Data
Center Renovation Market Share, Trends, Growth, Analysis Report – 2034

The global data center renovation market was valued at USD
24.6 billion in 2024 and is projected to register a CAGR of 14.5% between 2025
and 2034.

The exponential rise of cloud computing, streaming
platforms, social media, and e-commerce has triggered a massive increase in
global data traffic, prompting organizations to modernize their data centers to
meet growing demands. As businesses continue to embrace remote work, online
collaboration, and digital transactions, the need for high-performance,
low-latency data processing has become essential.

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The increasing adoption of artificial intelligence (AI), big
data analytics, and 5G-enabled applications is further fueling the need for
infrastructure upgrades to ensure seamless data flow, enhanced security, and
operational efficiency. Data center operators are investing in advanced
solutions to improve power management, cooling efficiency, and network
performance. Additionally, the growing emphasis on environmental sustainability
is driving the adoption of renewable energy sources, liquid cooling systems,
and AI-powered energy management solutions to minimize operational costs and
reduce carbon footprints. As organizations focus on scaling hyperscale and edge
data centers to support high-speed connectivity and low-latency communication,
the demand for upgraded infrastructure continues to surge.

The market is segmented based on product into cooling,
power, IT racks and enclosures, networking equipment, LV/MV distribution, and
data center infrastructure management (DCIM). Networking equipment dominated
the data center renovation market with a 35% share in 2024, driven by the need
for high-speed connectivity and seamless data flow. As digital transformation
accelerates across industries, data centers are upgrading their routers,
switches, fiber-optic infrastructure, and load balancers to support increasing
workloads from cloud computing, AI, and 5G technologies. The adoption of
software-defined networking (SDN) and network function virtualization (NFV) is
enhancing operational flexibility and reducing latency, making it a critical
segment of the market.

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On the basis of end use, the data center renovation market is
divided into BFSI, healthcare, IT and telecom, government, and others. The IT
and telecom sector led the market with a 37.7% share in 2024 due to the growing
need for advanced digital infrastructure to accommodate the expanding footprint
of cloud services, AI applications, and 5G networks. As data volumes soar,
telecom operators and cloud service providers are investing in hyperscale and
edge data centers to ensure faster data processing, improved network
efficiency, and reduced latency. This trend has resulted in a significant boost
to the demand for data center modernization and renovation initiatives
globally.

North America data center renovation market accounted for a
35% share in 2024, with the United States dominating the region. The rapid
growth of cloud computing, increased adoption of AI, and evolving regulatory
requirements have prompted hyperscale and enterprise data centers to invest
heavily in modernization efforts. These investments are focused on enhancing
cooling efficiency, optimizing power usage, and strengthening cybersecurity
protocols. Sustainability initiatives play a critical role in shaping these
renovation strategies, with companies integrating renewable energy solutions,
liquid cooling technologies, and AI-driven energy management systems to improve
efficiency and reduce their carbon footprints. As data center operators in the
U.S. continue to prioritize innovation and compliance, the market is poised for
sustained growth over the coming years.

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