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The Global Data Center Rack Market size is estimated to increase by USD 1,628.53 million accelerating at a CAGR of 11.25% between 2022 and 2027.
The growth of the market depends on several factors, including increasing investments in data centers, growth of Big Data analytics, and emerging containerized and micro-mobile data centers. Some of the ongoing trends in the market include the growing need for edge computing, implementation of SDDCs, and consolidation of data centers. The global data center rack market witnesses the presence of established players, which together capture the largest share of the global market. Vendors compete based on parameters such as R and D, technological innovations, strategic collaborations, M and A, market expansion activities, and investments. Competition among the vendors is increasing, as most of them are offering a similar portfolio of data center power. To remain competitive in the market, vendors 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 the market growth.
This report extensively covers market segmentation by Type (server rack and network rack), Product Specification (medium, large, and small), and Geography (North America, Europe, APAC, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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Our analysis of the adoption life cycle of the market indicates its movement between the innovator’s stage and the laggard’s stage. The report illustrates the lifecycle of the market, focusing on the adoption rates of the major countries. Technavio has included key purchase criteria, adoption rates, adoption lifecycles, and drivers of price sensitivity to help companies evaluate and develop growth strategies from 2022 to 2027.
Key Data Center Rack Market Customer Landscape
Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market. Although there has been a disruption in the growth of the market during the COVID-19 pandemic, a holistic analysis of drivers, trends, and challenges will help companies refine marketing strategies to gain a competitive advantage.
Increasing investments in data centers are driving market growth. 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, resulting in an increase in new data center constructions. Various companies have already begun investing in building new data centers, with some examples provided below:
NTT Ltd. recently launched its first data center, NAV1A, in India in May 2022, located on the premises of its new hyperscale data center. NTT presently has a total of 12 data center locations throughout the country, with more than 2.5 million square feet (232,258 m2) and 220 MW of facility power.
Increasing investments in constructing data centers suggest a growing need for servers and storage devices, which is expected to fuel the expansion of the worldwide market for data center racks.
Consolidation of data centers is a major trend in the market. 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. By consolidating servers and running them on a single piece of computing hardware through virtualization, the operational efficiency of data center IT infrastructure is boosted. This, in turn, is expected to drive the adoption of data center racks for processing business data and edge computing purposes in remote locations and branch offices. As a result, the global data center rack market is expected to experience positive growth during the forecast period.
An increase in demand for converged and hyper-converged solutions is hindering the market growth. Server infrastructure vendors 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. Major vendors such as Dell Technologies and Lenovo have partnered with companies like Nutanix and Simplivity 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 the growth of the global data center server market and limit the growth of the market under consideration during the forecast period.
Vendors 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.
Rittal GmbH and Co. KG - The company t offers various products such as enclosures, power distribution, climate control, IT infrastructure, automation systems, and innovations for various end-user industries such as electrical engineering and automation, renewable energy, IT, infrastructure, process industry, and others. The key offerings of the company include data center racks.
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, and AV, Multimedia, and Digital Signage.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market vendors, including:
Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies vendors into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Vendors are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis. Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies vendors into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Vendors are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The server rack segment was valued at USD 1,408.68 million in 2017 and continued to grow until 2021. 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. Another major factor driving the growth of the server rack segment is the increasing adoption of cloud-based services. 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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42U rack is one of the standard server rack sizes. This dimension specifically refers to the height of the rack. U is the abbreviation for unit or rack unit. One U is equivalent to 1.75 inches or 44.45 millimeters. So, a 42U rack provides a total of 73.5 inches of available vertical equipment space. The 42U is compatible with various ranges of servers and rack-mountable networking equipment products. The 42U and below the rack are completely customizable and can handle even the heaviest loads up to 3,000 lbs. These factors will positively impact the growth of the small segment during the forecast period.
North America is estimated to contribute 27% to the growth by 2027. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period.
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The market in North America was the most dominant among all the regions. The primary reason for this dominance is the increasing number of data center establishments which resulted in the demand for IT infrastructure, network equipment, and other devices. Moreover, many leading companies, such as Google LLC, Microsoft Corporation, and Apple Inc., have also set up numerous data centers in the country.
Furthermore, the construction of new data 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 data center constructions also include the establishment of colocation facilities. Through these facilities, many SMEs can opt for infrastructure that suits their business requirements. Additionally, several data center service providers and enterprises have announced their expansion plans, which will also fuel the growth of the market. For example, Google in 2021, announced its plan to invest over USD 7 billion in US data centers and offices, with plans for the expansion of data centers in Nevada. Hence, these factors will drive the market in the region during the forecast period.
In 2021, enterprises and companies picked up their pace due to the availability of COVID-19 vaccines and large-scale vaccination drives by the governments. Moreover, companies realized the need for cloud-based solutions, as retail companies, enterprises, and consumers in this region are shifting toward using cloud-based software solutions. This is one of the major factors that have led to an increase in the need for these racks. Therefore, the market in the North American region is expected to witness a high growth rate during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
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Data Center Rack Market Scope |
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Report Coverage |
Details |
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Page number |
175 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 11.25% |
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Market growth 2023-2027 |
USD 1,628.53 million |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
10.35 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 27% |
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Key countries |
US, China, Australia, UK, and Germany |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Belden Inc., Black Box Corp., 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 SA, nVent Electric Plc, Oracle Corp., Panduit Corp., RackSolutions Inc., Rittal GmbH and Co. KG, Schneider Electric SE, and Vertiv Holdings Co. |
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Market dynamics |
Parent market 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 forecast period |
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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. |
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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 Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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