Data Center Automation Market Size, Share & Industry Analysis, By Component (Solutions, Services), By Enterprise Type (SMEs, Large Enterprises), By Data Center Type (Enterprise or On-premise Data Center, Colocation or Managed Data Center, Public Cloud Data Center), By End-user (BFSI, Retail & e-commerce, IT and Telecommunications, Government & Public sector, Energy & Utilities, Manufacturing, Healthcare, Others), and Regional Forecast, 2024-2032

The global data center automation market size was valued at USD 9.85 billion in 2023. The market is projected to grow from USD 11.52 billion in 2024 to USD 40.97 billion by 2032, exhibiting a CAGR of 17.2% during the forecast period.

In our market study, we have considered various data center automation solutions offered by the market players, such as Microsoft Corporation’s Microsoft Focus Data Center Automation, Microsoft Azure Data Center, Cisco Systems Inc.’s Cisco UCS Manager, Cisco UCS Central, and Cisco UCS Performance Manager, among others. In addition, our study covers Dell Inc.’s Dell EMC (data center consolidation, migration) and SDDC (software-defined data center), among others.

The global data center automation market growth can be attributed to several factors such as the rising adoption of cloud, video streaming platforms, social media, and the Internet of Things (IoT) devices across enterprises. In addition, the emergence of the 5G network and increased demand for improved data center performance in response to the rising data volume create ample market growth opportunities.

The COVID-19 pandemic accelerated the adoption of digital services, such as contactless payments, e-payment, online banking, e-commerce, and others, resulting in the generation of huge amounts of data. Similarly, work-from-home and social distancing increased internet traffic. They created huge demand for data center smooth connectivity, networking, and computing power for offering collaborative software for organizations and maintaining data safety and security. Thus, data center automation solutions gained traction during the crisis to manage the data centers during social distancing and lockdown periods. For instance,

• March 2022 - Alibaba Cloud introduced a data center in South Korea as part of an expansion plan in Asia Pacific. Further, the investment is driven by the strong need for digital transformation across the country.

Thus, such growing funding and spending are projected to create substantial market opportunities for data center automation solutions.

Data Center Automation Market Trends

Rising Number of Green Data Centers to Act as a Key Trend

Data centers consume around 1% of global electricity demand and contribute to around 0.3% of all carbon dioxide emissions, according to the Environmental Investigation Agency in 2020. Also, the data centers utilize more than 3 to 5 million gallons of water per-day. In addition, as per the Central Statistics Office of Ireland report in 2021, data centers consumed 32% more electricity than in 2020. This high electricity consumption reduction has propelled the demand for green data centers.

Several leading players are investing in green data centers to reduce carbon emissions and maintain sustainability. For instance,

• In 2021, Microsoft Corporation planned to have all its data centers running on 100% renewable energy by 2025.


• Also, in 2021, Meta Inc. planned to build a green data center to minimize electricity usage.


• In October 2022, PhonePe launched a green data center in India that leverages technologies of NTT Corporation and Dell Technologies Inc.

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Data Center Automation Market Growth Factors

Surge in Volume of Data to Fuel Market Growth

The rise in the adoption of the Internet of Things (IoT) devices, social media, and smartphones and growing internet penetration generate huge volumes of data per second. For instance,

As per the NASSCOM report, the number of IoT devices generating 79.4 zettabytes of data will reach approximately 75 billion in 2025. The massive volume of data creates demand for data center infrastructure worldwide, which is expected to drive the growth of automation solutions across the data center.

Similarly, the pandemic highlighted the importance of automation in the data center's day-to-day operations. In response, companies invest more in automation and robotics than ever. Automation solutions enable the data center operators to deliver IT services faster and boost their productivity by eliminating manual tasks. For instance,

• October 2022 - Augtera Networks partnered with AMD Pensando DPU to automate the data center. The partnership aims to implement network AI in AMD's fourth-generation data center.

The constant data generation and use of advanced digital technologies across all industries, including healthcare, BFSI, manufacturing, and retail & e-commerce increase the need to develop sustainable and hyperscale data centers and servers. For instance,

• May 2021 - according to the U.S. International Trade Commission (USITC), the number of data centers in the U.S. reached 2,600. In addition, as of January 2021, there were around 8,000 data centers globally.

RESTRAINING FACTORS

Lack of Skilled Professionals Hinder the Market Growth

With innovations flooding the market, having employees skilled in maintaining and programming advanced technologies is essential. When addressing skill shortage, the data center skills gap is broadening.

According to an Uptime Institute report, as of April 2021, more than half of data center operators are struggling to recruit staff. In addition, the number of employees required to operate global data centers is expected to increase from 2 million in 2019 to about 2.3 million in 2025, so that number is expected to increase further.

Similarly, as per AFCOM’s study, 76% of data center professionals actively try to entice young employees into their organizations. In addition, they are offering free education, remote working options, gym memberships, and meal accounts.

The increased demand for skilled professionals is driven by the projected growth of cloud or internet giants and the increasing capacity of colocation data centers in Southeast Asia, China, Australia, and other APAC countries.

According to AFCOM’s 2021 State of the Data Center Report, most respondents faced difficulties in hiring or recruiting at least some types of skilled professionals. According to the survey, 29% of respondents faced challenges recruiting cloud professionals, and 26% respondents stated they faced difficulties recruiting data center facilities, engineering, and technicians. Besides, 25% of respondents reported difficulties finding the right talent for network security, IT and data center management, and DevOps.

Thus, lack of skilled professionals restricts the market growth.

Data Center Automation Market Segmentation Analysis

By Component Analysis

Solutions Segment to Lead Backed by the Introduction of Data Centers

In terms of component, the market is classified into solutions and services.

The solutions segment held the largest share in 2021 and is anticipated to grow with a remarkable CAGR during the projection period. These solutions encompass various technologies, such as software-defined networking, hyper-converged infrastructure, and cloud-based management platforms, all aimed at streamlining processes, optimizing resource utilization, and improving scalability and agility within data centers. Furthermore, the services segment is expected to grow with maximum CAGR during the projection period owing to the rising demand for managed services and technological advancement with the growing technology. New product launches and product enhancements surge the demand for automation solutions among enterprises.

• October 2020 – Cisco launched a software-delivered solution built to streamline IT operations across multi-cloud environments and on-premise data centers. Thus, the introduction of solutions is expected to fuel market growth.


• By Enterprise Type Analysis

Large Enterprises to Hold Major Market Share Owing to Deployment of Automation Solutions to Monitor Hyper Scale Data Centers

Based on enterprise type, the market is divided across SMEs and large enterprises. The large enterprises segment is anticipated to hold a major market share during the projection period due to the increasing adoption of automation solutions to manage and monitor complex and hyper-scale data centers. Additionally, data center automation enables large enterprises to standardize processes, improve security, and respond more effectively to changing business needs and market demands. Moreover, SMEs segment is expected to grow with maximum CAGR during the forecast period owing to the increased adoption of data center automation technology. By implementing automation technologies, small enterprises can streamline routine tasks, such as provisioning resources, managing configurations, and monitoring performance, allowing them to focus more on strategic initiatives and business growth.

As per Zapier’s 2021 State of Business Automation Report, 90% of respondents stated that automation improved employees’ lives in enterprises or workplaces. 88% of small enterprises stated automation helps them to compete with large organizations. This factor indicates that SMEs are expected to fuel the adoption of automation solutions across the data center.

By Data Center Type Analysis

Public Cloud Data Center Segment to Grow Backed by Robust Investments in Development of Data Centers

Based on data center type, the market is divided into enterprise or on-premise data center, colocation or managed data center, and public cloud data center.

Among these, the public cloud data center segment is expected to grow with maximum growth rate owing to a surge in demand for cloud computing technology and its capabilities, such as cost-effectiveness, ease of installation, and remote access to data. Public cloud data center offers a wide range of automation tools and services that enable organizations to automate various aspects of their data center operations, including provisioning, deployment, monitoring, and scaling. By leveraging these automation capabilities, businesses can achieve faster time-to-market, improve resource utilization, and enhance overall agility in responding to changing demands.

The growing investment to build cloud data centers is expected to fuel market growth. For instance,

• April 2022 –  Google announced spending of USD 9.5 billion on building a cloud data center.

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By End-user Analysis

Healthcare Segment to Lead Backed by Rising Adoption of Emerging Technologies

Based on end-user, the market is divided into BFSI, retail & e-commerce, IT & telecommunications, government & public sector, energy & utilities, manufacturing, healthcare, and others.

The adoption of technologies such as virtual reality, the Internet of Things, and wearable technologies across healthcare spurred the demand for better data center networking capacity, computation power, and storage space.

Further, the rising adoption of online payments, contactless payments, and net banking increased the demand for secure data center infrastructure across the BFSI industry. The rapid adoption of industry 4.0 emergence of autonomous vehicles and self-driving cars generates huge volumes of data every second, which creates demand for data center automation solutions in the manufacturing industry.

• November 2021 - Daimler, A German Car Maker, selected Norway-based Green Data Center, Lefdal Mine. The shift to green data centers aims to transfer high-performance computing workloads for automated driving technologies and designing vehicles.

REGIONAL INSIGHTS

Geographically, the market is divided into five major regions, North America, South America, Europe, the Middle East & Africa, and Asia Pacific.

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North America holds the maximum market share owing to the presence of the largest data centers and the rapid adoption of automation technology across organizations. For instance, according to Statista, North America had 3,009 data centers as of January 2022. The U.S. and Canada had 2,701 and 308 data centers, respectively. The increased adoption of IoT devices, smart home devices, and wearable technology across the U.S. generates a huge volume of data and creates demand for data center automation to eliminate manual tasks and accelerate operations.

• August 2022 – Jazz selected Juniper Networks to deploy Juniper Apstra System to deliver Intent-based Networking (IBN) abilities. The company aims to upgrade its existing architectural approach using data-driven insights, automation, and assurance to simplify operations and advance user experience.

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Europe is expected to hold a significant market share during the forecast period due to the presence of major data centers across Germany, the U.K., the Netherlands, and France. The government's efforts to build green data centers and achieve sustainability create new market opportunities in the region. The European Union’s Climate Neutral Data Centre Pact aims to make the region the first climate-neutral continent globally by 2050.

• March 2022 – Cisco launched Secure Access Service Edge (SASE) data centers in Sweden and Denmark (Northern Europe) for security customers. Further, in March 2021- Cisco launched a data center in Germany to help customers using its platform, Webex, in the European Union (EU) and Russia region.

Asia Pacific is expected to hold the maximum CAGR during the projection period. The surge in investment by key market players to develop cloud and colocation data centers is anticipated to create new market opportunities for growth. For instance,

• October 2021 – Alibaba Cloud launched two new data centers in Thailand and South Korea. The new data centers aim to assist local businesses in their digital transformation journey.

The Middle East & Africa is anticipated to show potential market growth in the coming years.

• September 2022 - Google Cloud collaborated with Saudi Aramco to introduce a data center in Saudi Arabia. The partnership aims to distribute cloud services across the country.

Similarly, the Digital Oman 2030 strategy, Qatar National E-Health & Data Program, Saudi Arabia’s e-Health strategy, Qatar's Smart educational platform, and Kuwait's First Virtual Clinic, among others are expected to fuel rapid digital transformation across the region. This factor is projected to boost the growth of corporate, government, healthcare, and education industries across the region.

South America is projected to exhibit steady growth during the forecast period. However, the COVID-19 pandemic accelerated foreign direct investment across the region. The emergence of new data centers across Brazil and Argentina is expected to propel the demand for data center automation solutions in the region. For instance,

• November 2021 - Tencent Cloud launched a data center campus in Brazil to provide reliable, secure, and high-performance cloud services for clients in Brazil.

List of Key Companies in Data Center Automation Market

Market Players to Drive Merger and Acquisition Strategies to Expand their Shares

Prominent players operating in the global market focus on expanding their global presence and market share through merger and acquisition strategies. These companies aim to acquire small and local firms to expand their business presence.

List of Key Companies Profiled:

• Microsoft Corporation (U.S.)


• Cisco Systems Inc.(U.S.)


• Micro Focus (U.K.)


• IBM Corporation (U.S.)


• Fujitsu (Japan)


• Broadcom (U.S.)


• BMC Software, Inc. (U.S.)


• Dell Inc. (U.S.)


• Arista Networks, Inc. (U.S.)


• ABB (Switzerland)

KEY INDUSTRY DEVELOPMENTS:

• February 2024: Cisco and NVIDIA declared a partnership to help enterprises easily and quickly manage and develop secure AI infrastructure. The acquisition within the firms brings together the improvements to benefit organizations, support demand for more computing power in the data center and route the changes for AI with secure and recognizable infrastructure.


• June 2023: Moody’s Corporation and Microsoft announced a partnership to provide next-generation analytics, data, research, risk solutions, and collaboration for business services and global knowledge workers. The partnership within the firm makes innovative contributions that improve insights into business intelligence and risk assessment.


• June 2023: Lumen Technologies, in partnership with Google and Microsoft, announced an original network interconnection system- ExaSwitch. The platform allows enterprises with higher bandwidth to route their traffic quickly among networks, and without third-party intervention.


• April 2023: Arista Networks, a provider of networking solutions, introduces AI-driven network identity service for business safety and IT operations. The CV AGNI aids in safe IT operations with simple distribution and cloud-scale for all business network workers, their related endpoints, and Internet of Things (IoT) strategies.


• January 2023: MicroFocus declared the introduction of a new data center in the U.K. The innovative service in the U.K., compliant with local regulations, gives clients modern and cost-effective choices to accelerate IT transformation.

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The research report provides a detailed market analysis. It focuses on key aspects such as leading companies, software types, and leading software and services applications. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market in recent years.

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