Data Center Outsourcing Market Trends
The size of the global data center outsourcing market was valued at USD 150.60 billion in 2024 and is projected to register a CAGR of 6.2% from 2025 to 2035. Increased demand for digital transformation among industries is a primary driver for the data center outsourcing market. With businesses moving toward cloud computing, AI-as-a-service, and big data analytics, there is a growing necessity for adaptable, scalable, and cost-efficient IT infrastructure. More and more organizations are finding it more strategic to outsource data center management to specialized vendors so that they can focus on their core business while maintaining high uptime, security, and compliance levels.
Additionally, the fast pace of digital transformation strategy evolution among organizations is creating more demand for scalable and agile IT infrastructure, driving further the adoption of data center outsourcing. Increasing management complexity of hybrid IT environments integrating on-premises installations with cloud-based assets, is prompting firms to look beyond their in-house capabilities. Outsourcing partners not only offer infrastructure management but also high-end capabilities in domains like cybersecurity, disaster recovery, and regulatory compliance, which are becoming increasingly important in today's highly regulated and risk-aware environments.
The other key growth driver is the increasing adoption of new technologies like artificial intelligence (AI), machine learning (ML), Internet of Things (IoT), and edge computing. These technologies involve highly advanced data handling capabilities and strong IT environments, which are preferred by most enterprises to have managed through outsourcing alliances instead of developing in-house. Furthermore, the worldwide move toward sustainability and green IT measures is encouraging firms to partner with data center operators that provide power-efficient facilities and carbon-neutral options, further boosting demand in the outsourcing data center outsourcing market.
Report Coverage & Deliverables
- Competitive benchmarking
- Historical data & forecasts
- Company revenue shares
- Regional opportunities
- Latest trends & dynamics
Service Type Insights
The managed hosting services sector dominated the market and held the revenue share of more than 25.0% in 2024 owing to increasing demand for cost-effectiveness. Since businesses are under pressure to minimize operational costs, outsourcing data center management and hosting services has become increasingly appealing. Organizations can lower capital expenses related to hardware buying and data center space and decrease the cost of hiring personnel for internal IT staff through the usage of managed hosting services.
The security management services market is expected to register a CAGR of 8.6% over the forecast period due to the increasing frequency and sophistication of cyberattacks. The hackers keep changing their tactics, and it is challenging for conventional security solutions to keep pace with them. Data breaches, ransomware, Distributed Denial-of-Service (DDoS) attacks, and insider threats are only some of the increasing security threats that organizations have to contend with.
Deployment Type Insights
The on-premises category ruled the market in 2024. For companies which are engaged in industries that involve real-time data processing, e.g., trading platforms, gaming industry companies, and industrial automation, reducing latency and increasing processing speed is of the highest priority. On-premises data centers have the benefit of reduced latency through keeping data processing local to where it is being created, thus eliminating the delay that can come with cloud infrastructures that are based on distant data centers. This makes on-premises solutions best for applications requiring high-performance computing, low-latency networking, and fast data throughput.
The cloud segment is anticipated to record a substantial CAGR during the forecast period, fueled by the mounting use of cloud technologies by industries. Cloud deployment provides organizations with the feature of outsourcing the task of managing their own data center infrastructure, which translates into an adaptable, scalable, and affordable solution for organizations looking to streamline their IT operations. The most important drivers of growth for the cloud deployment type segment include cost savings, scalability, security, and the growing dependence on cloud-based applications.
Organization Size Insights
The large enterprises sector led the market in 2024. Large organizations tend to have fluctuating resource requirements owing to business expansion, mergers and acquisitions, seasonal fluctuations in data consumption, or global growth. Outsourcing data center operations enables these organizations to grow their infrastructure on a pay-as-you-grow basis without having to make significant investments in physical hardware or deal with the intricacies of expanding internal data centers.
The SMEs segment is likely to witness a high CAGR during the forecast period. Besides cost and scalability, access to new technologies is another major driver pushing SMEs towards data center outsourcing. As digital transformation becomes imperative for enterprises of all sizes, SMEs must use advanced technologies like cloud computing, big data analytics, AI, and ML to remain competitive in the market.
End Use Insights
The IT segment dominated the market in 2024 due to the increasing demand for cloud computing services. With businesses of all sizes increasingly adopting cloud-based platforms, the need for scalable, reliable, and cost-efficient data centers has become more prominent. Data center outsourcing provides IT companies with access to flexible cloud services, allowing them to scale their infrastructure according to demand without the need for significant capital investment.
The telecom segment is expected to grow at a significant CAGR over the forecast period owing to the expansion of 5G networks. As telecom providers continue to roll out 5G infrastructure globally, they require vast amounts of data processing power and storage to support the increased data traffic and connectivity demands. The roll-out of 5G requires not only the establishment of new network infrastructure but also a significant increase in data processing capabilities at the edge of networks to handle real-time data transmission and processing. Data center outsourcing provides telecom companies with access to the necessary infrastructure to support the increased demand for data storage, compute power, and connectivity.
Regional Insights
North America dominated the data center outsourcing industry with a major share of approximately 39.0% in 2024, led by the region's aggressive cloud-first strategies and developing managed services market. Numerous businesses are shifting away from mere infrastructure outsourcing to integrated, cloud-focused models, focusing on agility and innovation in services. This transformation is generating high demand for outsourcing vendors with the ability to provide hybrid cloud management, multi-cloud orchestration, and migration services seamlessly, in addition to standard hosting or colocation.
The U.S. data center outsourcing market is projected to expand enormously at a CAGR of 6.2% between 2025 and 2035. The steep increase in data privacy legislation, such as the enforcement of the California Consumer Privacy Act (CCPA) and the extension of cybersecurity compliance mandates across industries, is substantially driving the growth of outsourcing. Firms increasingly turn to third-party vendors with certified data centers and regulatory specialists to minimize the threat of lawsuits and ensure compliance with intricate regulatory requirements.
Europe Data Center Outsourcing Industry Trends
The European data center outsourcing market is expected to record significant growth between 2025 and 2035, fueled by the region's growing emphasis on digital sovereignty and data localization needs. As regulatory frameworks like the General Data Protection Regulation (GDPR) and the development of national and regional data protection legislation gain traction, European businesses are looking more and more for outsourcing vendors with local data center presence and proven compliance knowledge.
The UK data center outsourcing market is set to grow exponentially over the next few years. With initiatives like the UK Government Digital Service (GDS) strategy and growing public sector mandates for digitalization, there is growing demand for expert outsourcing partners with the ability to host core government infrastructure while maintaining rigorous compliance standards in the public sector.
The German data center outsourcing market commanded a significant market share in 2024, fueled by the dominance of Germany in Industry 4.0 and the pervasive adoption of smart manufacturing and industrial IoT technologies. Such technologies demand robust, low-latency, and scalable IT infrastructures to support the explosion of data produced by connected devices and automated production lines.
Asia Pacific Data Center Outsourcing Market Trends
Asia Pacific is anticipated to have the highest CAGR of 7.2% during the period from 2025 to 2035, driven by the exponential growth of digital economies in the region. Nations like China, India, Indonesia, Vietnam, and the Philippines are experiencing swift digitalization in banking, retail, education, and healthcare sectors. This digital services' boom is leading businesses to offload data center operations to carriers that can provide scalable, secure, and low-cost infrastructure supporting huge volumes of data and tens of millions of users in rapidly mobile-first economies.
The Japanese data center outsourcing market will continue to grow exponentially over the next few years. As Japan's big businesses shift toward Industry 4.0, automation, and AI-powered operations, the need for dynamic, high-performance, and scalable IT infrastructure is building up. Data center management outsourcing enables companies to access expert skills, like AI-based operations, without having to spend money on internal IT development, which also fuels the growth of the DCO market further.
China's data center outsourcing market occupied a large share of the market in 2024. Growing demand for solid, scalable data center outsourcing capabilities is being spurred by China's e-commerce, digital entertainment, and fintech sectors. All these companies work with huge amounts of consumer information and need IT infrastructure that is capable of delivering traffic spikes, providing high availability, and ensuring high security requirements. Outsourcing data center operations allows these organizations to achieve optimal levels of service without overloading internal resources, hence creating long-term relationships with specialist outsourcing providers.
Key Data Center Outsourcing Company Insights
Major players in the data center outsourcing market include Amazon Web Services (AWS), Fujitsu, Microsoft Azure, Google Cloud, and NTT Communications. The firms are emphasizing different strategic initiatives, such as new product development, partnerships & collaborations, and agreements to achieve a competitive edge over their competitors. Some examples of such initiatives are as follows.
NTT DATA, Inc. introduced its Agentic AI Services for Hyperscaler AI Technologies in March 2025, a visionary suite aimed at assisting organizations in integrating, creating, running, and expanding AI agents. The services are designed to enhance efficiency in operations, fuel innovation, and boost employee and customer experiences, leading to the optimal return on AI investments.
Amazon Web Services (AWS) and Oracle introduced Oracle Database AWS in September 2024. This new service provides access to Oracle Autonomous Database and Oracle Exadata Database Service running on dedicated infrastructure in AWS. This service delivers an integrated experience across AWS and Oracle Cloud Infrastructure (OCI), streamlining database administration, customer service, and billing, and facilitates customers to smoothly connect their Oracle Database to apps running on AWS Analytics services, Amazon EC2, and AWS's AI and machine learning platforms, such as Amazon Bedrock, making their use of data for advanced analytics and AI capabilities more powerful.
Key Data Center Outsourcing Companies
The following are the leading companies in the data center outsourcing market. These companies collectively hold the largest market share and dictate industry trends.
- Accenture
- Amazon Web Services (AWS)
- Atos
- Capgemini
- Cognizant
- DXC Technologies
- Fujitsu
- Google Cloud
- HCL
- IBM Corporation
- Microsoft Azure
- NTT DATA, Inc.
- Orange
- Tata Consultancy Services (TCS)
- Verizon Communications
- Wipro
Data Center Outsourcing Market Report Scope
|
Report Attribute |
Details |
|
Market size in 2025 |
USD 157.58 billion |
|
Revenue forecast in 2030 |
USD 213.16 billion |
|
Growth rate |
CAGR of 6.2% from 2025 to 2035 |
|
Actual data |
2018 - 2024 |
|
Forecast period |
2025 - 2035 |
|
Quantitative units |
Revenue in USD billion and CAGR from 2025 to 2035 |
|
Report enterprise size |
Revenue forecast, company share, competitive landscape, growth factors, and trends |
|
Segments covered |
Service type, deployment type, enterprise size, end use, region |
|
Regional scope |
North America; Europe; Asia Pacific; Latin America; MEA |
|
Country scope |
U.S.; Canada; Mexico; UK; Germany; France; China; India; Japan; Australia; South Korea; Brazil; UAE; Kingdom of Saudi Arabia; South Africa |
|
Key companies profiled |
Accenture; Amazon Web Services (AWS); Atos; Capgemini; Cognizant; DXC Technologies; Fujitsu; Google Cloud; HCL; IBM Corporation; Microsoft Azure; NTT DATA, Inc.; Orange; Tata Consultancy Services (TCS); Verizon Communications; Wipro |
|
Customization scope |
Free report customization (equivalent to 8 analysts working days) with purchase. Addition or alteration to country, regional & segment scope. |
|
Pricing and purchase options |
Avail customized purchase options to meet your exact research needs. Explore purchase options |
Global Data Center Outsourcing Market Segmentation
Service Type Outlook (Revenue, USD Billion, 2018 - 2035)
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Managed Hosting Services
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Colocation Services
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Infrastructure Management Services
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Disaster Recovery and Backup Services
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Network Management Services
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Storage Management Services
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Security Management Services
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Migration and Consolidation Services
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Consulting and Advisory Services
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Others
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Deployment Type Outlook (Revenue, USD Billion, 2018 - 2035)
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On-Premises
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Cloud
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Hybrid
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Enterprise Size Outlook (Revenue, USD Billion, 2018 - 2035)
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Large Enterprises
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Small and Medium Enterprises (SMEs)
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End Use Outlook (Revenue, USD Billion, 2018 - 2035)
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IT
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Telecom
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Healthcare
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BFSI
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Retail & E-commerce
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Entertainment & Media
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Energy
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Others
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Regional Outlook (Revenue, USD Billion, 2018 - 2035)
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North America
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U.S.
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Canada
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Mexico
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Europe
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UK
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Germany
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France
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Asia Pacific
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China
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India
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Japan
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South Korea
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Australia
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Latin America
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Brazil
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Middle East & Africa
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UAE
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Saudi Arabia
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South Africa
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