KGH RESEARCH & ADVISORY

DATA CENTER IT & NETWORKING EQUIPMENT MARKET SIZE & SHARE BY COMPONENT (SERVER, NETWORKING EQUIPMENT, AND STORAGE), BY DATA CENTER TYPE (HYPERSCALER, COLOCATION, AND ENTERPRISE), BY WORKLOAD (AI BASED, NON-AI BASED), BY DEVELOPER (OEMs AND ODMs), BY END USE, BY HARDWARE, SOFTWARE, AND SERVICE, BY INSTALLATION (FIRST FIT AND REPLACEMENT / REFRESH), AND BY REGIONS & KEY COUNTRIES – FORECAST TO 2035
Report Code: ICT6001-1201 Number of Pages: 300+ Report Format: PDF, EXCEL, PPT
Trend Year: 2022 – 2024
Forecast Period: 2025 – 2032
Publish Date: SEPTEMBER 2025

Market Overview: The global data center IT & Networking Equipment market is estimated at US $260 Billion (incl. replacement/refresh spending) in 2024, and this market is expected to grow at a CAGR (2025 – 2035) of more than 10% to become USD 790 Billion market opportunity by 2035 The growth is attributed to two prime drivers, that are increasing deployments of compute heavy AI based mega data centers, globally and increasing data center installation worldwide. Data centre networks and IT equipment are the backbone of modern digital infrastructure, supporting everything from cloud computing to AI applications. The growing demand for data-driven services, cloud migration, AI, and IoT connectivity are key growth drivers, fuelling the need for high-speed, scalable networks and robust IT hardware. Advances in software-defined networking (SDN), edge computing, and energy-efficient technologies are also accelerating this growth. As data volumes soar, data centres require cutting-edge CPUs & GPUs, high-density servers, storage solutions, and advanced networking equipment to ensure speed, reliability, and scalability. This evolving landscape demands continuous innovation to meet the ever-increasing performance driving huge investment on computational heavy, highly advanced, and expensive next generation GPUs, CPUs, and supporting infrastructure.

MARKET DYNAMIC
GROWTH DRIVERS:
  • The global data center market is expected to grow at >10% CAGR during the next 10 years, driving huge investment on DC infrastructure
  • Increasing adoption of Generative & Specialized AI is driving huge investments on infrastructure in the AI based mega data center
  • Driver 3: Refer Report
  • Driver 4: Refer Report
  • Driver 5: Refer Report
NEW GROWTH OPPORTUNITIES:
  • The specialized chips and dense architectures at the heart of AI data centers likely to remain the key driver for the market growth during the forecast period
  • Increasing rack density to meet the demand for compute heavy workloads driving demand for expensive, but highly reliable liquid cooling solutions
  • Waste heat energy recovery from data center in district heating, power generation, and agriculture to add new revenue stream for infrastructure providers & DC owners & Operators
MARKET RESTRAINTS:
  • With growing data center installation around the world, the energy demand is growing exponentially. Huge investment is needed in the energy generation industry to keep up with the pace of data center growth
  • Market Restrainer 2: Refer Report
  • Market Restrainer 3: Refer Report
GROWTH HURDLES:
  • Regulatory pressure to reduce excessive heat generation, water usage, and green house gas emission from data center and ancillary industries supporting data centers putting immense pressure on data center owners & operators and infrastructure providers, globally
  • Growth Hurdle 2: Refer Report
  • Growth Hurdle 3: Refer Report
Market Insights

IT Equipment:

The global data centre server market was valued at US $230 Billion in 2024 and observed an impressive growth from 2023, primarily driven by the significant deployments and investment on artificial intelligence (AI) and machine learning (ML) based GPU servers in hyperscale data centres. This robust expansion in server infrastructure, coupled with a strong overall unit growth year-over-year, signifies a considerable recovery and expansion of the market after overcoming previous challenges. Projections indicate a continued strong growth trajectory for the server market over the next 10 years, with an anticipated compound annual growth rate (CAGR) of >10%. North America is the fastest growing region in the deployment of compute heavy servers by major hyperscale data centre owners and operators.

Storage and Networking Equipment:

The global data centre storage and networking equipment market was valued at more than US $30 Billion in 2024. AI based workloads are bandwidth intensive and require considerable investment on the networking equipment.

Regional: Market Insights

North America continues to lead the global data center market accounted for almost 50% share of the new installations, with the U.S. and Canada driving significant investments. The region is projected to maintain a compound annual growth rate (CAGR) of more than 8% from 2025 to 2035. Major hyperscale operators like Amazon Web Services, Microsoft, and Google are expanding their infrastructure to meet the growing demand for cloud services and AI applications.

 Europe is expanding steadily, with a focus on energy efficiency and sustainability in data centre architecture. More money is being invested in colocation and modular data centres in nations like the UK, the Netherlands, and Germany. Data centre development is being influenced by the region’s emphasis on green technologies and adherence to strict data protection laws.

 Asia Pacific is also experiencing significant growth, and is likely to become the second largest region after North America in terms of cumulative installations during the forecast period. The data center boom in Asia Pacific is being fuelled by how fast the region is going digital. With more people online than anywhere else in the world, especially in countries like China, India, and across Southeast Asia, there’s a massive need for reliable, high-speed infrastructure. Cloud adoption is skyrocketing as businesses modernize, and tech giants like AWS, Google, and Alibaba are racing to build out their networks. At the same time, 5G is rolling out across places like Japan and South Korea, pushing the need for faster, more localized data processing—AI workloads, edge computing. Governments are also playing a big role, with initiatives like Digital India and smart city projects across the region making it easier for companies to invest and build. Even countries like Malaysia and Indonesia are stepping up, offering new opportunities as demand spreads beyond the traditional hubs like Singapore and Hong Kong.

 The Middle East & Africa is quickly becoming a hotspot for data center growth, thanks to a wave of digital transformation sweeping across the region. Countries like the UAE, Saudi Arabia, and South Africa are leading the charge, investing heavily in cloud infrastructure, smart cities, and AI technologies. Global tech giants and local players alike are setting up data centers to meet the rising demand for digital services, driven by everything from online banking and e-commerce to video streaming and government digitalization efforts. What’s fuelling this momentum even more is strong government backing—think Vision 2030 in Saudi Arabia and the UAE’s digital economy strategies—plus improved connectivity through new undersea cables and better fiber networks. As internet penetration grows and more businesses move to the cloud, the region is positioning itself as a serious player in the global data center landscape.

Competition: Data Center IT & Networking Equipment

The global data centre server market was further broken down by ODMs versus OEMs, where ODMs accounted for 1/3rd of the global DC server market, while OEMs like Dell, HPE, SuperMicro, IEIT Systems, H3C, IBM, Lenovo, and others together accounted for 2/3rd share of the market. Cisco is the world largest player in the networking equipment market, followed by Arista Networks, Huawei, and H3C together accounted for approx. 65% share.

GLOBAL DATA CENTRE IT AND NETWORKING EQUIPMENT MARKET SNAPSHOT

Market size in 2024

USD 260 Billion

Market forecast in 2035

USD 790 Billion

Compound Annual Growth Rate (2025-2032)

>10%

Historical Data (Years)

2022-2024

Forecast Data (Years)

2025-2035

Growth Drivers

Growing Data Center Market, Increasing Deployments of Generative AI and Specialized AI based Data Centers

Segments Covered

Component Type, Offering, Data Center Type, Workload, Installation, End Use, and By Region and Countries

Regions Covered

North America, Europe, Asia Pacific, South America, Middle East & Africa

Countries Covered

US, Canada, Mexico, UK Germany, France, Italy, Ireland, Sweden, Netherlands, Switzerland, Spain, Russia, China, India, Japan, Singapore, South Korea, Thailand, Indonesia, Australia, Malaysia, Saudi Arabia, UAE, South Africa, Brazil, Argentina, and Rest of the World

Companies Profiled

NVIDIA, AMD, INTEL, AMPERE, HUAWEI, CISCO SYSTEMS, ARISTA NETWORKS, DELL, LENOVO, FUJITSU, HPE, SUPERMICRO, H3C, IBM, IEIT SYSTEMS, AND MANY MORE







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