Data Center Transformation Market Size

Data Center Transformation Market Size

The global data center transformation market was valued at USD 8.8 billion in 2024 and is projected to grow at a CAGR of 9.3% between 2025 and 2034.

The data center industry is under growing pressure to improve its environmental footprint, driven by regulatory pressures, corporate responsibility, and increasing energy costs. Sustainability has become a key priority, with data centers adopting energy-efficient hardware, optimized cooling systems, and renewable energy sources. Many organizations are implementing green data center designs that reduce power consumption and lower carbon emissions, while also exploring alternative energy sources, such as solar and wind.
 

Efficient infrastructure, such as modular data centers with liquid cooling, are increasingly popular as they consume less energy while providing high computing power. These sustainable measures not only help organizations meet regulatory requirements but also support their commitment to corporate social responsibility. For instance, in June 2024, Onsemi introduced a transformative power solution for data centers, focusing on improving energy efficiency. Using its T10 PowerTrench family and EliteSiC 650V MOSFETs, the solution targets the growing power demands driven by AI workloads. By minimizing energy conversion losses, it can save up to 10 TWh annually.
 

The expansion of IoT and real-time applications has increased the need for edge computing, which brings data processing closer to where data is generated, reducing latency and improving efficiency. With edge computing, data centers are no longer centralized but are distributed across networks to enable local processing and storage, making it possible to respond instantly to IoT data, autonomous systems, and critical applications. This shift is transforming data centers, as they need to be adaptable for smaller, decentralized edge sites. Facilities are increasingly integrating edge servers, IoT connectivity, and management systems tailored for low-latency, high-speed data handling to meet these new performance demands.