Data Center Equipment Market Size is projected to reach USD 164.36 billion by 2031, growing at a CAGR of 13.2%: Straits Research

The growing adoption of cloud computing and IoT globally, owing to their advantages, is driving the growth of global data center equipment. Moreover, in recent years, there has been a rise in the amount of data generated globally with the surging proliferation of the Internet. This growing amount of data requires an efficient data storage and processing system, which is anticipated to drive the global data center equipment market growth.

New York, United States, April 11, 2024 (GLOBE NEWSWIRE) — Data center equipment refers to the tangible hardware and infrastructure components used to enable and manage the operations of a data center. Computer systems and the parts that go with them, like storage and telecommunications, are housed in data centers, which are special places. They also house the critical networking equipment required for establishing connections and exchanging data with other networks and the Internet. Data center equipment comprises servers, storage systems, and networking equipment, among other components.

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Rapid Adoption of Cloud Computing and IoT Drive the Global Market

The data center landscape is being transformed by cloud computing and the IoT. Cloud computing allows the delivery of various services, such as software, platforms, and infrastructure, over the Internet, reducing the need for physical data centers and lowering operational costs. The Gartner analysis predicts a 21.7% increase in worldwide spending by end-users on public cloud services, estimated to reach USD 597.3 billion in 2023, compared to USD 491 billion in 2022.

Moreover, the IoT enables the interconnection of various devices and sensors through the Internet, resulting in significant amounts of data that need to be processed and analyzed. According to Statista, the number of IoT devices worldwide is projected to increase over twofold, from 15.1 billion in 2020 to more than 29.0 billion by 2030. These technologies drive the demand for data center equipment that can serve cloud and IoT applications.

Growing Adoption of AI in Data Centers Creates Tremendous Opportunities

The data center market is substantially growing using emerging technologies, such as artificial intelligence (AI) and other high-performance computing (HPC) resources. Countries around the globe have progressively adopted artificial intelligence (AI) for diverse purposes. Data centers predominantly utilize rack and blade servers to facilitate AI and ML workloads, hence using High-Performance Computing (HPC). High-Performance Computing (HPC) data centers exist in Nordic countries, the United States, and Europe. This is anticipated to enhance the expansion of the advanced equipment sector.

As an illustration, the United States is leading the way in Artificial Intelligence (AI) worldwide, employing sophisticated technology in various industries, including data centers. The United States’ estimated allocation for Federal research and development (R&D) in FY 2021 amounted to around USD 157 billion, specifically on artificial intelligence (AI) and quantum computing. This expenditure is expected to increase to over USD 170 billion in 2022. Artificial intelligence (AI) can improve data center equipment performance and enable more advanced and automated infrastructure, increasing market opportunities.

Regional Analysis

North America is the most significant global data center equipment market shareholder and is expected to expand substantially during the forecast period. North America is expected to dominate the global data center equipment market because of the region’s substantial presence of leading data center operators, such as Amazon Web Services, Microsoft, Google, IBM, and Equinix. The region hosts numerous prominent and technologically advanced data centers globally, such as the Switch TAHOE RENO facility in Nevada, which spans a remarkable 7.2 million square feet area. Moreover, the region is strongly inclined to embrace cloud computing and IoT, increasing the demand for data center equipment. According to statistics from Synergy Research Group, US businesses’ spending on cloud infrastructure services experienced a 30% increase in the third quarter of 2022 compared to 2021.

Furthermore, Ericsson asserts that the adoption of 5G users in North America remains robust. By the end of 2023, the region is projected to have the largest global use of 5G subscribers, with a penetration rate of 61 percent. This is anticipated to yield significant data for storage and processing. Moreover, the United States is at the forefront of implementing widespread Internet of Things (IoT) operations, with a remarkable 44% of enterprises actively utilizing this technology. Moreover, by 2030, the number of Internet of Things (IoT) connections in North America is projected to exceed 8 billion. The leading cause of this increase is the region’s growing adoption of smart homes. These factors collectively contribute to the expansion of the regional market.

Key Highlights

  • The global data center equipment market size was valued at USD 53.85 billion in 2022. It is expected to reach USD 164.36 billion by 2031, growing at a CAGR of 13.2% over the forecast period (2023–2031).
  • Based on IT infrastructure, the global data center equipment market is classified into networking equipment, servers, and storage. The server segment dominates the global market.
  • Based on application, the global data center equipment market is bifurcated into IT and telecom, BFSI, government and defense, healthcare, and energy. The IT and telecom segment owns the highest market share.
  • North America is the most significant global data center equipment market shareholder and is expected to expand substantially during the forecast period.

Competitive Players

Key players operating in the global data center equipment market are ABB, Vertiv Group Corp, Schneider Electric, Oracle, Lenovo, KIO Networks, Inspur, IBM Corporation, HostDime Global Corp, and Cisco Systems, Inc.

Market News

  • In September 2023, VVDN Technologies announced its collaboration with Axiado Corporation on Open Compute Platform (OCP)-compliant data center and telco Open Radio Access Network (Open RAN) servers.
  • In December 2023, Moore Threads, a well-known Chinese GPU producer, introduced the MTT S4000, a powerful graphics card designed exclusively for AI applications and data center operations.

Global Data Center Equipment Market: Segmentation

By IT Infrastructure

  • Networking Equipment
  • Server
  • Storage

By Applications

  • IT and Telecom
  • BFSI
  • Government and Defense
  • Healthcare
  • Energy

By Regions

  • North America
  • Europe
  • Asia-Pacific
  • LAMEA

Get Detailed Market Segmentation @ https://straitsresearch.com/report/data-center-equipment-market/segmentation

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