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The data center rack market size is forecast to increase by USD 2.08 billion, at a CAGR of 12.66% between 2023 and 2028. The growth of the market depends on several factors, including increasing investments, growth of big data, and emerging containerized and micro-mobile type facility. Some of the ongoing trends in the market include the growing need for edge computing, implementation of SDDCs, and consolidation. The market witnesses the presence of established players, which together capture the largest share of the global market. companies compete based on parameters such as R&D, technological innovations, strategic collaborations, M&A, market expansion activities, and investments. Competition among the companies is increasing, as most of them are offering a similar portfolio. To remain competitive in the market, companies are not only developing modern technologies but also focussing on solving challenges such as insufficient allocation of the IT budget, which is expected to drive market growth.
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The data center rack market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
One of the major reasons for the growth of the server rack market segment is the increasing need for servers and storage devices from enterprises to support significant trends such as big data analytics. The need for the development of highly efficient server systems is increasing to support extremely fast processing speeds and extensive data efficiently. This would increase investments in big data analytics. As a result, there will be an inherent need to integrate HPC with big data analytics. Consequently, the demand for servers and storage systems would rise.
The server rack segment was valued at USD 1.53 billion in 2018. Another major factor driving the growth of the server rack segment is the increasing adoption of cloud-based services such as cloud computing. Since firms are unable to incur the high initial investments that are required to install an HPC system on-premise, they are now focusing on adopting an HPC-as-a-service as their IT model. Clearly, the rising adoption of the cloud model significantly increases the number of server units installed, as it will be the backbone of the cloud infrastructure. Therefore, as the demand for HPC-as-a-cloud service increases, the need for server racks will rise. Therefore, the abovementioned factors will drive segment growth during the forecast period.
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APAC is estimated to contribute 29% to the growth during the forecast year. Technavio's analysts have provided extensive insight into data center rack market forecasting, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period. Another region offering significant growth opportunities to companies is North America. The primary reason for this dominance is the increasing number of establishments which resulted in the demand for data center IT infrastructure, network equipment, and other devices.
Furthermore, the construction of new centers and the renovation of the existing ones in the US will make the country the largest contributor of revenue share to the regional market. New constructions also include the establishment of colocation facilities. Through these facilities, many SMEs can opt for infrastructure that suits their business requirements. Additionally, several service providers and enterprises have announced their expansion plans, which will also fuel the growth of the market. Hence, these factors will drive the market in the region during the forecast period.
The market is propelled by increasing data center investments and the growing demand for data center whitespace to accommodate server density. Key drivers include the need for data center optimization and the deployment of high-density servers to support mission-critical applications. Trends in the market include the adoption of specialized enclosures and rack infrastructure to enhance cooling systems and cable management. Additionally, the rise of cloud technologies is driving the deployment of data center racks to support network services. However, challenges such as ventilation and maintaining optimal server density pose hurdles for data center operators. Ensuring efficient cooling systems and effective cable management in computing spaces are critical to overcoming these challenges and meeting the demands of high-density data processing environments.
Our researchers studied the market research and growth data for years, 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.
The exponential growth of data has made data centers a crucial component of any organization, prompting numerous companies to either construct their own data centers or rent space in them. The surge in demand for cloud computing is expected to further escalate the need for data centers, increasing new data center constructions. Various companies have already begun investing in building new data centers, with some examples provided below:
Increasing investments in constructing data centers suggest a growing need for servers and storage devices, which is expected to fuel the expansion of data center rack market growth.
There are several compelling reasons why enterprises should consider embarking on data center consolidation initiatives, such as lowering costs and acquiring other companies. Consolidation can result in significant cost savings of up to 30%, a reduction in power consumption by 55%, a 35% enhancement in security, and a 50% increase in efficiency. In the United States, the federal government is actively engaged in consolidating data centers to reduce operating expenses and shift investments toward a more efficient computing platform.
Moreover, by consolidating servers and running them on a single piece of computing hardware through virtualization software, the operational efficiency of data center IT infrastructure is boosted. This, in turn, is expected to drive the adoption for processing business data and edge computing purposes in remote locations and branch offices. As a result, the data center rack market is expected to experience positive market growth and trends during the forecast period.
Server infrastructure companies in the market are now providing integrated systems, such as converged and hyper-converged infrastructure solutions. These solutions are based on a software-centric architecture that combines servers, storage, networking, and virtualization resources in a single hardware appliance. The growing adoption of software-defined data centers (SDDCs) is expected to drive the use of hyper-converged infrastructure to enhance application performance in data center environments. The benefits of this infrastructure include simplified deployment and improved resource allocation capabilities.
Moreover, major companies such as Dell Technologies have partnered with companies to offer hyper-converged infrastructure software solutions. These converged infrastructure solutions are replacing traditional stand-alone servers right from their inception. Consequently, this trend may impede data center rack market growth during the forecast period.
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.
Blackbox Box Corp.- The company offers solutions by technology such as KVM Switches and Extenders, Cables, and Infrastructure, Networking Solutions, Video Wall Controllers & Processors, USB Solutions, AV, Multimedia, and Digital Signage.
We also have detailed analyses of the market's competitive landscape and offer information on key companies, including Belden Inc., Black Box Ltd., Chatsworth Products Inc., Cisco Systems Inc., CONTEG spol sro, Databricks Inc., Dell Technologies Inc., Delta Electronics Inc., Eaton Corp. Plc, Fujitsu Ltd., Hewlett Packard Enterprise Co., International Business Machines Corp., Legrand, nVent Electric Plc, Oracle Corp., Panduit Corp., RackSolutions Inc., Rittal GmbH and Co. KG, Schneider Electric SE, and Vertiv Holdings Co.
Technavio market forecast provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The data center rack market is driven by the increasing demand for computing space in the data-intensive sector, including online shopping, digital stores, and social networks. Hyperscale data centers and colocation services are expanding across geographic regions, supported by IT budgets and the need for high-performance computing. Private and public data centers are deploying modular racks from companies to accommodate data traffic and ensure business continuity. Amid the digitization movement, Data centre security concerns such as theft and damage prompt the adoption of containerization, blockchain, and software-based services. Companies offer integrated power solutions for mega facility projects, ensuring efficient operation of networking devices and computing equipment in cloud and software-based service environments.
The data center rack market is witnessing significant growth due to the increasing deployment of data centers, both in private and cloud environments. With the rise of high performance computing, server brands are continuously innovating to deliver more powerful and efficient solutions for various industries, including online payment and digital banking. Private data centers are essential for businesses that require secure handling of customer information, especially in sectors like finance and healthcare. The deployment of these data centers relies heavily on data center racks, which provide a robust and scalable infrastructure for housing servers and other IT equipment. Moreover, the advent of cloud data centers and microservices architecture has led to an increased demand for high-density racks that can accommodate a large number of servers in a compact space.
Cloud services, such as mobile broadband and internet, are also driving the need for more data center capacity and advanced cooling systems to maintain optimal performance. High-performance computing applications, such as artificial intelligence and machine learning, require significant processing power and generate massive amounts of data. Data center racks play a crucial role in supporting these workloads by providing the necessary infrastructure for server deployment and cooling. In conclusion, the data center rack market is a vital component of the digital economy, enabling businesses to leverage high performance computing, cloud services, and digital transformation. As the demand for data processing and storage continues to grow, the market for data center racks is expected to expand further, offering opportunities for innovation and growth.
Market Scope |
|
Report Coverage |
Details |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 12.66% |
Market Growth 2024-2028 |
USD 2.08 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
10.99 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
APAC at 29% |
Key countries |
US, China, UK, Australia, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Belden Inc., Black Box Ltd., Chatsworth Products Inc., Cisco Systems Inc., CONTEG spol sro, Databricks Inc., Dell Technologies Inc., Delta Electronics Inc., Eaton Corp. Plc, Fujitsu Ltd., Hewlett Packard Enterprise Co., International Business Machines Corp., Legrand, nVent Electric Plc, Oracle Corp., Panduit Corp., RackSolutions Inc., Rittal GmbH and Co. KG, Schneider Electric SE, and Vertiv Holdings Co. |
Market dynamics |
Parent market growth analysis, 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 the forecast period. |
Customization purview |
If our data center rack market forecast report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Product Specification
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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