Data Center Equipment Market Overview
Data Center Equipment Market Size was estimated at 64.2 (USD Billion) in 2023. The Data Center Equipment Market industry is expected to grow from 71.2 (USD Billion) in 2024 to 228.6 (USD Billion) by 2032. The Data Center Equipment Market CAGR (growth rate) is expected to be around 15% during the forecast period (2024 - 2032).
Key Data Center Equipment Market Trends Highlighted
The data center equipment market exhibits a dynamic landscape driven by several key trends. The increasing adoption of cloud computing and digital infrastructure is a major driver, as cloud providers and enterprises expand their data centers to meet growing data storage and processing demands. Additionally, the proliferation of IoT devices and the growth of data-intensive applications are further fueling the demand for data center equipment.
Key market opportunities lie in the exploration of energy-efficient and sustainable data center technologies to address environmental concerns. The adoption of artificial intelligence (AI) and machine learning (ML) techniques in data center management is expected to enhance efficiency and performance. Furthermore, the integration of renewable energy sources into data center operations presents significant opportunities for cost reduction and environmental sustainability.
Recent trends in the data center equipment market include the growing popularity of modular designs for data center infrastructure, offering flexibility and scalability. The convergence of networking and computing technologies, known as hyperconverged infrastructure (HCI), is another notable trend, enabling simplified data center management and improved performance. The adoption of software-defined data centers (SDDC) is also gaining traction, providing greater control and automation over data center operations.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Data Center Equipment Market Drivers
Growing Demand for Cloud and Edge Computing
The proliferation of cloud and edge computing is driving the demand for data center equipment. Cloud computing offers businesses a scalable and cost-effective way to store and process data, while edge computing brings computing power closer to the end-user, reducing latency and improving performance. The increasing adoption of these technologies is expected to continue to fuel the growth of the data center equipment market in the coming years.The demand for data center equipment is also being driven by the increasing adoption of artificial intelligence (AI) and machine learning (ML).
These technologies require massive amounts of data to train and operate, which is driving the need for more powerful and efficient data center equipment.Additionally, the growing adoption of the Internet of Things (IoT) is also contributing to the demand for data center equipment. IoT devices generate vast amounts of data that need to be stored and processed, which is driving the need for more data center capacity.Overall, the growing demand for cloud and edge computing, AI/ML, and IoT is expected to continue to drive the growth of the Data Center Equipment Market in the coming years.
Increasing adoption of hyperscale data centers
Hyperscale data centers are large-scale data centers that house thousands of servers and provide massive computing power. These data centers are typically operated by large cloud providers, such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform.The increasing adoption of hyperscale data centers is driven by the growing demand for cloud computing and other data-intensive applications. Hyperscale data centers offer businesses a number of advantages, including scalability, cost-effectiveness, and energy efficiency.The growing adoption of hyperscale data centers is expected to continue to drive the growth of the Data Center Equipment Market, as these data centers require significant amounts of equipment, including servers, storage, and networking gear.
Government initiatives to promote data center development
Governments around the world are increasingly recognizing the importance of data centers to their economies. As a result, many governments are implementing initiatives to promote the development of data centers in their countries.These initiatives include providing financial incentives, such as tax breaks and grants, to data center operators. Governments are also investing in infrastructure projects, such as fiber optic networks, to support the development of data centers.Government initiatives to promote data center development are expected to continue to drive the growth of the Data Center Equipment Market in the coming years.
Data Center Equipment Market Segment Insights
Data Center Equipment Market Component Insights
The market growth is attributed to the rising adoption of cloud computing, big data analytics, and the Internet of Things (IoT) applications, leading to an increase in data center infrastructure investments. The component segment of the data center equipment market encompasses various elements crucial for the efficient operation of data centers. Servers, constituting a significant portion of the market, are responsible for processing, storing, and managing data. Storage systems, including hard disk drives (HDDs), solid-state drives (SSDs), and storage area networks (SANs), play a vital role in data storage and retrieval.
Network equipment, comprising routers, switches, and firewalls, ensures seamless data transmission within the data center and enables connectivity to external networks. Power and cooling equipment, including uninterruptible power supplies (UPSs), generators, and cooling systems, safeguards data center operations from power outages and overheating. Software and services, encompassing operating systems, virtualization software, and management tools, provide comprehensive support for data center infrastructure management and optimization. The increasing demand for high-performance computing (HPC) and artificial intelligence (AI) applications is driving the growth of the server segment.
Storage systems are witnessing continuous advancements with the adoption of NVMe (Non-Volatile Memory Express) technology and the proliferation of all-flash arrays, catering to the growing need for faster data access. Network equipment is evolving with the adoption of software-defined networking (SDN) and network function virtualization (NFV), enabling greater flexibility and scalability in data center networks. Power and cooling equipment is becoming more efficient with the integration of renewable energy sources and advanced cooling technologies, reducing operational costs and environmental impact.
Software and services are gaining traction due to the growing need for data center automation, management, and security. The adoption of cloud-based data center management solutions is simplifying operations and reducing IT expenses.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Data Center Equipment Market Form Factor Insights
Among the form factors of data center equipment, rack-mounted equipment held a dominant market share in 2023 and is projected to continue to lead the market through 2032. The rising adoption of rack-mounted servers is primarily attributed to their space optimization and scalability advantages. Blade servers, with their compact design and high-density computing capabilities, are also gaining traction, especially in high-performance computing environments. Tower servers, while traditionally popular, are now primarily used in small-scale deployments or edge computing applications.
Microservers, designed for low-power and space-constrained deployments, are expected to witness significant growth in the coming years. Other form factors, such as modular and containerized data centers, are also gaining momentum due to their flexibility and scalability benefits.
Data Center Equipment Market Deployment Model Insights
The Data Center Equipment Market segmentation by deployment model comprises on-premises, colocation, and cloud. Among these, the on-premises segment held the largest market share in 2023, accounting for around 60%. This dominance is attributed to the high adoption of on-premises data centers by enterprises seeking greater control over their IT infrastructure and data security. However, the colocation segment is anticipated to witness the fastest growth rate during the forecast period, owing to the increasing demand for cost-effective and scalable data center solutions.
The cloud segment is also expected to grow steadily, driven by the rising adoption of cloud computing services and the need for cloud-based data storage and processing capabilities. The Data Center Equipment Market revenue from the deployment model segment is projected to reach USD 295.6 billion by 2024, exhibiting a CAGR of 8.9% from 2023 to 2032.
Data Center Equipment Market Vertical Insights
The Data Center Equipment Market is segmented by vertical into IT and Telecom, Banking and Finance, Government and Public Sector, Healthcare, Manufacturing, Retail, and Other. The IT and Telecom segment is the largest vertical in the Data Center Equipment Market, accounting for over 30% of the total market revenue in 2023. The growth of this segment is driven by the increasing demand for data center equipment from cloud service providers, telecommunications companies, and internet service providers. The Banking and Finance segment is the second-largest vertical in the Data Center Equipment Market, accounting for over 20% of the total market revenue in 2023.
The growth of this segment is driven by the increasing demand for data center equipment from banks, insurance companies, and other financial institutions. The Government and Public Sector segment is the third-largest vertical in the Data Center Equipment Market, accounting for over 15% of the total market revenue in 2023. The growth of this segment is driven by the increasing demand for data center equipment from government agencies and public sector organizations. The Healthcare segment is the fourth-largest vertical in the Data Center Equipment Market, accounting for over 10% of the total market revenue in 2023.
The growth of this segment is driven by the increasing demand for data center equipment from hospitals, clinics, and other healthcare providers. The Manufacturing segment is the fifth-largest vertical in the Data Center Equipment Market, accounting for over 5% of the total market revenue in 2023. The growth of this segment is driven by the increasing demand for data center equipment from manufacturers. The Retail segment is the sixth-largest vertical in the Data Center Equipment Market, accounting for over 5% of the total market revenue in 2023.
The growth of this segment is driven by the increasing demand for data center equipment from retailers. The Other segment includes all other verticals not specifically mentioned above, accounting for over 5% of the total market revenue in 2023. The growth of this segment is driven by the increasing demand for data center equipment from various industries and sectors.
Data Center Equipment Market Regional Insights
The Data Center Equipment Market is segmented into North America, Europe, APAC, South America, and MEA. Among these regions, North America is expected to hold the largest market share in 2023, owing to the presence of major data center operators and the increasing adoption of cloud and edge computing services. Europe is expected to follow North America, driven by the growing demand for data centers from various industries such as BFSI, healthcare, and manufacturing. APAC is expected to witness the highest growth rate during the forecast period, owing to the increasing investments in data center infrastructure by governments and enterprises in countries such as China, India, and Japan.
South America and MEA are expected to account for a smaller share of the market, but are expected to grow steadily over the forecast period.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Data Center Equipment Market Key Players And Competitive Insights:
Major players in Data Center Equipment Market are continuously focusing on developing innovative technologies and expanding their product portfolios to maintain their competitive edge. The market is characterized by intense competition, with leading Data Center Equipment Market players engaging in strategic partnerships, acquisitions, and collaborations to strengthen their position. Leading companies aim to enhance their product offerings, expand their geographic reach, and cater to evolving customer demands to maintain their competitive advantage. Ongoing developments in the Data Center Equipment Market are driven by factors such as increasing demand for data storage and processing capabilities, advancements in cloud and virtualization technologies, and growing adoption of artificial intelligence (AI) and machine learning (ML) applications.
A leading company in the Data Center Equipment Market, Dell Technologies, has a strong presence globally and offers a comprehensive portfolio of data center products and solutions. The company's expertise in server, storage, and networking technologies enables it to provide integrated solutions to meet diverse customer requirements. Dell Technologies places emphasis on innovation, investing in research and development to deliver advanced technologies that address emerging industry trends. The company's focus on customer satisfaction and its extensive partner ecosystem contribute to its leading position in the market.
Another notable competitor in the Data Center Equipment Market, Hewlett Packard Enterprise (HPE), holds a significant market share and offers a wide range of data center infrastructure solutions. HPE's focus on delivering agile, efficient, and secure data center environments has earned it a strong reputation in the industry. The company's portfolio includes servers, storage systems, networking equipment, and software, allowing it to meet the diverse needs of customers across various sectors. HPE's commitment to sustainability and its ability to provide tailored solutions have helped it maintain a competitive position in the market.
Key Companies in the Data Center Equipment Market Include:
Data Center Equipment Market Developments
The data center equipment market is projected to grow from USD 276.05 billion in 2023 to USD 570.0 billion by 2032, at a CAGR of 8.39% during the forecast period. The growth of the market is attributed to the increasing demand for data centers due to the rising adoption of cloud computing, big data, and artificial intelligence (AI) technologies. The growing need for data storage and processing capabilities is also driving the market growth.
Recent developments in the market include the launch of new products and solutions by key players, such as the introduction of AI-powered data center management solutions and liquid cooling technologies. Partnerships and collaborations between market participants are also shaping the competitive landscape. For instance, in 2023, Vertiv and Schneider Electric announced a partnership to offer integrated data center solutions.
Emerging trends in the market include the adoption of edge computing, which is driving the demand for smaller and more efficient data center equipment. The increasing focus on sustainability is also leading to the adoption of energy-efficient and environmentally friendly solutions. Overall, the data center equipment market is expected to continue its growth trajectory in the coming years, supported by the increasing demand for data storage and processing capabilities and the adoption of innovative technologies.
Data Center Equipment Market Segmentation Insights
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Data Center Equipment Market Component Outlook
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Data Center Equipment Market Form Factor Outlook
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Rack-Mounted Equipment
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Blade Servers
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Tower Servers
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Microservers
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Other
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Data Center Equipment Market Deployment Model Outlook
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On-Premises
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Colocation
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Cloud
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Data Center Equipment Market Vertical Outlook
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Data Center Equipment Market Regional Outlook
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North America
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Europe
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South America
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Asia Pacific
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Middle East and Africa
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Report Attribute/Metric
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Details
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Market Size 2023
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64.2 (USD Billion)
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Market Size 2024
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71.2 (USD Billion)
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Market Size 2032
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228.6 (USD Billion)
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Compound Annual Growth Rate (CAGR)
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15% (2024 - 2032)
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Report Coverage
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Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
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Base Year
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2023
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Market Forecast Period
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2024 - 2032
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Historical Data
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2019 - 2023
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Market Forecast Units
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USD Billion
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Key Companies Profiled
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Siemens, Emerson Electric Co., S Electric, Schneider Electric, Dell Technologies, IBM, General Electric, Eaton, ABB, Emerson Electric, Hewlett Packard Enterprise, Rittal, Vertiv, Cisco Systems, Huawei Technologies
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Segments Covered
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Component, Form Factor, Deployment Model, Vertical, Regional
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Key Market Opportunities
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AIpowered data center management Edge computing infrastructure expansion Growing demand for cloud and colocation services Proliferation of IoT devices Advancements in liquid cooling solutions
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Key Market Dynamics
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Cloud computing adoption Rising demand for data storage Technological advancements Increasing focus on energy efficiency Growing need for colocation services
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Countries Covered
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North America, Europe, APAC, South America, MEA
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Frequently Asked Questions (FAQ) :
The Data Center Equipment Market is estimated to be around USD 71.2 billion in 2024.
The Data Center Equipment Market is projected to grow at a CAGR of approximately 15% from 2023 to 2032.
North America is anticipated to dominate the Data Center Equipment Market throughout the forecast period.
Factors such as increasing demand for cloud and edge computing, proliferation of data centers, and advancements in artificial intelligence and machine learning are propelling market growth.
Data center equipment finds applications in various sectors, including IT and telecommunications, BFSI, healthcare, and manufacturing.
Leading players in the Data Center Equipment Market include Dell Technologies, Hewlett Packard Enterprise, Cisco Systems, and Schneider Electric.
The Data Center Equipment Market is projected to reach approximately USD 228.6 billion by 2032.
Trends like the adoption of hyperscale data centers, the integration of renewable energy sources, and the rise of edge computing are shaping the market landscape.
The Asia Pacific region is expected to exhibit the highest growth rate in the Data Center Equipment Market.
Challenges include supply chain disruptions, geopolitical uncertainties, and the need for skilled professionals.
