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Data Center Equipment Market Size
Data Center Equipment Market will register significant growth between 2024 and 2032, propelled by increasing efforts to reuse hardware. As sustainability becomes a priority for businesses, organizations are focusing on extending the lifespan of data center equipment through refurbishment and repurposing initiatives.
For instance, in June 2023, Amazon Web Services (AWS), which operates a global network of cutting-edge server rack technologies in its data centers, revealed that it maximizes the lifespan of hardware. AWS sends retired server racks and components to its reverse logistics hubs for secure demanufacturing and repair. This program aligns with AWS's commitment to achieving net-zero carbon by 2040 under The Climate Pledge. AWS adopts circular economy principles by designing for reusability, recovering value from decommissioned equipment through reuse, and maintaining efficient equipment operation, recycling, and repair. This approach minimizes waste generation, reduces carbon emissions, and optimizes resource utilization across the supply chain.
This trend not only reduces electronic waste but also offers cost-effective solutions for upgrading infrastructure. By embracing the reuse of hardware, companies can minimize environmental impact while optimizing resource utilization, thereby driving the growth of the market.
Growth Drivers & Restraints
The Data Center Equipment Market experiences heightened demand due to growing concerns about sustainability. With businesses increasingly prioritizing environmental responsibility, there is a heightened focus on sustainable practices within data center operations. This includes investing in energy-efficient equipment, optimizing cooling systems, and implementing renewable energy solutions. Additionally, there is a rising interest in eco-friendly data center designs and technologies that minimize carbon footprint and resource consumption. As sustainability becomes a key consideration for data center operators, the market witnesses a surge in demand for sustainable equipment solutions.
For instance, in August 2023, According to an IDC FutureScape report, by 2025, approximately 90% of G2000 companies were expected to require reusable materials in IT hardware supply chains, mandating carbon neutrality targets for providers' facilities and prioritizing lower energy usage as prerequisites for conducting business. With this in mind, liquid immersion cooling technology, known for its cost-effectiveness and flexibility, emerged as a solution to address various issues related to data center energy consumption. NTT, in India, was the first data center to implement liquid immersion cooling in a production environment at its latest Navi Mumbai data center campus.
Several factors constrain the Data Center Equipment Market's growth trajectory. These include stringent regulatory requirements and compliance standards, which may delay product development and market entry. Additionally, technical complexities in equipment design and integration pose challenges, necessitating continuous innovation, and expertise. Market fragmentation and intense competition among manufacturers also impact pricing and profitability. Moreover, limited awareness and adoption of advanced technologies in certain regions hinder market expansion. These restraints underscore the need for strategic planning and collaboration to overcome challenges and capitalize on emerging opportunities.
Data Center Equipment Market Trends
The data center equipment industry is witnessing significant trends driven by rising conventions and product launches from leading companies. As the demand for data center equipment continues to grow, industry conventions serve as platforms for showcasing innovations and networking opportunities. Moreover, leading companies are launching cutting-edge products to meet the evolving needs of data center operators, focusing on energy efficiency, scalability, and performance. These trends reflect the market's dynamic nature, with continuous advancements shaping the future of data center equipment solutions.
Citing an instance, in December 2023, Best Power Equipment India Private Ltd., a leading provider of comprehensive power solutions, collaborated with W.Media South Asia & Middle East at the Saudi Cloud and Datacenter Convention 2023 in Riyadh Olaya. This partnership aimed to strengthen BPE's position in supporting the dynamic data center landscape. The event gathered over 100 senior IT and data center professionals, as well as cross-vertical end-users, project leaders, consultants, and decision-makers. It offered a valuable platform for organizations like BPE to showcase their products to an audience deeply knowledgeable about the industry's dynamics and potential.
Data Center Equipment Market Analysis
By product, the servers segment will record a significant share through 2032, with the increasing need to make data accessible to computers in data centers. They operate in a central location and offer centralized information storage and processing to assist organizations with efficient and smooth operations. With the exponential growth of digitalization and cloud computing, there is an increasing need for high-performance servers to support various applications and workloads. From small businesses to large enterprises, the demand for servers continues to rise, propelling the Data Center Equipment Market forward as organizations invest in modernizing and expanding their IT infrastructure.
Considering the application, market share from the telecommunications segment would garner profitable gains over the next ten years. The growth can be ascribed to the proliferating demand for internet-enabled services. The rising penetration of online banking and electronic stock trading has highlighted the need for integrity, high standards, and safety to handle the massive amount of information. The surging requirement for data storage and management in the healthcare sector to handle electronic medical records will contribute to the market demand.
The U.S. will emerge as a lucrative revenue pocket for the data center equipment market owing to the expanding telecommunication sector and technological innovations. Growing product applications for business operations and data generation, including e-discovery, increasing acceptance of cloud services, and server virtualization, will remarkably add to the regional growth. Organizations across various sectors, including technology, finance, healthcare, and e-commerce, continually invest in upgrading and expanding their data center facilities to meet the growing demands of digital transformation. As a result, the market in the US is experiencing sustained growth and expansion.
Data Center Equipment Market Share
Major companies operating in the data center equipment industry competitive landscape include:
- Digi International
- Alcatel-Lucent
- Brocade Communication Systems, Inc. (Broadcom Inc.)
- Meru Networks (Fortinet)
- Hewlett-Packard
- Emulex Corp. (Broadcom Inc)
- F5 Networks
- Schneider Electric.
Data Center Equipment Industry News
· In November 2023, Schneider Electric and Compass Datacenters inked a $3 billion equipment agreement. The five-year deal was fueled by the surge in demand for data centers, driven in part by the artificial intelligence (AI) boom. This agreement expanded upon a previous relationship announced in July 2023, where Schneider Electric and Compass integrated their supply chains. Schneider will produce prefabricated modular data center equipment at a 110,000-square-foot manufacturing facility near Compass's campus in Red Oak, Texas, and distribute it to customers nationwide.