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The Data Center Rack Market size is estimated to increase by USD 1,628.53 million, at a CAGR of 11.25% between 2022 and 2027.
The growth of the market depends on several factors, including increasing investments, growth of Big Data analytics, 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 the market growth.
It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the market research report includes historic market data from 2017 to 2021.
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Our analysis of the adoption life cycle of market forecasting indicates its movement between the innovator’s stage and the laggard’s stage. The market analysis and report illustrate 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 market growth and forecasting strategies from 2022 to 2027.
Key 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, market trends and analysis, 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, increasing new data center constructions. Various companies have already begun investing in building new data centers, with some examples provided below:
For instance, 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.
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.
Moreover, 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 for processing business data and edge computing purposes in remote locations and branch offices. As a result, the market is expected to experience positive market growth and trends during the forecast period.
An increase in demand for converged and hyper-converged solutions is hindering market growth. 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 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 market and limit the growth of the market under consideration 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.
Rittal GmbH and Co. KG - The company 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, AV, Multimedia, and Digital Signage.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:
Technavio market research and growth report 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. Technavio report 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 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 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 facilitites in the country.
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. 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 in Nevada. Hence, these factors will drive the market in the region during the forecast period.
The market is experiencing significant growth due to the escalating capacity demand for data storage and the increasing adoption of high-performance solutions. Service providers catering to these technologies play a crucial role in offering comprehensive solutions for housing computing equipment, telecommunication equipment, and various components. As organizations embrace server virtualization and deploy compact server types, considerations for data security, power management, and physical security become paramount. The market is further influenced by factors such as the rising data traffic, storage volume requirements, and the impact of digital transformation, AI, ML, autonomous vehicles, drones, and real-time information on server infrastructures and virtualized data centers, catering to both large and small to mid-sized data centers.
Additionally, the market is responsive to innovations in cooling systems, UPS, form factors, and security requirements, addressing the diverse needs of local operators in the evolving landscape. The choice of rack type, data center size, rack height, cabinets/enclosed racks, and network servers play a pivotal role in meeting the specific needs of large and small to mid-sized, especially in the context of factors such as oil price reduction, AI and ML integration, and challenges related to physical security breaches and virtualization technology.
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.
Market Scope |
|
Report Coverage |
Details |
Page number |
175 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 11.25% |
Market growth 2023-2027 |
USD 1,628.53 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
10.35 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 27% |
Key countries |
US, China, Australia, UK, and Germany |
Competitive landscape |
Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks |
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. |
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 |
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