Market Size and Overview:

The Global Data Centre Equipment Market size was exhibited at USD 60.96 billion in 2023 and is projected to hit around USD 145.2 billion by 2030, growing at a CAGR of 13.2% during the forecast period from 2024 to 2030.

Data center equipment encompasses the physical hardware and devices utilized within data centers for the storage, control, processing, and transmission of data. These components include servers, storage systems, networking devices, power distribution units, cooling systems, and security equipment, among other essential elements. Data centers play a crucial role for businesses requiring efficient management of large data volumes, such as cloud service providers, telecommunications firms, and large enterprises.

The future outlook of the data center equipment market appears promising, driven by the rising trend of digitization and the increasing adoption of cloud computing worldwide. The growth in data from various sources like social media, connected devices, and the Internet of Things (IoT) highlights the urgent need for enhanced storage and processing capabilities. Moreover, the heightened demand for data centers is fueled by advancements in technologies such as artificial intelligence and machine learning.

Key Market Insights:

The global expansion of data center equipment is propelled by the widespread acceptance of cloud computing and IoT due to their inherent advantages. Simultaneously, the increasing global data generation, fueled by the widespread growth of the Internet, underscores the necessity for efficient data storage and processing infrastructure, thereby driving the anticipated growth of the global data center equipment market.

The range of data center equipment includes the tangible hardware and foundational components used to facilitate and oversee data center operations. These specialized facilities are designed to accommodate computer systems, storage, and telecommunications infrastructure. Additionally, they house essential networking equipment for seamless data exchange with other networks and the Internet.

Data center equipment, comprising servers, storage systems, and networking components, is intricately designed for continuous, uninterrupted operation to ensure consistent and reliable performance for supported applications and services. As technology progresses, data centers systematically integrate new equipment and technologies to optimize performance, improve energy efficiency, and enhance overall functionality.

Global Data Centre Equipment Market Drivers:

The increased demand for edge computing amid the surge in digitization drives market expansion.

Edge computing, characterized by a decentralized computing model, strategically positions data processing and storage closer to the originating devices and sensors, reducing reliance on centralized data centers. To accommodate edge computing, data center equipment manufacturers are innovating specialized solutions tailored for deployment in remote and challenging environments.

These solutions include micro data centers, robust servers, and networking equipment specifically designed for edge computing. The rise in edge computing demand is attributed to various factors, including the proliferation of connected devices and sensors, the need for real-time processing and analytics, and limitations posed by traditional cloud computing models.

The rapid adoption of the Internet of Things (IoT) and interconnected devices fuels market advancement.

 IoT constitutes a network of connected devices and sensors designed for data collection and transmission. The expansion of IoT drives the demand for data center equipment capable of managing the substantial volumes of data generated by interconnected devices and sensors.

This requires solutions such as high-density storage systems, energy-efficient processors, and networking equipment tailored for edge computing. The surge in IoT adoption is driven by various factors, including the increasing availability of cost-effective sensors and devices, the growing demand for real-time data processing and analytics, and the emergence of innovative business models leveraging IoT data. With the continuous proliferation of IoT adoption, there is an expected increase in demand for data center equipment capable of supporting these evolving workloads.

Global Data Centre Equipment Market Restraints and Challenges:

A significant challenge facing the data center equipment market is the escalating energy costs and the need to reduce energy consumption. Data centers require substantial energy consumption for equipment operation and cooling, resulting in significant energy costs for operators. To address this challenge, operators are integrating energy-efficient technologies and methodologies, such as server virtualization, advanced cooling systems, and renewable energy sources.

However, the adoption of these technologies may involve significant initial investments, presenting potential hurdles for certain organizations. Additionally, the growing demand for data center equipment and the increasing complexity of data center environments can pose challenges in optimizing energy usage and reducing costs. This challenge is particularly pronounced for older data center facilities that were not initially designed with energy efficiency in mind.

In essence, the need to reduce energy consumption and minimize operational expenses is a significant constraint for the data center equipment market. With the continuous increase in energy costs and a growing emphasis on environmental considerations, data center operators must invest in energy-efficient solutions to remain competitive and ensure long-term sustainability.

Global Data Center Equipment Market Opportunities:

A notable trend influencing the data center equipment market is the transition to software-defined infrastructure. Software-defined infrastructure involves using software to oversee and automate the provisioning and management of data center resources, including computing power, storage, and networking.

This trend is driven by the need for increased agility, adaptability, and efficiency in data center operations. Software-defined infrastructure enables operators to quickly and efficiently allocate and manage resources, allowing them to respond promptly to evolving business requirements and workload fluctuations. Additionally, software-defined infrastructure facilitates the establishment of intelligent, self-regulating data center environments capable of optimizing resource utilization and reducing operational costs.

For example, software-defined storage solutions can autonomously transfer data among different storage tiers based on usage patterns, while software-defined networking solutions dynamically adjust network bandwidth and routing to enhance performance. Another catalyst for the shift toward software-defined infrastructure is the growing adoption of hybrid cloud models, which involve using both public and private cloud resources to support various workloads and business demands. Software-defined infrastructure offers the flexibility and control needed to effectively manage and optimize hybrid cloud environments.

In summary, the move toward software-defined infrastructure is a significant trend shaping the data center equipment market. As operators seek ways to enhance agility, efficiency, and flexibility, continued growth in the adoption of software-defined infrastructure is expected.

Global Data Centre Equipment Market Segmentation:

Global Data Centre Equipment Market Segmentation: By IT Infrastructure:

•             Networking Equipment

•             Server

•             Storage

The global data center equipment market is segmented according to IT infrastructure, including networking equipment, servers, and storage. Among these categories, servers stand out as the predominant segment. A data center server denotes a high-performance computing system engineered to efficiently handle and process data within a data center environment. Data centers, specialized facilities housing numerous servers and associated components like telecommunications and storage systems, aim to meet the diverse computing and networking requirements of various enterprises.

The primary role of a data center server encompasses hosting and executing applications, managing and processing data, and facilitating internal data center communication as well as communication with external networks. These servers undergo meticulous design to ensure exceptional performance, reliability, and scalability, meeting the demands of modern computing environments. Data center servers are available in various form factors, designs, and capabilities, with common types including rack-mounted servers, blade servers, tower servers, and enterprise servers.

Global Data Centre Equipment Market Segmentation: By Applications:

•             IT and Telecom

•             BFSI

•             Government and Defense

•             Healthcare

•             Energy

The global data center equipment market is segmented based on applications, encompassing IT and telecom, BFSI, government and defense, healthcare, and energy sectors. Notably, the IT and telecom segment holds the largest market share. This segment is projected to witness significant growth owing to the widespread adoption of cloud computing and the Internet of Things (IoT). These technologies drive the demand for data centers, serving as platforms for various services such as software, platforms, and infrastructure delivered over the Internet. Furthermore, the surge is propelled by the global proliferation of smartphones and the escalating number of internet users.

Additionally, the introduction of 5G technology made a substantial impact on this category in 2020, with its influence expected to endure in the years ahead. The emergence of Network Function Virtualization (NFV) and Software-Defined Networks (SDN) supporting Over-The-Top (OTT) Platforms, Machine-to-Machine (M2M) communication, and online gaming is set to propel the expansion of this segment, leading to increased investments in data centers in the foreseeable future.

Global Data Centre Equipment Market Segmentation: By Region:

•             North America

•             Asia-Pacific

•             Europe

•             South America

•             Middle East and Africa

North America asserts its dominance in the global market, attributed to rising per capita income in both developed and developing countries within the region. Technological advancements and a flourishing telecommunications industry significantly contribute to North America holding the largest market share. The region is poised for substantial growth due to the introduction of various business operations and applications for data creation, such as e-discovery, expanding utilization of cloud services, and widespread adoption of server virtualization. Factors like increased reliance on online banking, electronic stock trading, and the shift towards electronic medical records in healthcare contribute to heightened requirements for data storage and management. The rise of applications like e-discovery and server virtualization in business operations and data generation positions North America as the leading regional segment.

Conversely, Asia Pacific is expected to emerge as the fastest-growing region in the forecast period. The escalating demand for portable electronics and smart wearable devices propels the growth of the data center equipment market in the region. Data center equipment is integral to various portable electronic devices like tablets, smartphones, laptops, smart pens, and portable gaming consoles. Moreover, the use of data center equipment in wearable smart gadgets and watches enhances the overall user experience. The increasing prevalence of portable electronic devices and smart wearables is a key driving force for the global data center equipment market in the Asia-Pacific region.

COVID-19 Impact on the Global Data Centre Equipment Market:

The impact of the COVID-19 pandemic on the data center equipment market is assessed as moderate to low. Remarkably, numerous manufacturers have reported consistent growth during the pandemic. Restrictions on physical movements prompted many businesses to transition towards online tools and services, consequently generating robust demand for data centers globally to manage substantial volumes of customer data. Additionally, heightened concerns about secure data storage and backup further contributed to the increased demand for data center equipment during the pandemic.

As digitalization continues to advance and e-commerce usage rises, there is an anticipation of increased demand for data centers, subsequently fueling the need for data center equipment in the foreseeable future.

Recent Trends and Innovations in the Global Data Centre Equipment Market:

In September 2023, VVDN Technologies announced a collaborative venture with Axiado Corporation focused on developing Open Compute Platform (OCP)-compliant data center and telco Open Radio Access Network (Open RAN) servers.

By December 2023, Moore Threads, a leading Chinese GPU manufacturer, introduced the MTT S4000, a high-performance graphics card specifically tailored for applications in artificial intelligence (AI) and data center operations.

Key Players:

• Huawei Technologies Co. Ltd
• Cisco Systems Inc
• Nokia Corporation
• Avaya Inc.
• Dell Inc.
• Juniper Networks
• F5
• NetApp Inc.
• EMC Corporation
• Hewlett Packard Co
• IBM Corporation
• Oracle Corporation
• Fujitsu Corporation
• QNAP Systems Inc