Data Center Rack & Enclosure Market - By Component, and By Application, Growth Forecast 2025 – 2034

Data Center Rack & Enclosure Market Size

The global data center rack & enclosure market size was valued at USD 4.6 billion in 2024 and is estimated to register a CAGR of 8.4% between 2025 and 2034. The rise of edge computing, driven by the increased deployment of Internet of Things (IoT) devices, is a major market driver.
 

According to Statista, the total number of IoT connections across the globe are growing rapidly and are projected to exceed 39 billion by 2028. As more businesses use IoT devices to process and analyze data closer to the edge, the need for localized data centers increases. These edge data centers need racks and enclosures to organize servers, storage, and networking equipment efficiently. The increasing demand for edge computing, particularly in industries such as manufacturing, transportation, and retail is driving the need for high-density racks and effective enclosures to support this decentralized data processing.
 

The rise of modular data centers, which are portable and scalable, is contributing to the growing demand for flexible and adaptable racks and enclosures. These modular systems allow businesses to expand their data center capacity as needed without building large-scale, permanent infrastructures. They often require specialized racks and enclosures that can be quickly deployed and adjusted to meet changing capacity and operational requirements.
 

Companies are launching innovative modular data center systems for a variety of industry applications. For instance, in April 2024, Vertiv, a global provider of digital infrastructure solutions launched the Vertiv SmartAisle 3, a micro modular data center system that uses Artificial Intelligence (AI), to improve efficiency and operations.
 

Data Center Rack & Enclosure Market Trends

Data center operators require more space-efficient solutions owing to the increasing power and cooling needs of modern servers. Manufacturers are responding by launching new high-density racks designed to hold more servers within the same space. These new racks include better airflow management systems, easy installation features, and better cable management solutions.
 

For instance, in October 2024, Eaton, a power management company launched its Eaton Heavy-Duty SmartRack enclosures, designed to help data center operators and IT managers handle the growing physical needs of generative AI computing infrastructure in enterprise, colocation and hyperscale data centers.
 

The complexity of integration and maintenance is a notable restraint on the growth of the data center rack and enclosure market, as organizations grapple with the challenges of deploying sophisticated infrastructure. Modern data centers require a seamless integration of various components, including racks, enclosures, cooling systems, and power distribution units.
 

Data Center Rack & Enclosure Market Analysis

Based on component, the market is divided into solution and service. In 2024, the group segment held a market share of over 75% and is expected to cross USD 7 billion by 2034. As data centers are required to support more advanced tasks including AI, machine learning, and big data, the demand for high-density rack solutions has increased. High-density racks accommodate more servers, providing better utilization of space, which is important in environments where power, cooling, and space are limited. These solutions feature innovative cooling mechanisms such as liquid cooling or optimized airflow systems to support dense configurations without compromising efficiency.
 

Based on application, the data center rack & enclosure market is categorized into BFSI, colocation, energy, government, healthcare, manufacturing, IT & telecom and others. The IT & telecom segment held a market share of around 32% in 2024. The rise of cloud computing is reshaping the IT and telecom industries, creating a need for strong data center infrastructure to support this transition. Companies are increasingly moving to cloud-based services creating a demand for customized racks and enclosures that are scalable and efficient. These solutions are important for managing the increasing volume of data while maintaining high performance. By implementing robust storage solutions, businesses can improve data accessibility, streamline processes, and better meet customer demands in a rapidly changing digital environment.
 

North America dominated the global data center rack & enclosure market with a major share of over 40% in 2024 and the U.S. leads the market in the region. North America has presence of major cloud service providers such as Amazon Web Services (AWS), Google Cloud, and Microsoft Azure, is seeing rapid data center growth. As these companies expand, they need modular, flexible, and scalable rack and enclosure solutions to meet their evolving storage needs. In the U.S., both the government and private enterprises are heavily investing in digital transformation and IT infrastructure upgrades.
 

Europe leads in sustainability, requiring data centers to meet strict efficiency standards including those in the European Green Deal. This has driven the adoption of energy-efficient racks and enclosures with advanced cooling and power management features to help reduce carbon footprints.
 

The Asia Pacific region is experiencing increased internet penetration, mobile usage, and data generation. Countries such as China, India, and Japan are leading in data center investments, deploying racks and enclosures designed for high-density configurations and scalability. As smart cities, IoT, and AI-driven applications grow in the Asia Pacific, the demand for edge computing and hyperscale data centers is rising.
 

Data Center Rack & Enclosure Market Share

Rittal GmbH & Co. Kg and Schneider Electric hold a market share of around 15% in the market. Rittal focuses heavily on modular data center solutions to meet evolving customer needs for scalability and flexibility. Company's product line offers a modular approach, allowing clients to scale their data centers efficiently. These solutions are designed to support high-density workloads, accommodating the development of data-intensive applications such artificial intelligence and cloud computing.
 

Schneider focuses on integrating IoT and advanced monitoring capabilities into its racks and enclosures. Through EcoStruxure IT, a cloud-based platform for monitoring and managing data centers, Schneider provides clients with real-time visibility and predictive analytics. This integration is in line with growing demand for enhanced data center efficiency and predictive maintenance.
 

Data Center Rack & Enclosure Market Companies

Major players operating in the data center rack & enclosure industry include:

• Blackbox
• Eaton
• Fujitsu
• HPE
• IBM
• Legrand
• Panduit
• Rittal
• Schneider Electric
• Vertiv
   

Data Center Rack & Enclosure Industry News

• In July 2024, Vertiv launched the MegaMod CoolChip, a modular data center designed for AI. The new product uses liquid cooling, including direct-to-chip cooling, and can be customized to meet the needs of AI compute providers. It also supports a hybrid approach with both air and liquid cooling. The MegaMod CoolChip can be used as a modular retrofit or a standalone data center, with capacities reaching multiple megawatts.
   
• In November 2023, Eaton Corporation launched Rack PDU G4, a new, innovative rack power distribution solution for data centers and edge facilities. By accommodating power demands for a broad range of equipment and facility types, the new rack solution allows data center operators to deploy a single PDU across multiple locations, saving time, reducing costs and simplifying power management.
   

The data center rack & enclosure market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue ($Bn) from 2021 to 2034, for the following segments:

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Market, By Component

• Solution
  • Frame size
    • 19-inch rack
    • Other racks
  • Frame design
    • Open frame rack
    • Enclosed rack
    • Customized rack
  • Rack unit
    • 36u rack
    • 42u rack
    • 45u & 48u rack
    • Other rack units
• Service
  • Professional
  • Managed

Market, By Application

• BFSI
• Colocation
• Energy
• Government
• Healthcare
• Manufacturing
• IT & telecom
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Poland
  • Benelux
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Indonesia
  • Singapore 
• South America
  • Brazil
  • Argentina
  • Chile
  • Colombia
• MEA
  • UAE
  • South Africa
  • Saudi Arabia