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The data center and network third party hardware maintenance service market size is forecast to increase by USD 3 billion and is estimated to grow at a CAGR of 14.76% between 2023 and 2028. The data center market is experiencing significant growth due to rising spending on digital transformation and increasing demand from global cloud service providers for wholesale colocation. This trend is driven by the ever-growing complexity of data centers, which necessitates more advanced and scalable solutions. Cloud providers require large-scale, highly secure, and reliable infrastructure to support their expanding customer base and complex workloads. As a result, the data center industry is witnessing a surge in demand for colocation services, which enable businesses to lease space and power in a third-party data center to house their IT equipment. This shift towards colocation is expected to continue, as it offers numerous benefits, including cost savings, improved security, and increased flexibility. Overall, the data center market is poised for continued growth, driven by the increasing demand for wholesale colocation from global cloud service providers and the growing complexities of data center infrastructure.
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The Market is witnessing significant growth due to the increasing adoption of IT infrastructure and the need for cost-effective maintenance solutions. OEM maintenance contracts can be expensive, leading organizations to explore third-party maintenance providers. SLAs (Service Level Agreements) ensure uptime and service quality, making third-party maintenance an attractive option. Cloud-based infrastructure and the Internet of Things (IoT) are driving the market, as these technologies require continuous monitoring and maintenance. Skilled technicians from third-party providers offer expertise in various hardware and software platforms. Companies like Park Place Technologies, Cxtec, Service Express, DataSpan, AIMS DATA CENTRE, Equinix, and Computer Data Source are key players in this market. Globalization and hybrid maintenance models are trends in the market, enabling organizations to leverage the benefits of both in-house and third-party maintenance teams. Technological improvements, such as AI and machine learning, are enhancing the capabilities of third-party maintenance providers. However, vendor lock-in and security concerns can be challenges for organizations considering third-party maintenance. Expert panel reviews suggest that the market will continue to grow, with a managed services approach gaining popularity due to its cost-effectiveness and flexibility. Edge computing and technological advancements are expected to further fuel market growth. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Rise in data center spending is notably driving market growth. The global data center and network third-party hardware maintenance market is witnessing significant growth due to the increasing demand for data centers worldwide. This demand is driven by the exponential growth in data traffic from enterprises and individuals, fueled by the adoption of IoT devices and the rise of big data analytics.
Moreover, the Cisco Visual Networking Index indicates that global IP traffic has been on the rise, increasing by over 26% from 2017 to 2022. In North America, consumer IP traffic is projected to triple during the same period, growing at a compound annual growth rate (CAGR) of 23%. These trends underscore the importance of reliable and efficient third-party hardware maintenance services to ensure the optimal performance of data centers and networks. Thus, such factors are driving the growth of the market during the forecast period.
Growth of hyperscale cloud companies is the key trend in the market. The data center and network third-party hardware maintenance service market is witnessing significant growth due to the increasing adoption of hyperscale cloud services. Hyperscale cloud providers, such as Microsoft, Amazon Web Services (AWS), and Google, are investing heavily in establishing their data centers to cater to the surging demand for large-scale data storage.
Moreover, the proliferation of IoT and big data is driving the need for vast storage capacities, leading enterprises to shift their data to cloud storage provided by these hyperscale cloud providers. Storage as a Service (STaaS) offered by these providers is gaining popularity due to its cost-effective nature, better scalability, and high availability. Thus, such trends will shape the growth of the market during the forecast period.
Issues related to data center service outsourcing is the major challenge that affects the growth of the market.
The data center and network third-party hardware maintenance service market is witnessing significant growth due to the advantages offered by these providers, including disaster recovery, data backup, managed power distribution, load balancing, hardware installation, and ongoing maintenance. Large enterprises are increasingly adopting third-party data center services for these benefits.
However, there are challenges associated with outsourcing data center services, one of which is vendor lock-in. This situation arises when a customer is reliant on a specific vendor for services, making it difficult to transition to another provider. This dependency can limit the customer's flexibility and negatively impact their business operations. Hence, the above factors will impede the growth of the market during the forecast period
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Capgemini Service SAS: The company offers data center and network third party hardware maintenance service such as Merlin.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The large enterprises segment is estimated to witness significant growth during the forecast period. The Market is witnessing significant growth due to the increasing reliance on IT infrastructure and the adoption of cloud-based infrastructure and Internet of Things (IoT) technologies. OEMs continue to dominate the market with their Original Equipment Manufacturer (OEM) maintenance contracts, offering Service Level Agreements (SLAs) to ensure optimal performance and security.
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The large enterprises segment was the largest segment and valued at USD 1.43 billion in 2018. However, the globalisation of IT services and the emergence of skilled technicians from third-party providers like Park Place Technologies, Cxtec, Service Express, DataSpan, and AIMS DATA CENTRE, among others, are challenging the traditional OEM maintenance models. Security concerns and technological improvements are driving the need for hybrid maintenance models, which combine both in-house and third-party maintenance services. Hence, such factors are fuelling the growth of this segment during the forecast period.
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North America is estimated to contribute 35% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The Data Center and Network Third Party Hardware Maintenance Service Market encompasses the provision of maintenance and support services for IT infrastructure components, including servers, storage systems, and networking equipment, from OEMs (Original Equipment Manufacturers) or third-party vendors. SLAs (Service Level Agreements) play a crucial role in defining the level of service quality and response time. With the increasing adoption of cloud-based infrastructure and the Internet of Things (IoT), there is a growing demand for skilled technicians to manage and maintain these complex systems. Hence, such factors are driving the market in North America during the forecast period.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
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The Market is witnessing significant growth due to the increasing adoption of IT infrastructure and the need for reliable maintenance services. With the rise of cloud-based infrastructure and the Internet of Things (IoT), the demand for skilled technicians to manage and maintain complex hardware systems is increasing. OEMs (Original Equipment Manufacturers) offer maintenance contracts, but many organizations are turning to third-party providers for more flexible SLAs (Service Level Agreements) and cost savings. Companies like Park Place Technologies, Cxtec, Service Express, DataSpan, AIMS DATA CENTRE, Equinix, Computer Data Source, and others are leading players in this market. Globalization and the need to avoid vendor lock-in are driving the adoption of third-party maintenance services.
However, security concerns and technological improvements are also influencing the market. Hybrid maintenance models, managed services approach, and edge computing are emerging trends. Expert panel reviews and analyst support are essential for investors and industry players seeking strategic foresight and development in this market. Company expansions and acquisitions are common strategies for leading players to stay competitive in the value chain. The market landscape depends on the In-house maintenance team, Assurance of Service Quality, Valuation, and Market landscape. The market is also impacted by digital transformation, technological innovation, consumer preferences, and strategic market entry. Agility and cutting-edge technologies are key factors for success in this dynamic market.
Market Scope |
|
Report Coverage |
Details |
Page number |
149 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 14.76% |
Market growth 2024-2028 |
USD 3 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
12.55 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 35% |
Key countries |
US, China, UK, Germany, and Japan |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Capgemini Service SAS, Cisco Systems Inc., Dell Technologies Inc., Equinix Inc., Fujitsu Ltd., HCL Technologies Ltd., Hewlett Packard Enterprise Co., Hitachi Ltd., Huawei Technologies Co. Ltd., International Business Machines Corp., Kyndryl Inc., Larsen and Toubro Ltd., Lenovo Group Ltd., Nlyte Software Ltd., Nokia Corp., NTT Communications Corp., Schneider Electric SE, Siemens AG, Sify Technologies Ltd., and Vertiv Holdings Co. |
Market dynamics |
Parent market analysis, market report , market forecast , Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
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