Global Data Center Renovation Market Report and Forecast 2026-2034

Study Period

2020-2034

Market (2025)

USD 22.19 Billion

Market (2034)

USD 68.22 Billion

CAGR

13.29%

Major Markets Players

Schneider Electric, Vertiv, Eaton Corporation, ABB Ltd., Dell Technologies and Others

Data Center Renovation Market Report (2026-2034)

Key Highlights

• The Data Center Renovation Market, valued at USD 22.19 billion in 2025, is projected to reach USD 68.22 billion by 2034, registering a CAGR of 13.29% from 2026 to 2034.
• AI-powered design optimization and predictive analytics transforming renovation planning and execution across Data Center Renovation projects
• Capacity expansion dominates applications with 39% share; hybrid deployment models gaining prominence
• North America leads with 43% regional share; Asia-Pacific fastest-growing at 15.9% CAGR

Data Center Renovation Market Size & Forecast (2026–2034)

Data Center Renovation encompasses comprehensive modernization services including power infrastructure upgrades, cooling system optimization, IT equipment refresh cycles, energy efficiency improvements, and physical security enhancements for existing facilities. This market addresses critical imperatives as 60% of global data centers exceed 10 years of operation, with infrastructure originally designed for 3-5 kW racks struggling to support modern 15-25 kW GPU-intensive workloads.

The Data Center Renovation industry serves hyperscale operators like Microsoft and Google modernizing legacy campuses, colocation providers including Equinix and Digital Realty upgrading customer-facing infrastructure, enterprise organizations refreshing on-premise facilities, and government agencies modernizing public sector computing environments. Distribution channels encompass engineering, procurement, and construction (EPC) contractors, infrastructure equipment vendors, facilities management consultants, and specialized renovation service providers.

Recent developments highlight market acceleration: Schneider Electric partnered with Turner Construction in March 2025 to deliver turnkey renovation solutions integrating prefabricated modular components, reducing project timelines by 35%. Vertiv launched PowerReno™ in February 2025, a containerized power distribution system enabling live-facility upgrades without service interruptions. Government initiatives are catalyzing demand: the U.S. Federal Data Center Optimization Initiative mandates 25% energy reduction by 2027, requiring extensive retrofits across 1,200+ federal facilities. Singapore's Green Plan 2030 offers 50% tax incentives for data center energy efficiency improvements, while the EU's Energy Efficiency Directive imposes penalties for facilities exceeding 1.3 PUE, compelling widespread Data Center Renovation investments.

What is the Impact of AI in the Data Center Renovation Market?

AI transforms Data Center Renovation through intelligent space planning, computational fluid dynamics modeling, and predictive renovation sequencing, reducing design cycles by 45% while optimizing capacity layouts that maximize power and cooling efficiency, enabling operators to increase rack densities by 50-70% within existing footprints.

A few projects undertaken by companies in terms of AI that benefit Data Center Renovation Market are:

• Schneider Electric's EcoStruxure Renovation Advisor: Deploys machine learning algorithms analyzing facility sensor data, energy consumption patterns, and equipment age to generate prioritized renovation roadmaps, identifying optimal upgrade sequences that minimize service disruptions while maximizing ROI across Data Center Renovation projects, reducing planning timelines from 6 months to 3 weeks.
• Siemens Digital Twin for Facility Modernization: Utilizes AI-powered virtual modeling to simulate renovation scenarios before physical implementation, testing hundreds of cooling, power, and layout configurations to identify optimal designs achieving target PUE reductions while maintaining 99.999% uptime during Data Center Renovation execution phases, preventing costly design errors.
• Johnson Controls' OpenBlue Renovation Intelligence: Implements computer vision and IoT analytics to create comprehensive facility assessments, automatically identifying infrastructure deficiencies, space optimization opportunities, and energy waste sources, generating detailed Data Center Renovation specifications with 92% accuracy compared to traditional manual assessments requiring months of engineering analysis.

Data Center Renovation Market Dynamics

Aging Infrastructure Reaching Critical Lifecycle Endpoints

Approximately 58% of operational data centers worldwide were constructed before 2015, with infrastructure components approaching or exceeding manufacturer-recommended replacement cycles. Power distribution units, cooling systems, and raised floor architectures designed for 3-7 kW rack densities cannot accommodate modern GPU servers requiring 25-40 kW per rack. Legacy facilities face cascading failures as aging electrical switchgear (typical 25-year lifespan) reaches critical wear thresholds, while outdated Computer Room Air Conditioning (CRAC) units consume 2.5-3x more energy than contemporary systems.

The Data Center Renovation market addresses urgent reliability concerns as equipment failures cost operators USD 740,000 per hour in downtime, with aging infrastructure causing 45% of unplanned outages. Organizations confronting USD 800 million-1.2 billion costs for new facility construction increasingly opt for USD 200-400 million renovation investments that extend existing asset lifecycles 15-20 years while delivering comparable performance improvements through modernized power, cooling, and monitoring infrastructure.

Service Continuity Requirements During Live-Facility Upgrades

Executing Data Center Renovation projects within operational facilities presents extraordinary challenges as customers demand 99.99%+ uptime guarantees. Electrical infrastructure upgrades require complex phased implementations isolating power distribution paths without disrupting active workloads, while cooling system replacements must maintain environmental conditions within ASHRAE specifications throughout construction periods.

Traditional renovation approaches necessitate 30-60% capacity reductions during 12-18 month project timelines, resulting in USD 15-25 million revenue losses for colocation providers. Technical complexities multiply when integrating modern building management systems with legacy infrastructure lacking standardized protocols, requiring custom middleware development adding 25-35% to project costs. Risk-averse enterprises delay critical renovations indefinitely rather than accept service disruption exposure, perpetuating inefficient operations and limiting competitiveness against modernized competitors.

Sustainability Retrofits Unlocking Regulatory Incentives and Carbon Credits

Corporate carbon neutrality commitments and expanding regulatory frameworks are creating substantial Data Center Renovation opportunities focused on energy efficiency and renewable energy integration. Operators implementing comprehensive efficiency retrofits—upgrading to free cooling systems, LED lighting, and intelligent power management—achieve 35-50% energy consumption reductions generating USD 8-12 million annual savings for mid-scale facilities.

Regulatory programs amplify returns: the U.S. Investment Tax Credit provides 30% cost recovery for renewable energy installations, Singapore's Energy Efficiency Fund offers 50% subsidies for cooling optimization projects, and EU carbon trading mechanisms value emissions reductions at USD 85-110 per metric ton. Forward-thinking operators monetize sustainability improvements through Renewable Energy Certificates and carbon offset sales generating USD 3-7 million additional annual revenue while enhancing corporate ESG ratings that improve investor valuations by 12-18% according to MSCI research.

Modular and Prefabricated Solutions Accelerating Project Timelines

The Data Center Renovation industry is embracing factory-built modular infrastructure components that dramatically reduce on-site construction duration and complexity. Prefabricated electrical distribution modules, containerized cooling systems, and pre-engineered containment solutions arrive site-ready with 95% completion, requiring only final connections versus traditional stick-built approaches involving months of field fabrication.

Modular methodologies compress typical 18-24 month renovation timelines to 8-12 months while reducing labor costs 30-40% through factory automation. These solutions enable live-facility upgrades by allowing parallel off-site manufacturing during planning phases and rapid installation during brief maintenance windows. Early adopters report 50% reduction in project risk exposure and 25% lower total cost of ownership compared to conventional renovation approaches, driving widespread industry adoption as vendors including Schneider Electric, Vertiv, and ABB expand modular product portfolios targeting renovation-specific applications.

How is the Data Center Renovation Market Segments Defined?

By Deployment Mode

• On-Premise Deployment
• Cloud-Based Deployment
• Hybrid Deployment

Hybrid deployment dominates the Data Center Renovation segment with approximately 47% market share, reflecting enterprises modernizing on-premise infrastructure while simultaneously migrating workloads to cloud platforms. Organizations adopt hybrid architectures to balance data sovereignty requirements, latency-sensitive applications, and cloud scalability, necessitating facility renovations that support seamless cloud integration through enhanced network connectivity, edge computing capabilities, and unified management platforms. Hybrid renovations enable gradual modernization strategies minimizing disruption and capital concentration risks.

By Application:

• Capacity Expansion & Power Upgrades
• Cooling Optimization & Thermal Management
• IT Asset Modernization
• Energy & Sustainability Optimization
• Security & Facility Monitoring Improvements

Capacity expansion and power upgrades command the Data Center Renovation market with 39% application share, driven by urgent demands to accommodate high-density AI and machine learning workloads. Legacy facilities designed for 3-7 kW racks require comprehensive electrical infrastructure renovations—upgraded PDUs, bus bars, and UPS systems—supporting 15-25 kW densities. Power renovation projects typically cost USD 800-1,500 per kW but enable 2-3x capacity increases within existing real estate, delivering superior economics versus new construction requiring USD 10-15 million per MW.

Data Center Renovation Industry: Regional Insights

Geographic Coverage: North America, Europe, Asia-Pacific, Latin America, The Middle East & Africa

North America dominates the Data Center Renovation market with 43% regional share, anchored by the United States' extensive legacy data center inventory requiring modernization. The region hosts over 2,900 facilities built before 2015 facing aging infrastructure challenges, while hyperscale operators including Microsoft, Google, and AWS invest USD 45-60 billion annually modernizing campuses to support AI workloads.

Asia-Pacific exhibits the fastest growth at 15.9% CAGR, driven by Singapore's stringent efficiency mandates, China's digital infrastructure modernization initiatives, and India's enterprise data center refresh cycles, where Data Center Renovation investments accelerate amid government sustainability programs and escalating power costs requiring urgent efficiency improvements across rapidly expanding digital economies.

How does the Future Outlook of the Data Center Renovation Market (2034) Appear?

• Sustained Growth: The Data Center Renovation market maintains robust 13.29% CAGR through 2034, fueled by aging infrastructure lifecycles, AI workload power density demands, sustainability mandates, and economic advantages of modernizing existing assets versus costly greenfield construction alternatives.
• Technological Upgrade: Prefabricated modular components, AI-powered design tools, digital twin simulation, and robotic installation systems transform Data Center Renovation into streamlined, low-risk processes achieving 40% faster timelines while maintaining zero-downtime operations throughout complex facility upgrades.
• Future Opportunities: AI will revolutionize Data Center Renovation through autonomous facility assessment, predictive maintenance scheduling, and generative design algorithms that continuously optimize renovation planning, enabling operators to maximize infrastructure performance while minimizing disruption and capital expenditure across facility lifecycles.

What Does Our Data Center Renovation Market Research Study Entail?

• The Data Center Renovation Market Research Report highlights the forecast growth rate (CAGR of 13.29%) by anticipating the market size reaching USD 68.22 billion by 2034 from USD 22.19 billion in 2025.
• The market analysis & market scope sheds light upon the primary industry trends including aging infrastructure modernization, AI workload accommodation, sustainability compliance, modular construction adoption, and live-facility upgrade methodologies driving the Data Center Renovation sector forward.
• The Data Center Renovation Market Research Report entails details about the most critical shifts in market share across North America (43%), Asia-Pacific (fastest-growing at 15.9% CAGR), and Europe's regulatory-driven renovation investment patterns.
• Considering the statistics & developments by primary market competitors including Schneider Electric, Vertiv, Eaton Corporation, ABB Ltd., Siemens, Johnson Controls, and others, our report demonstrates the most sought-after strategies encompassing modular solutions, AI-powered planning tools, zero-downtime methodologies, and sustainability-focused innovations.