Server Market Analysis North America, Europe, APAC, South America, Middle East and Africa - US, China, Japan, Germany, France - Size and Forecast 2024-2028

Server Market Size 2024-2028 

The server market size is projected to increase by USD 47.02 billion at a CAGR of 8.31% between 2023 and 2028. The market sizes and unit demand exhibit significant spending growth, despite concerns about inflation and economic activity. GPU server shipments are on the rise, particularly driven by hyperscalers amidst the pandemic. This surge in demand is reflected in ASPs (average selling prices), indicating a robust market. The pandemic has accelerated the adoption of edge computing, necessitating proficient server deployment for decentralized processing.

This architectural paradigm enables efficient processing of IoT-generated data closer to data sources. The integration of AI further optimizes server workload, addressing infrastructure challenges and enhancing performance. Amidst economic uncertainties, automated and intelligent frameworks have become essential for meeting fluctuating demands and ensuring operational efficiency.

What will be the Size of the Market During the Forecast Period?

Page Number	173
Forecast period	2024-2028
Historic period	2018-2022
List of Exhibits	209
Growth momentum & CAGR	Accelerate at a CAGR of 8.31
Market Growth 2024-2028	USD 47.02 billion

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Market Segmentation By Product Insights

The market share growth by the rack segment will be significant during the forecast period. They are computers designed to be housed in a structure known as a server rack and can also be called a rack-mounted server. Mechanically, racks easily slide in and out of server racks to allow system administrators and technicians to immediately diagnose the problem and swap parts without the need to shut down or disassemble the entire system reducing downtime. They are most commonly found in data centers.

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The rack segment was the largest and was valued at USD 19.89 billion in 2018. The rack are suitable for enterprises that have fixed business requirements. SMEs account for a significant share of the demand as they require less space and can be supplemented with extra memory, processors, and storage. The data infrastructure grew significantly during the past five years and is expected to grow at a steady pace during the forecast period, with investments being made in the expansion and building of new facilities. The digital transformation initiatives undergoing in the business demand powerful computing resources to support modern applications, big data analytics, AI machine learning, and Internet of Things (IoT) deployments surge the demand. Therefore, the rack segment is expected to grow in the market during the forecast period.

By End-User Insights

The information technology (IT) and telecom segment is expected to have a significant growth rate in the market. The growing emphasis on the quick upgrade of IT infrastructure around the world. With rising demand for high-speed internet, mobile connectivity, and seamless communication across various devices and platforms. With the surge in data generation, businesses are seeking methods to turn this into a profitable position. Businesses increased use of data analytics to better understand their customers has resulted in a rise in the use of IT networking equipment. The demand for servers such as (web servers, file servers, network servers, database servers, dedicated servers) is being driven by the demanding and shifting settings demanded by cloud service providers. In addition, the development of 5G networks and technologies such as the IoT, cloud computing, and virtualization is expected to stimulate the demand for servers. Therefore, such factors drive the growth of the IT and telecom segment in the market during the forecast period.

Regional Overview

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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 market trends and analysis and drivers that shape the market during the forecast period. The region has a mature IT ecosystem with a high adoption rate of advanced storage technologies. The demand is driven by the need for scalable, high-performance, and reliable storage solutions to support digital transformation initiatives, big data analytics, cloud computing, and mission-critical applications. 

In addition, the market in North America finds extensive applications across various industries, including IT and telecommunications, banking and finance, healthcare, and government. These sectors have high storage requirements and rely on solutions to store, manage, and access their critical data and applications efficiently. Thus, the growing use of solutions across various industries will further drive the growth of the regional market during the forecast period. 

Market Dynamics and Customer Landscape 

The burgeoning demand for edge computing is a significant driver of market growth, with its adoption leading to efficient data processing closer to the source and necessitating distributed server deployment. This trend, prevalent across various industries like manufacturing, utilities, retail, automotive, and social media, is fueled by the escalating need for IoT-driven data transmission, consequently elevating the requirement for edge computing infrastructure. Moreover, the commercial rollout of 5G further amplifies the demand for edge computing, promising market expansion in the forecast period.

A notable trend shaping market dynamics is the utilization of AI for optimizing server workloads, and addressing complex infrastructure challenges in data centers. However, cybersecurity challenges pose significant obstacles, with the escalating threat of cyberattacks compelling enterprises to bolster data protection measures. Stringent regulations like GDPR further enforce data security. With the anticipated rise in cyberattacks due to increased IoT adoption, BYOD policies, and mobility services, the market's growth prospects face hindrances in the forecast period.

Key Market Driver

The growing need for edge computing is notably driving the market growth. The proliferation of edge computing, where processing occurs closer to the data source (at the edge of the network), necessitates servers at these distributed locations to handle computing tasks efficiently. The growing need for edge computing is one of the major factors driving the growth of the global market. Edge computing is an architectural model in which the data generated by IoT devices are processed at the edge of a network, which is mostly close to the source of the data. The use of radio-frequency identification (RFID) sensors to tag, track, connect, and read objects in logistics and warehouses in the late 1990s popularized the concept of the IoT.

Moreover, many industries, such as manufacturing, utilities, retail, automotive, and social media, are using the IoT for increased data transfer, thus leading to the growing number of IoT-enabled devices, increasing the need for edge computing facilities. Thus, the commercial deployment of 5G and with the growing need for edge computing, the market is expected to grow during the forecast period. 

Significant Market Trends

Using AI for server workload optimization is an emerging trend shaping the market growth. AI plays a significant role in workload optimization by leveraging algorithms and machine learning techniques to enhance efficiency, performance, and resource allocation. While vendors are developing advanced to handle AI workloads, AI technology is being used to handle complex infrastructure problems related to server energy consumption and security in data centers. The traditional approaches to enhancing server efficiency, which involves human intervention, may not be adequate due to the fluctuating demand for data centers' computing resources, which calls for an automated and intelligent framework. 

Moreover, AI helps in scheduling tasks or workloads more intelligently, considering factors such as priority, resource availability, and dependencies. Using AI in workload optimization plays a crucial role in enabling proactive, adaptive, and efficient management of resources to meet performance goals while minimizing costs and manual intervention. Therefore, such factors drive the market growth and trends during the forecast period.

Major Market Challenges

Cybersecurity challenges are significant challenges hindering market growth. The threat of cyberattacks has increased significantly over the past few years. Enterprises in various industry verticals, such as Banking, Financial Services and Insurance (BFSI), and healthcare, find it challenging to protect their sensitive information, such as that related to financial transactions and the personal information of customers. Also, data protection authorities are enforcing stringent regulations on enterprises, such as the General Data Protection Regulation (GDPR) in the EU, to protect the sensitive information of customers.

Additionally, the number of cyber-attacks is expected to grow during the forecast period as more devices, applications, and users are being added to enterprise networks due to the increased adoption of IoT, bring-your-own-device (BYOD) policies, and mobility services. This will hinder the growth of the market in focus during the forecast period. 

Customer Landscape

Market forecasts include the adoption lifecycle of the market research and growth, 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 growth and trends strategies.

Customer Landscape

Who are the Major Companies?

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.

ASUSTeK Computer Inc. - The company offers RS300 E12 RS4, RS300 E12 PS4, and RS720Q E11 IM.

The market  growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:

• AMAX Engineering Corp.
• Amazon.com Inc.
• Dell Technologies Inc.
• Fujitsu Ltd.
• Hewlett Packard Enterprise Co.
• Huawei Technologies Co. Ltd.
• Inspur Group
• Intel Corp.
• International Business Machines Corp.
• Lenovo Group Ltd.
• NEC Corp.
• NVIDIA Corp.
• Oracle Corp.
• Quanta Computer Inc.
• SAP SE
• SMART Global Holdings Inc.
• Super Micro Computer Inc.

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Market analysis and report of 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.

Market Analyst Overview

The Server Market is experiencing a dynamic shift spurred by the rise of emerging technologies and evolving business models like work-from-home model and e-commerce websites. Particularly in sectors such as BFSI (Banking, Financial Services, and Insurance), digital payments, and online services, the demand for server sales is escalating.

The adoption of cloud servers and edge data centers is propelled by the integration of AI (Artificial Intelligence), IoT (Internet of Things), and software-defined networks (SDNs), driving IT infrastructure initiatives by governments worldwide. Initiatives like the Production Linked Incentive (PLI) scheme further boost collaboration between IT hardware manufacturers and large enterprises in deploying advanced server designs.

The market landscape encompasses various segments like rack servers, open compute project segment, and reseller segment, catering to diverse IT & Telecom and BFSI sectors. Amid macro-economic factors and supply chain disruptions due to events like the war between Russia and Ukraine, the market adapts with a focus on energy efficient systems and sustainable solutions.

With a surge in cloud deployments and mission-critical investments, the server market continues to evolve, supported by AI/ML integration and modernization initiatives. Detailed market reports and forecasting techniques guide stakeholders in navigating the evolving landscape of the server industry.

Segment Overview

The market research report forecasts market growth analysis by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.

•  Product Outlook
  • Rack
  • Blade
  • Micro
  • Open compute project
  • Tower
• End-user Outlook
  • IT and telecom
  • BFSI
  • Government and defense
  • Healthcare
  • Others
• Region Outlook
  • North America
    • The U.S.
    • Canada
  • South America
    • Chile
    • Brazil
    • Argentina 
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Scope
Report Coverage	Details
Base year	2023
Market structure	Fragmented
YoY growth 2023-2024(%)	7.81
Regional analysis	North America, Europe, APAC, South America, and Middle East and Africa
Performing market contribution	North America at 35%
Key countries	US, China, Japan, Germany, and France
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	AMAX Engineering Corp., Amazon.com Inc., ASUSTeK Computer Inc., Bloom Energy Corp., Cisco Systems Inc., Dell Technologies Inc., Fujitsu Ltd., Hewlett Packard Enterprise Co., Huawei Technologies Co. Ltd., Inspur Group, Intel Corp., International Business Machines Corp., Lenovo Group Ltd., NEC Corp., NVIDIA Corp., Oracle Corp., Quanta Computer Inc., SAP SE, SMART Global Holdings Inc., and Super Micro Computer Inc.
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 the 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.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2024 and 2028
• Precise estimation of the market  size and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market across North America, Europe, APAC, South America, and Middle East and Africa
• Thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies 

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