PUBLISHER: Market Xcel - Markets and Data | PRODUCT CODE: 1740716
PUBLISHER: Market Xcel - Markets and Data | PRODUCT CODE: 1740716
Global data center automation market is projected to witness a CAGR of 14.92% during the forecast period 2025-2032, growing from USD 10.59 billion in 2024 to USD 32.22 billion in 2032. The global data center automation market is witnessing notable growth owing to the increasing adoption of digital transformation strategies, rising demand for operational efficiency, and the need for scalable infrastructure.
As organizations continue to expand their virtual presence, data center automation is necessary to minimize errors and utilize resources in a way to best maximize performance and streamline complicated IT practices. Automation enables consistent and repeatable processes, improves service delivery, and reduces costs, all while enhancing overall agility and responsiveness to dynamic market needs. Businesses and cloud providers are investing more capital in intelligent automation software and maintaining partnerships to enhance uptime, power efficiency, and security governance, thereby expanding the market. Increasing focus on intelligent automation is dictating the course of IT infrastructure, fueling the expansion of smart, self-healing, and adaptive data centers globally.
Increasing Adoption of AI and ML Fuels Global Data Center Automation Growth
The adoption of machine learning (ML) and artificial intelligence (AI) is favorably influencing the growth in the global market for data center automation. In addition, AI and ML are forcing data centers to shift from manually controlled traditional systems to intelligent automated systems. These technologies enable predictive maintenance, real-time monitoring, dynamic workload control, and irregularity detection, each aims to drive greater uptime and fewer instances of operations disruption.
AI-based automation also optimizes energy usage by dynamically adjusting cooling and power infrastructure under real-time needs, cutting costs as well as carbon emissions. AI is anticipated to contribute 160% of data center power usage growth. For instance, in September 2024, Nokia Corporation unveiled its Event-Driven Automation (EDA) platform, engineered to optimize data center operations in the AI era. Leveraging Kubernetes, the platform offers intent-based automation, digital twin capabilities, and generative AI integration, aiming to enhance operational efficiency, reduce human error, and lower management efforts up to 40%. Additionally, automation reduces the necessity of continuous human oversight, enabling IT personnel to devote their time to strategic initiatives instead of maintenance activities. With the advancement in AI and ML technologies, even their convergence at data centers is going to be more cutting-edge, further enhancing performance, scalability, and efficiency. Companies are experiencing the advantage of this revolution and hence driving the smart and automated data center infrastructure globally.
Rising Demand for Cloud and Hybrid Infrastructure Surges Data Center Automation Demand
The growing demand for hybrid IT infrastructure and cloud computing is a major market driver for data center automation globally. Organizations are looking for agile and speedy environments that can host increasingly complex and distributed workloads. When companies shift from traditional on-premises deployments to hybrid and cloud-based deployments, it is inefficient and costly to deal with these dynamic infrastructures manually. For instance, in March 2024, Schneider Electric committed USD 140 million to expand its U.S. manufacturing operations, addressing the rising demand for data center automation and from critical infrastructure industries. The investment includes upgrading facilities in Tennessee to produce advanced electrical switchgear and power distribution systems.
Automation allows seamless orchestration on private, public, and hybrid cloud setups. It enables standardized configuration, faster provisioning, real-time monitoring of performance, and simplified troubleshooting. It is particularly vital for organizations that operate businesses in multi-cloud setups since automation guarantees management control, improved data governance, and security standards compliance. Reports from the industry have stated that over 76% of organizations use hybrid or multi-cloud strategies. This transformation is creating an imminent need for automated tools that reduce operations and disengage complexity. Automated systems improve responsiveness and scalability; not only that, but they also reduce human error and operational costs. As the world continues to undergo digital transformation, the ability to automatically process and scale IT assets is becoming a competitive advantage. Hence, the rise in cloud and hybrid infrastructure deployment is the main driver for enhanced investments in the global data center automation market.
Service Segment Dominates Data Center Automation Market Globally
The service segment has the largest market share in the global data center automation market, because of the growing demand for efficient operations, timely maintenance and management of sophisticated IT infrastructures. As the organization is transforming digital operations, they are becoming more dependent on third-party service providers to facilitate smooth deployment, integration and maintenance of automation solutions for data centers. These services typically consist of counseling, installation, support, training and managed services, all of which bear a determining influence on reducing downtime, reducing operating mistakes and optimizing the efficiency of the system. Companies seek diverse solutions that are compatible with their current architecture, and service vendors provide the technical expertise necessary to achieve easy deployment and long-term operation.
For instance, in August 2022, ABB Ltd. signed a Memorandum of Understanding with ATS Global to expand the reach of its ABB Ability Data Center Automation services. This collaboration designates ATS Global as a Global System Integrator, aiming to leverage combined expertise to enhance automation, monitoring, and optimization of data center infrastructure. Moreover, with the increased need for predictive maintenance and long-distance monitoring services, companies try to avoid failure and minimize resource utilization. In addition, the managed services are highly in demand among small and medium-sized enterprises (SMEs) as they lack in-house IT capability. The data center's environment is becoming ever more complex with the adoption of AI, IoT and cloud platforms, the service segment is likely to expand further. This trend reflects a broader movement towards specialty outsourcing functions for purposes of driving dexterity, scalability and operational continuity.
North America holds a prominent share in Global Data Center Automation Market
North America holds the largest percentage of market share in the global data center automation market, facilitated by the early implementation of next-gen technology and access to developed IT and cloud infrastructure. Some of the world's largest tech titans, which are headquartered in North America, are investing heavily in automating data centers to achieve scalability, efficiency, and cost benefits. Moreover, the U.S. government's focus on digitalization across government services and growing demands for edge computing, artificial intelligence (AI), and big data analytics have propelled the market even more. Regional players in data centers are adopting automation significantly to maximize operations and lower levels of human error.
For instance, in February 2024, Cisco Systems, Inc. collaborated with NVIDIA Corporation to strengthen its data center solutions by combining AI-enabled networking and automation products. This action is focused on catering to the increasing need for AI workloads and improving power efficiency in contemporary data centers. Furthermore, rigorous data privacy regulations such as the California Consumer Privacy Act (CCPA) and increasing fears regarding cyberattacks are forcing companies to invest in automated surveillance and security solutions. The availability of high-quality skilled resources and research on automation software and services is continuously driving North America's dominance in the market. With rising investments and favorable regulatory conditions, North America is expected to dominate the global data center automation market.
Impact of U.S. Tariffs on the Global Data Center Automation Market
U.S. tariffs on the importation of technology objects such as servers, semiconductors, and network equipment have a multiplier effect on the global data center automation market. Tariffs increase the overall cost of the critical infrastructure required to build and automate data centers, making it costly for businesses and service providers to invest capital. Moreover, trade policy uncertainty raises planning and budgeting challenges for multinational enterprises. Countries are most reliant on U.S. technology and imports are affected most, while others may attempt localization of production or diversification of suppliers to reduce exposure. Overall, the tariffs have forced cost pressures and strategic reappraisals, restrained short-term growth, but potentially fostered regional innovation and supply chain resiliency over the long run.
Key Players Landscape and Outlook
The global data center automation market is competitively driven by several key players who are always innovative to solidify their spot in the market. Some market players aim to incorporate AI, machine learning, and cloud solutions into their data center automation solutions to optimize performance, decrease downtime, and cut operational costs.
For instance, in August 2024, Hewlett Packard Enterprise Development LP acquired Morpheus Data LLC, a hybrid cloud management software company. This strategic acquisition is poised to add HPE's GreenLake platform to the multi-cloud automation, orchestration, and FinOps of Morpheus. The acquisition makes HPE the first vendor to provide a complete array of enterprise-class services across the hybrid cloud stack, empowering customers to simplify IT operations, optimize cloud spend, and speed digital transformation.
Mostly, the organizations are embracing predictive analytics, real-time monitoring, and software-defined infrastructure to increase automation and minimize human intervention. The market is anticipated to grow as more organizations pursue digital transformation and want scalable, secure, and power-efficient automation solutions. With increased data consumption, edge computing, and demands on organizations to operate sustainably, the leading players are estimated to invest more in automation technology, partnerships, and R&D.
All segments will be provided for all regions and countries covered
Companies mentioned above DO NOT hold any order as per market share and can be changed as per information available during research work.