White-box Server Market by End-user, Type, and Geography - Forecast and Analysis 2023-2027

White-box Server Market Forecast 2023-2027

The global white-box server market is forecast to increase by USD 37.39 billion at a CAGR of 19.3% between 2022 and 2027. The market experiences significant growth driven by various factors. With the emergence of mini data centers and advancements facilitated by the Open Compute Project Foundation, the market witnesses expanded opportunities for innovation and customization. Moreover, the trend towards reduced energy consumption further enhances the appeal of white-box servers, making them increasingly sought after in diverse industries worldwide. It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report consists of historic market data from 2017 to 2021.

What will be the size of the White-box Server Market During the Forecast Period?

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The market is propelled by various factors, including the demand from data centers and internet companies seeking cost-effective solutions. Original design manufacturers (ODMs) leverage commercial off-the-shelf (COTS) components to offer low-cost, highly customizable servers. This market caters to diverse end users, benefiting from the flexibility and open platforms championed by initiatives like the Open Compute Project.

Market Segmentation

This report extensively covers market segmentation by end-user (data centers, SME, and large enterprises), type (rack and tower servers, blade servers, and density optimized servers), and geography (North America, APAC, Europe, South America, and Middle East and Africa). In the end-user segment of the market, Linux-based systems play a pivotal role, offering versatility and reliability. Micro-servers and traditional server setups cater to diverse user needs, emphasizing customization and tailored server design. Cloud computing drives demand, with users seeking scalable solutions for their cloud services and big data analytics needs. Vendor support and technical expertise are essential considerations, ensuring seamless integration and optimal performance. Security features are prioritized to safeguard sensitive data in these powerful and scalable server solutions, meeting the stringent requirements of modern enterprises and cloud service providers.

By End-user

The market share growth by the data centers segment will be significant during the forecast period. Nowadays, industries across verticals prefer using data centers to run their daily activities instead of in-house infrastructure due to the requirement to handle huge volumes of data and complex IT systems. Data centers provide scalability and agility to business functions. Hence, data centers have become a vital infrastructural requirement for organizations worldwide. 

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The data centers segment was valued at USD 8.63 billion in 2017 and continued to grow until 2021. White-box servers are increasingly being used to construct data centers targeted at handling operational requirements from small and medium-sized enterprises (SMEs) and the large-scale deployment of some redundant functions like web hosting. They offer great flexibility in terms of organizations' business and operational needs. Additionally, its adoption can also be seen among micro-mobile and containerized data centers through partnerships with operational data management systems (ODMs) and infrastructure providers. This, in turn, is expected to foster the overall growth of the data center segment of the focused market during the forecast period.

Key Regions

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North America is estimated to contribute 36% 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 US is the primary adopter of data center services in the Americas, as the country is home to the highest number of such facilities. Most of the data centers in the US are extending their existing facilities with more rack cabinets and servers. The region will witness an increase in mission-critical and high-performance computing servers during the forecast period owing to the growing use of cloud services and big data analytics. With several SMEs adopting data center services, the demand will increase manifold in this region, driven by the low cost of setting up infrastructure. Several bigger companies like Google and Facebook are also moving toward adopting them for their new facilities.

The US is dominated by five hubs, namely, Dallas, New Jersey, North Virginia, Phoenix, and Silicon Valley. Investments in data centers in Phoenix are rising because it has a low risk of natural disasters and low utility and land costs. The city also has a well-developed fiber network infrastructure. increasing IT spending by enterprises drives the growth of the market in the region. As several companies move into an IT-integrated business model, there is a need for them to strive for innovation, streamline processes, and enhance the customer experience. This can be achieved through big data analytics, predictive analysis, and several other tools and technologies which enable enterprises to process and store information. Therefore, there is a demand for new data centers, which, in turn, increases the demand in the region during the forecast period.

Market Dynamics and Customer Landscape

The market is powered by data centers and internet companies seeking cost-effective solutions without compromising performance. Original design manufacturers (ODMs) leverage commercial off-the-shelf (COTS) components, ensuring low costs and high customization for end users. With projects like Project Scorpio and initiatives like the Open Compute Project, white-box servers offer open platforms and support for cloud computing and big data analytics. These servers, including micro-servers, outshine traditional counterparts with their powerful and scalable solutions. Backed by Linux and robust hardware design, they prioritize data sovereignty and security, making them an ideal choice for businesses requiring technical expertise and vendor support. 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.

Key Market Driver

Increasing developments through Open Compute Project Foundation are notably driving the market growth. Facebook introduced the Open Compute Project in 2011 to develop high-performance data center infrastructure with reduced power consumption and infrastructure cost. With the implementation of innovative infrastructure design, Facebook witnessed a 38% reduction in power consumption and a 24% reduction in operational expenditure (OPEX) in its data centre in Oregon, US.

In 2021, the company shared its design with its partners, including Intel, Rackspace, and Goldman Sachs. These organizations collectively termed the community as Open Compute Project Foundation, which focuses on the design of energy-efficient and scalable data centre infrastructure. Thus, the Open Compute initiative has driven the market. They offer almost similar scalability at a much-reduced price of procurement compared with branded servers. Several large organizations around the world are embracing white-box servers using the Open Compute Project to build data centres according to their specific requirements. Therefore, the project has pushed the adoption to a substantial extent, which in turn, will boost the growth of the global market during the forecast period.

Significant Market Trends

The construction of green and energy-efficient data centers is an emerging trend in the market. The increase in carbon emissions and high electricity consumption by data centers worldwide are creating awareness among enterprises about the construction of green data center facilities. White-box servers consume considerably lesser energy compared with full-fledged servers. Hence, they are being adopted for several smaller workloads for large organizations, and in many cases, for the overall operations of some SMEs. 

Google, Amazon, Facebook, and Microsoft are involved in the operation of green data center facilities. These facilities include the use of white-box servers, which consume less energy compared to other servers. They also reduce the cooling need of the facilities to a considerable extent and reduce rack-level power density, resulting in lower power bills. Therefore, the requirement for efficient data centers, in terms of power and environmental impact, will aid the growth of the global market during the forecast period. 

Major Market Challenge

Threats from branded server companies are major challenges impeding market growth. The market is still in a nascent stage, as the market share of white-box servers is below 10% of the global market. However, since its conception, the growth of the white-box server has been strong, and it will penetrate more into other data centers during the forecast period. They are reducing the market share of the leading branded server companies such as HP, Dell, IBM, and others every year. This trend is likely to continue during the forecast period unless the branded companies also offer server infrastructure that is cheaper than white-box servers and efficient in terms of power and performance. 

Many organizations prefer to buy servers from branded server companies rather than directly from ODMs. The branded companies, with their continuous innovation, can still pose a significant challenge to the market. For instance, HP introduced the new Cloudline server in partnership with Foxconn as a competitive product for white-box servers. Branded server companies are also active participants in the open community and will continue to offer modern server infrastructure that matches the white-box servers. Therefore, these factors will hinder the growth of the market in focus during the forecast period.

Customer Landscape

The 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 report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Market Customer Landscape

Who are the Major Market 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.

Equus Computer Systems Inc. - The company offers various products such as rackmount servers, super micro servers, multi-node servers, HD storage servers, high-density HDSS, direct attached storage, network attached storage, and other products. The key offerings of the company include white box server products and services. 

The report also includes detailed analyses of the competitive landscape of the market and information about 11 market companies, including:

• Cisco Systems Inc.
• Fujitsu Ltd.
• Huawei Investment and Holding Co. Ltd.
• Inspur Systems Inc.
• Intel Corp.
• Jabil Inc.
• MiTAC Holdings Corp.
• Servers-Direct
• Super Micro Computer Inc.
• Whitestack
• Happyware-Server Europe GmbH

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, robust, tentative, and weak.

Market Analyst Overview

The global market is characterized by the involvement of various players, including internet companies, original design manufacturers (ODMs), and suppliers of commercial off-the-shelf (COTS) components. One of its defining features is the high degree of customization, allowing for tailored solutions to meet the needs of end users. Open platforms and initiatives like Project Scorpio promote innovation and flexibility in server design. However, considerations such as data sovereignty and security features remain paramount, ensuring the trust of end customers. With a focus on cloud computing and leveraging Linux-based systems, the market offers powerful and scalable server solutions supported by vendor expertise and technical support.

The market is an evolving landscape driven by factors like MRFR Database insights and Analyst Review, which inform strategic decisions in the networking business. With a focus on hardware design and the emergence of micro-servers alongside traditional servers, vendors provide tailored solutions backed by robust vendor support and technical expertise. These servers boast high performance levels suited for diverse applications across industries amid the digital revolution. The x86 servers segment dominates, leveraging TCP/IP networking protocols and catering to the changing needs of traditional IT landscapes transitioning into the era of ICT technologies and digitalization. They accommodate the rising demand for digital services driven by mobile devices and handle vast data volumes efficiently.

Segment Overview

The market research and growth report forecasts market growth by revenue at global, regional & country levels and analyzes the latest trends and growth opportunities from 2017 to 2027. 

• End-user Outlook 
  • Data-centers
  • SMEs
  • Large enterprises

• Application Outlook 
  • Rack and tower-servers
  • Blade-servers
  • Density optimized-servers

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • 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
  • South America
    • Chile
    • Brazil
    • Argentina

White-box Server Market Scope
Report Coverage	Details
Page number	157
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 19.3%
Market growth 2023-2027	USD 37.39 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	18.9
Regional analysis	North America, APAC, Europe, South America, and Middle East and Africa
Performing market contribution	North America at 36%
Key countries	US, China, Japan, India, and UK
Competitive landscape	Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks
Key companies profiled	Cisco Systems Inc., Equus Computer Systems Inc., Fujitsu Ltd., Happyware Server Europe GmbH, Huawei Investment and Holding Co. Ltd., Inspur Systems Inc., Intel Corp., Jabil Inc., MiTAC Holdings Corp., Servers Direct, Super Micro Computer Inc., and Whitestack
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.

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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 market growth and forecasting between 2023 and 2027
• Precise estimation of the white-box server market size and its contribution to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Market growth analysis across North America, APAC, Europe, South America, and Middle East and Africa
• A thorough analysis of the market’s competitive landscape and detailed information about companies
• Market forecasting of factors that will challenge the growth of white-box server market companies

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