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The Data Center Server Market is forecast to increase by USD 115 billion at a CAGR of 15.27% between 2022 and 2027. Additionally, market is witnessing industry demand by adoption of AI-powered servers and the expansion of cloud ecosystems. These servers offer high-performance computing capabilities and reduced power consumption, making them ideal for enterprise cloud applications. With the rise of AI infrastructure and increasing reliance on digital services across various industrial verticals, the market is poised for substantial growth. From small data center servers catering to small- and medium-scale businesses to advanced compact servers powering high-performance computing machines, the market offers solutions to meet the diverse needs of today's data-driven world. Leading the market are key industry players such as Egenera, Fujitsu, Hewlett Packard Enterprise, Hitachi, Huawei Investment and Holding, among others.
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The market share growth of the commercial server segment will be significant during the forecast period. Communication service providers and colocation service providers are rapidly expanding their data centers. Key Companies such as Dell, Cisco, and Fujitsu will invest in new centers, which will propel the market in focus during the forecast period. For instance, in October 2022, Cisco invested in data center capacity for WebEx, its remote conferencing, file sharing, and contact center operation services suite, in India. Thus, investment in the data center will leverage servers and, in turn, will drive the market in focus during the forecast period.
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The commercial server segment was valued at USD 50.50 billion in 2017 and continued to grow until 2021. Digital transformation efforts such as digital transactions, cybersecurity, and accounting require flexible and agile data centers to support the changing needs of organizations. Organizations may need to scale resources such as computing or storage to support their changing business needs. The commercial server can provide resources on demand, and their flexible pricing model makes them an ideal choice for organizations. Thus, the ongoing digital transformation will drive the demand, leveraging commercial servers. These will drive the growth of the market in focus during the forecast period.
The investments in scaling up in-house data centers are notably driving the growth, although factors such as server workload optimization may impede the market growth. Our researchers analyzed the data with 2022 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 investments in scaling up in-house data centers are notably driving market growth. Despite the rapid adoption of cloud services, enterprises are increasingly investing to scale up their in-house data centers. This can be attributed to the increasing preference of enterprises for adopting a hybrid cloud approach over moving all their computing requirements to a public cloud.
Due to several benefits of the public cloud, enterprises are opting for a more practical alternative hybrid cloud. In the hybrid cloud model, the business-critical applications are hosted in the private cloud environment (in-house data center or off-premise private cloud), while the other applications are moved to the public cloud. Hence, the market is witnessing a surge in demand from enterprises that are scaling up the server count in their in-house centers.
The use of server disaggregation to improve utilization rates is one of the major market trends. Server disaggregation refers to logically break up the server's components into subsystems - memory and compute. Data centers are looking at alternatives that can enhance their server utilization rates and subsequently reduce their power consumption. The reason is as server utilization rates increase, fewer servers are required to process the existing workloads, which reduces power consumption. Server disaggregation is one way of increasing server utilization rates.
Also, server disaggregation helps prevent the replacement of the entire server to substitute just one part or component. Depending on the requirements, resources can be procured to add to the respective system independently. Disaggregated servers can be reused for different applications with different resource requirements. These benefits will help the market in focus grow during the forecast period.
Server workload optimization is the major challenge affecting market growth. Advanced technologies such as big data analytics and artificial intelligence (AI) have enabled enterprises to analyze huge amounts of granular datasets to get relevant and updated insights on the different aspects of their business (production, customer, distribution, and supply chain). Therefore, enterprises and service providers need sophisticated and high-performance servers to handle these workloads.
Since these workloads challenge the computing capacity of servers when enterprises and information center service providers upgrade their existing infrastructure, they face issues with optimum utilization of the servers' computing capacity. Additionally, other areas of concern are the power and physical space constraints in data centers and the unexpected surge in enterprise server capacity demands, which further increase the complications.
The market growth analysis 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 market growth and forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global 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.
Inspur Systems Inc. - The company offers data center servers such as NF8480M6, NF8260M6, and NF5280M6.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about companies, listed below:
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.
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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 demand for servers will be high during the forecast period in North America, driven by higher investments by hyper-scale cloud providers, colocation service providers, and enterprises that are upgrading their IT infrastructure to support edge computing, 5G, multi-cloud services, big data analytics, and IoT. The US is the hub in North America, with Atlanta, Northern Virginia, Chicago, Dallas/Ft. Worth and Silicon Valley dominate the market in the region. Several service providers and enterprises have announced their expansion plans, which would drive the server market in the region.
The US has witnessed substantial investments in the field of edge computing, and the adoption of edge data centers increased in the past few years. Various companies in the region are also focusing on setting up dedicated edge data centers. The center is being designed to cater to clients who need to manage confidential data. Therefore, the increase in focus on edge computing and the rising adoption of edge data centers are expected to drive the demand.
The market is thriving, particularly in regions like Grover Beach, United States, and across IT & Telecommunication sectors globally. Telecom giants such as American Airlines, VMware HCX, and IBM Cloud are driving innovations in North American, European, and Asian markets, including Denmark, Central America, and Southeast Asia. Key players are expanding their footprint, notably in Mexico, Nigeria, Egypt, Turkey, and the United Arab Emirates. The African continent witnesses substantial growth, with 2,800 base stations facilitating connectivity. Additionally, online payments are increasingly integrated into server infrastructure across the Asia-Pacific, including Malaysia, Vietnam, Thailand, Indonesia, Philippines, and Singapore.
The market is experiencing rapid growth, driven by the increasing demand for machine learning capabilities and the expansion of cloud computing. Key players are offering advanced and compact servers equipped with powerful processors and ample memory to handle vast amounts of data. These servers provide the computational power needed for various applications, including AI, finance, healthcare, and retail. With the proliferation of Internet of Things (IoT) devices devices, smartphones, and social media, data centers require stringent security measures and redundant power sources to ensure uninterrupted operation. Additionally, the market caters to the evolving needs of digital transformation initiatives across industries, supporting operations for storage data optimization and innovation.
The micro data centers market is witnessing growth with advanced and high-performance compact servers catering to diverse needs, including hosting websites, running applications, and storing data cards. Equipped with extensive storage capacity and operating within a temperature-controlled facility for environmental impact , they support e-commerce and online platforms efficiently. Additionally, these solutions enable machine learning (ML) and operations optimization and processing power, benefiting sectors like manufacturing. High-performance data center servers offer scalable server solutions and energy efficiency, addressing concerns about environmental concerns. Companies are embracing infrastructure overhauls with energy-efficient technologies and management systems to align with sustainability goals.
The market forecasting report covers 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 |
182 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 15.27% |
Market growth 2023-2027 |
USD 115 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
13.82 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
North America at 35% |
Key countries |
US, China, Australia, Japan, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Atos SE, Cisco Systems Inc., Dell Technologies Inc., Digital Realty Trust Inc., Egenera Inc., Fujitsu Ltd., Hewlett Packard Enterprise Co., Hitachi Ltd., Huawei Investment and Holding Co. Ltd., Inspur Systems Inc., International Business Machines Corp., Iron Systems Inc., Lenovo Group Ltd., NEC Corp., Oracle Corp., Quanta Computer Inc., Schneider Electric SE, Super Micro Computer Inc., Trend Micro Inc., and Unisys Corp. |
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, and Market condition analysis for the forecast period. |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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