infrastructure on pay-per-use basis.
End Users- The end user segment includes BFSI, IT and telecommunications, healthcare, government, education, and others. Currently, the BFSI sub-segment holds the maximum share as need for secure data storage with minimum infrastructural investments is rising in this sector.
Global Analysis
Regionally, North America captures the major share in the global data center as a service market and is expected to continue dominating over the forecast period. This is attributed to mature cloud computing market and presence of prominent DCaaS providers in the region. Europe ranks second in terms of market share led by countries such as Germany, France and the UK adopting DCaaS services. Asia Pacific is projected to witness the fastest growth owing to rising demand from China, Japan and India for effective data storage on cloud. Central & South America and Middle East & Africa also offer lucrative opportunities for DCaaS providers to strengthen their geographical presence.
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Vaagisha brings over three years of expertise as a content editor in the market research domain. Originally a creative writer, she discovered her passion for editing, combining her flair for writing with a meticulous eye for detail. Her ability to craft and refine compelling content makes her an invaluable asset in delivering polished and engaging write-ups.
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