Data Center Renovation Market

Data Center Renovation Market Synopsis

The Global Data Center Renovation Market was valued at USD 16.1 billion in 2023 and is expected to grow from USD 18.3 billion in 2024 to USD 57.4 billion by 2033, reflecting a CAGR of 13.0% over the forecast period.

The market for renovating data centers is growing rapidly as businesses update their infrastructure to keep up with the latest digital trends. Because of improvements in cloud computing, artificial intelligence and applications that handle a lot of data, many facilities are being upgraded. Renovations are typically done to save energy, increase security measures and comply with all regulations. Sustainability matters and companies are adopting more efficient cooling tools, energy-saving systems and automation to both save money and be more environmentally friendly. More use of data worldwide is prompting businesses and governments to pay more attention to modernizing their data centers to ensure they don’t lose performance, stability and scalability.

Data Center Renovation Market Driver Analysis

Growing Data Volume and Workloads

Improving real-time data processing is becoming a key reason why data centers need refurbishment. Since it is a digital economy, businesses in financial services, health care, e-commerce and manufacturing use real-time data analysis to have an edge, improve for their customers and take important decisions. Conventional data centers, set up for dealing with static jobs, frequently do not have the pace, flexibility or responsiveness needed now for AI, machine learning, IoT and edge computing. Hence, companies are brought to add newer and more capable components to their data centers such as advanced network switches, better storage systems and enhanced CPU units.

Data Center Renovation Market Restraint Analysis

Operational Downtime Risks

Working to upgrade data centers while they are active can be quite challenging as downtime risks arise. Since data and digital services are always needed for business functions, any interruption of just a few minutes can damage sales, upset clients or cause workflow delays. During renovations, swapping hardware, cooling systems or power infrastructure may interrupt some services or mean systems have to be turned off. The reasons outlined above mean many businesses are careful about renovating, especially when it concerns live setups where being reliable is very important. Thus, organizations sometimes choose not to upgrade right away, even though the long-term rewards are great, because they are worried about short-term interruptions during implementation.

Data Center Renovation Market Opportunity Analysis

Edge and Hybrid Data Center Expansion

The increase in edge computing is providing new chances for updating and upgrading many small, distributed data center sites. With edge computing, data is managed near the place (IoT devices, sensors or users) where it is generated, making the process quicker and more responsive in real time. This calls for adapting today’s smaller centers or erecting additional micro data centers in such places as retail outlets, factories or downtown areas. network connectivity, better power and cooling and advanced security are the main points of renovation for these areas.

Data Center Renovation Market Trend Analysis

Adoption of Liquid Cooling and Advanced Thermal Solutions

New methods of cooling are being introduced when data centers are renovated to help cope with the increased heat from dense computer systems. Old cooling systems often fail to control the temperature of modern, powerful data centers which raises energy bills and increases the risk of hardware failures. People are using methods such as liquid cooling, immersion cooling and separating hot and cold areas in the data center to address this. They make heat dissipation more efficient and accurate which leads to using less energy and boosting the system’s reliability and performance.

Data Center Renovation Market Segment Analysis:

The Data Center Renovation Market is segmented on the basis of Product, Data Center, and End-Use.

By Product

o   Power

o   Cooling

o   IT racks & enclosures

o   LV/MV distribution

o   Networking equipment

o   DCIM

By Data Center

o   Extruding

o   Rolling

o   Drawning

o   Forging

o   Casting

By End-Use

o   BFSI

o   Healthcare

o   Government

o   IT & telecom

o   Other End-Uses

By Region

o   North America (U.S., Canada, Mexico)

o   Eastern Europe (Bulgaria, The Czech Republic, Hungary, Poland, Romania, Rest of Eastern Europe)

o   Western Europe (Germany, UK, France, Netherlands, Italy, Russia, Spain, Rest of Western Europe)

o   Asia Pacific (China, India, Japan, South Korea, Malaysia, Thailand, Vietnam, The Philippines, Australia, New-Zealand, Rest of APAC)

o   Middle East & Africa (Turkey, Bahrain, Kuwait, Saudi Arabia, Qatar, UAE, Israel, South Africa)

o   South America (Brazil, Argentina, Rest of SA)

By Product, Networking Equipment Segment is Expected to Dominate the Market During the Forecast Period

Of the products discussed in this research study, the Networking equipment segment is expected to account for the largest market share of data center renovation market in the forecast period. When companies begin to rely on cloud computing, edge computing and artificial intelligence, they need a strong network that can process much data efficiently. Improving routers, switches and firewalls is necessary to support such workloads and make sure data moves smoothly throughout the network. In addition, more people using virtual methods for work, meetings and app use has highlighted how key network quality is.

By Data Center, the Networking Equipment Segment is Expected to Held the Largest Share

The networking equipment segment is likely to dominate the market. Hyperscale data centers from Amazon, Microsoft, Google and Meta are set up to manage huge amounts of processing and storage tasks. It is necessary to keep upgrading these systems regularly to ensure their performance, energy use and scalability continue as the amount of data increases and new technologies such as AI, machine learning and big data analytics become used more often. Because of how big and involved hyperscale operations are, they spend significant sums upgrading their power, cooling and networking equipment for best results and sustainability.

By End-Use, the IT & telecom Segment is Expected to Held the Largest Share

By end-use, the IT & telecom segment is expected to hold the largest share of the data center renovation market during the forecast period. The sector remains strong because it needs to keep up with cloud computing, mobile data, 5G and upcoming AI and IoT. Because people are using more data now than ever, IT and telecom organizations have to update their data centers often to maintain low delays, consistent service and strong security.

Data Center Renovation Market Regional Insights:

North America is Expected to Dominate the Market Over the Forecast period 

North America is poised to maintain its dominance in the global data center renovation market throughout the forecast period, driven by a confluence of technological, economic, and infrastructural factors. The US is a major leader because of its large number of hyperscale data centers and strong IT infrastructure. Large technology companies such as Amazon, Microsoft, Google and Facebook being based there add further strength to the region’s leadership. A standard for innovation and increased tech development has often resulted in a rise of projects focusing on newer data center technologies. The increasing interest in artificial intelligence (AI), machine learning (ML) and cloud computing in the U.S. has boosted the process of modernizing data centers. High-tech applications run by AI require modern data center features, new hardware, large computing clusters and improved cooling systems.

Recent Development

·       In March 2025, Nokia partnered with Maxis to enhance its data centers in Malaysia by deploying 7220 Interconnect Routers and implementing event-driven automation. This collaboration aligns with Malaysia's expanding data center market and reinforces Nokia's commitment to developing AI-driven infrastructure solutions.

·       In January 2025, The City of Mortágua in Portugal announced a USD 185,000 investment to upgrade its municipal data center. This renovation is focused on boosting computing capacity, expanding storage capabilities, and enhancing disaster recovery protocols. The initiative aims to deliver faster system response times and improve cybersecurity resilience, ensuring more robust and efficient digital services for the municipality.

Active Key Players in the Data Center Renovation Market

o   Siemens

o   Cisco Systems

o   Johnson Controls

o   Microsoft

o   Legrand

o   Dell Technologies

o   Schneider Electric

o   Google

o   ABB

o   Emerson Electric

o   Eaton

o   Hewlett Packard Enterprise

o   IBM

o   Honeywell

o   Vertiv

o   Other Key Players

Global Data Center Renovation Market Scope