Data Center Renovation Market, By Product, By Data Center, By End Use, Growth Forecast 2025 – 2034

Data Center Renovation Market Size

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

The rapid growth of cloud computing, streaming platforms, social media, and e-commerce has significantly increased global data traffic, pushing organizations to modernize their data centers. As more businesses shift to remote work, online collaboration, and digital transactions, the demand for high-performance, low-latency data processing has surged.
 

Companies have expanded their data center infrastructure to support the growing user base, implementing advanced cooling solutions, AI-driven workload management, and high-density storage systems.
 

For instance, in March 2025, Oman Data Park announced the AI-driven renovation of its Security Operations Center (SOC) with Fortinet’s AI-powered SecOps platform. This upgrade leverages artificial intelligence to automate threat detection and response, reducing Mean Time to Detect (MTTD) and Mean Time to Respond (MTTR). By integrating AI-driven deception technology and digital risk protection (DRP), the renovation enhances cyber resilience and strengthens data center security against evolving threats.
 

As organizations move toward hybrid cloud, AI, and edge computing, traditional data centers are becoming inefficient, costly, and unsustainable. Businesses are now investing in modernized infrastructure that improves energy efficiency, cybersecurity, and operational scalability. Many enterprises are upgrading their existing data centers by integrating smart automation, modular designs, and high-performance computing (HPC) technologies.
 

Governments worldwide are introducing strict regulations and sustainability targets to reduce the carbon footprint of data centers. Policies like the EU Green Deal, U.S. Energy Act, and China’s Green Data Center Initiative are encouraging companies to adopt renewable energy sources, smart cooling technologies, and energy-efficient power management. For instance, in July 2024, China unveiled an action plan to accelerate the low-carbon transition of data centers. The plan set a target to reduce the average power usage effectiveness (PUE) to below 1.5 by 2025 and increase the use of renewable energy by 10% annually.
 

Data Center Renovation Market Trends

• Energy-efficient upgrades, renewable energy integration, and eco-friendly cooling solutions are becoming essential in data center renovations. Stricter environmental regulations are driving the adoption of solar, wind, and AI-powered liquid cooling systems.
   
• For instance, in December 2024, AWS announced a new generation of data centers focused on improving sustainability while meeting the increasing power demands of AI workloads. The upgrades include a hybrid cooling system combining air and direct-to-chip liquid cooling, a re-engineered power distribution system, and infrastructure enhancements that boost compute power per site by 12%.
   
• Companies are also investing in carbon-neutral renovations, fuel cells, green construction materials, and AI-driven power management systems to enhance sustainability while maintaining high performance.
   
• Disaster recovery and redundancy improvements are becoming critical as businesses face rising cyber threats, natural disasters, and system failures. Organizations are adopting hybrid and multi-cloud architectures, leveraging AI-driven automation for failovers, and integrating software-defined resilience to ensure business continuity.
   
• For instance, in July of 2022 Oil India partnered Juniper Networks to upgrade its data center networks, deploying QFX5120 and QFX5110 switches to enhance network performance and reliability. This upgrade improved automation, security, and disaster recovery capabilities, reinforcing Oil India's digital infrastructure and supporting its operational continuity.
   

Data Center Renovation Market Analysis

Based on product, the market is categorized into cooling, power, IT racks & enclosures, networking equipment, LV/MV distribution, and DCIM. The networking equipment segment dominated the market in 2024, accounting for over 35% of total revenue.
 

• The networking equipment segment led the data center renovation market due to the rising demand for high-speed connectivity, seamless data flow, and ultra-low latency communication. As digital transformation accelerates, data centers must upgrade their routers, switches, fiber-optic infrastructure, and load balancers to support the increasing adoption of cloud computing, artificial intelligence (AI), big data analytics, and 5G-enabled applications.
   
• For instance, in January 2024, DartPoints completed a significant network upgrade at its downtown Cincinnati data center to better serve the local business community. The upgrade included enhancing the Network Operations Center (NOC) with advanced technologies, ensuring efficient network monitoring and management.
   
• Efficient networking solutions are essential to ensure scalability, security, and uninterrupted service delivery across enterprise and hyperscale data centers.
   
• Power system upgrades, including UPS, battery storage, and AI-optimized distribution, enhance sustainability, while modular racks, hot/cold aisle containment, and smart LV/MV distribution improve efficiency and reliability. DCIM solutions with AI-driven automation, predictive maintenance, and cloud-based analytics are revolutionizing data center operations.
   

Based on end use, the market is divided into BFSI, government, healthcare, IT & telecom, and others. The IT & telecom segment held a dominant market share in 2024 accounting for 37.7% of market share.
 

• The IT & telecom sector dominated the data center renovation market in 2024 due to the rising demand for advanced digital infrastructure to support cloud computing, AI, and 5G expansion. As global data traffic surged, telecom operators and cloud providers focused on scaling hyperscale and edge data centers to improve network efficiency and minimize latency.
   
• For instance, in January 2025 Microsoft announced an USD 80 billion investment in AI-driven data center expansions for fiscal year 2025, with over half allocated to U.S. projects. The initiative includes infrastructure upgrades to support next-generation AI models, featuring GPUs and AI accelerators for enhanced computing power.
   
• The sector also prioritized high-performance computing (HPC), AI-driven automation, and real-time data analytics, requiring upgrades in networking, cooling, and power management. Growing concerns about cybersecurity, data sovereignty, and regulatory compliance pushed companies to modernize their storage, encryption, and disaster recovery systems, ensuring secure and resilient data center operations.
   

Based on data centre, the data center renovation market is segmented into hyperscale, colocation, enterprise, and edge data centers. The hyperscale data center segment led the market in 2024 with market share of around 40%.
 

• The hyperscale data center segment dominated the data center renovation industry in 2024 due to increasing demand for large-scale computing power. As cloud computing, AI, and big data analytics expanded, companies invested heavily in modernizing hyperscale facilities to enhance efficiency, scalability, and sustainability.
   
• Renovations focused on upgrading power and cooling infrastructure, integrating AI-driven automation, and improving energy efficiency to support high-performance workloads.
   
• For instance, in March 2025, EcoDataCenter secured USD 520 million from Areim to expand its Nordic green data center infrastructure. The investment included upgrading existing hyperscale facilities and constructing a new 150MW campus in Sweden, designed for low-carbon, high-efficiency AI and cloud workloads.
   
• The enterprise data center segment saw renovations driven by AI adoption, increased data storage needs, and regulatory compliance. Companies upgraded networking, power efficiency, and security systems to support hybrid cloud deployments and real-time analytics.
   
• The edge data center segment expanded due to rising demand for low-latency processing in 5G, IoT, and AI applications. Renovations focused on energy-efficient cooling, high-speed connectivity, and localized data storage to enhance real-time processing capabilities.
   

North America held the largest share of the data center fire detection and suppression market in 2024, accounting for around 35% of the global market. U.S. dominated in the region and is projected to reach around USD 20 billion by 2034.
 

• The U.S. leads the data center renovation market, driven by rapid cloud expansion, AI adoption, and increasing regulatory requirements. Hyperscale and enterprise data centers are investing in advanced cooling, power optimization, and cybersecurity enhancements to improve efficiency and compliance.
   
• Sustainability initiatives are also influencing modernization efforts, with companies integrating renewable energy, liquid cooling, and AI-driven energy management to reduce operational costs and carbon footprints. Additionally, the demand for edge data centers is rising, supporting 5G, IoT, and real-time analytics across industries.
   
• For instance, in December 2023, The U.S. Department of Veterans Affairs (VA) planned a USD 4.52 million upgrade for its data center at the Ralph H. Johnson VA Medical Center in South Carolina. The project aimed to enhance power and cooling redundancies, improve space efficiency, and modernize infrastructure.
   
• The upgrade included redundant power distribution, Uninterruptible Power Supply (UPS) improvements, cooling system enhancements with Computational Fluid Dynamics (CFD) analysis, and replacement of aging equipment. Additional updates covered fire protection, grounding and bonding, cable management, fiber and copper upgrades, raised floor modifications, security enhancements, and hazardous material abatement.
   

The data center renovation market in Germany is expected to experience significant and promising growth from 2025 to 2034.
 

• Germany remains a leading data center market in Europe, with Frankfurt serving as a key hub for cloud computing, colocation services, and AI-driven infrastructure. Strict environmental regulations, including EU energy efficiency mandates and carbon reduction targets, are driving renovations focused on sustainable cooling, renewable energy integration, and waste heat recovery.
   
• For instance, in January 2025, Ramstein Air Base in Germany reopened its Premier Data Center after a major renovation. The multimillion-dollar project enhanced reliability, cybersecurity, and mission support for NATO and allied partners.
   
• To improve efficiency, operators are implementing hydrogen fuel cells, advanced UPS systems, and AI-powered infrastructure management.
   
• The rest of Europe is experiencing steady growth in data center renovations, driven by stricter EU sustainability policies and increased demand for AI-ready infrastructure. Countries are upgrading facilities with liquid cooling, renewable energy integration, and modular designs to enhance efficiency and meet carbon neutrality goals.
   

The data center renovation market in China is expected to experience significant and promising growth from 2025 to 2034.
 

• China's market is expanding rapidly, driven by the growth of hyperscale facilities, AI workloads, and cloud adoption. Leading tech giants like Alibaba, Tencent, and Huawei are investing in energy-efficient cooling, AI-powered automation, and high-performance networking upgrades to enhance infrastructure scalability.
   
• The Chinese government has introduced strict energy efficiency regulations, such as the Green Data Center Initiative, pushing operators to modernize their facilities with liquid cooling, renewable energy integration, and modular power systems.
   
• Asia-Pacific is witnessing a surge in data center modernization, with Japan, India, and Singapore leading renovations. Rising cloud adoption, 5G expansion, and AI-driven workloads are prompting investments in high-performance networking, energy-efficient cooling, and regulatory-compliant fire suppression systems to ensure infrastructure resilience.
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The data center renovation market in Mexico is expected to experience significant and promising growth from 2025 to 2034.
 

• Mexico is emerging as a key data center hub in Latin America, driven by increasing cloud adoption, AI integration, and foreign investments from major tech companies. Cities such as Queretaro, Mexico City, and Monterrey are attracting hyperscale and colocation providers.
   
• Growing demand for colocation services is prompting providers to modernize facilities with energy-efficient cooling, modular power systems, and high-speed networking upgrades to enhance scalability and reduce operational costs.
   
• For instance, in January 2025, C3ntro Telecom partnered with Infinera to upgrade its data center network in Mexico with the GX Series solution. The deployment enhances long-haul connectivity between Mexico City and Queretaro, offering 1.6 Tb/s capacity for improved scalability and reliability.
   

Data Center Renovation Market Share

• Top 7 companies of data center Renovation industry are Vertiv, Schneider Electric, Dell, Hewlett Packard Enterprise, ABB, Huawei and Eaton. They collectively hold a market share of around 35% in the market.
   
• Schneider Electric focuses on sustainable renovations, using AI-driven energy management, modular power systems, and liquid cooling.
   
• For instance, in March 2025 Schneider Electric partnered with SK Telecom to renovate AI data center infrastructure, focusing on mechanical, electrical, and plumbing (MEP) system upgrades. The collaboration aimed to enhance energy efficiency, cooling, and power management in hyperscale AI data centers (AIDCs) across South Korea.
   
• ABB Ltd focuses on automated power distribution and AI-driven energy monitoring. Its smart switchgear and digital twin technology improve powerreliability and efficiency.
• For instance, in December 2024 ABB and Shinohara Electric advanced containerized data center renovations by integrating ABB Ability Energy Manager to optimize energy efficiency, remote monitoring, and operational reliability.
   
• The collaboration modernized power distribution and energy tracking, making containerized data centers more cost-effective and sustainable.
   
• Hewlett Packard Enterprise (HPE) emphasizes hybrid cloud, AI-powered IT modernization, and edge computing. Its GreenLake platform provides as-a-service solutions for cost-effective, scalable upgrades.
   
• Vertiv upgrades data centers with high-density cooling and modular UPS systems, partnering with hyperscalers for efficiency. Dell focuses on hyperconverged infrastructure, AI automation, and server modernization to optimize workloads.
   
• Huawei enhances data centers with AI-driven automation, liquid cooling, and modular designs for better efficiency. Eaton provides AI-powered energy storage, UPS, and microgrid solutions to improve resilience and sustainability.
   

Data Center Renovation Market Companies

Major players operating in the data center renovation industry include:

• ABB
• Dell
• Eaton
• Hewlett Packard Enterprise
• Huawei
• Rittal
• Schneider Electric
• Vertiv
   

The data center renovation market is becoming increasingly competitive as companies strive to modernize infrastructure, enhance energy efficiency, and integrate next-generation technologies. Leading firms are investing in AI-driven automation, liquid cooling solutions, and modular upgrades to improve performance, sustainability, and scalability. Major players are developing intelligent power management, predictive maintenance tools, and hybrid cloud solutions to meet the evolving demands of digital transformation.
 

Both established data center service providers and emerging tech-driven firms are focusing on energy-efficient retrofits, edge computing enhancements, and cybersecurity fortifications. The adoption of IoT-enabled monitoring systems, smart grid integration, and renewable energy sources is reshaping how data centers are renovated to handle the increasing demand for cloud services, AI workloads, and real-time data processing.
 

Regulatory compliance and sustainability goals are playing a critical role in shaping renovation strategies. Stricter government regulations, such as the EU Energy Efficiency Directive and the U.S. Green Data Center Initiative, are compelling organizations to upgrade their facilities with low-carbon cooling systems, AI-optimized energy management, and eco-friendly construction materials. To stay competitive, data center operators must balance compliance, cost optimization, and environmental responsibility while ensuring uninterrupted performance.
 

Data Center Renovation Industry News

• In March 2025, Nokia partnered with Maxis to upgrade its data centers in Malaysia using 7220 Interconnect Routers and event-driven automation. This collaboration supports Malaysia's growing data center market and Nokia's focus on AI-driven infrastructure.
   
• In January 2025, the City of Mortágua, Portugal, announced a USD 185,000 investment to upgrade its municipal data center. The renovation aims to enhance computing capacity, increase storage, and strengthen disaster recovery measures, ensuring improved system response times and cybersecurity resilience.
   
• In August 2024, Scott Air Force Base in Illinois completed a major data center renovation, expanding its facility to 70,000 square feet. The USD 20 million upgrade modernized communications, electrical, HVAC, and structural systems while improving disaster resilience. River City Construction led the project, ensuring seamless system migration without service disruptions.
   
• In June 2024, Equinix invested USD 160 million to expand its SY5 (Sydney) and ME2 (Melbourne) data centers, adding 4,175 cabinets to support AI adoption with high-density power, advanced cooling, and interconnection.
   

The data center renovation market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue ($Bn) from 2021 to 2034, for the following segments:

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Market, By Product

• Cooling
• Power
• IT racks & enclosures
• Networking equipment
• LV/MV distribution
• DCIM

Market, By Data Center

• Hyperscale
• Colocation
• Enterprise
• Edge

Market, By End Use

• BFSI
• Government
• Healthcare
• IT & telecom
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Southeast Asia 
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • UAE
  • South Africa
  • Saudi Arabia