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Data Center Equipment Market Size - Share and Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2025 - 2034
Report ID: GMI1895
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Authors: Preeti Wadhwani,
Data Center Equipment Market
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Data Center Equipment Market Size
The global data center equipment market generated substantial revenues in 2024 and is projected to grow at a decent CAGR from 2025 to 2034, driven by increased internet use, the growth of big data analytics, and the move to cloud computing. As per cloud zero, over 90% of organizations use the cloud in some form. Additionally, with people concerned about how their data is being stored and managed, many companies are looking for robust infrastructure, which in turn increases demand for data center equipment.
The demand has also skyrocketed due to the amount of data being generated each day and the absence of demand for both storage needs and the computation of massive datasets. Moreover, the cloud economy is being digitalized due to supply chain disruptions, while artificial intelligence (AI) and machine learning (ML) are accelerating the trend forward, placing even more demands on the need for high-performing data centers. The increasing need for power and innovative and energy-efficient hardware solutions (including liquid cooling) and other energy-efficient offerings is accelerating.
However, there are some constraints deterring market growth. The capital investment of establishing a data center can be substantial because of infrastructure costs and cooling costs. The capital investment can discourage smaller organizations, which may not have as much to invest in reviewing this option as a solution. Furthermore, sustainability and energy efficiencies are now in the focus of data centers and delivery of services, for they come at a capital cost associated with developing innovative technologies (i.e., liquid cooling and some renewable energy options). Ultimately, the shortage of skilled resources to deliver operational management for data centers continues to be problematic.
Data Center Equipment Market Trends
The data center equipment industry will be propelled by key trends such as energy-efficient solutions, modular data centers, and edge computing technologies. With energy consumption on the rise in traditional data centers, innovations such as liquid cooling systems, energy-efficient servers, and Artificial Intelligence (AI)-based optimization systems are gaining traction. These technologies allow a company to gain control over the efficiency of its data center and reduce the carbon imprint associated with storing massive amounts of data while lowering operating expenses for the automation experience.
Modular data centers allow for flexibility and scalability while reducing the amount of time it takes to deploy a data center. The modular data center is a single data center unit that is prefabricated and shipped for set-up, and it allows for a rapid scale of deployment without the traditional construction time that other conventional data centers would have. Edge computing and the arrival of 5G technology will have a significant impact on the market.
Edge computing decreases bandwidth and latency by allowing user data to be processed within closer proximity to the user. It serves as a perfect fit for technology like autonomous vehicles, IoT devices, and industrial automation. As more companies and associations introduce edge computing within their systems, they expect the demand for localized data centers to increase.
Data Center Equipment Market Analysis
The server segment held a significant share in 2024 and is expected to grow at a considerable rate through 2034. Server equipment is the core of any data center once sunlight leaves. After that, the server must process and manage any data input. Server manufacturers experience an uptick in demand with increased reliance on cloud computing, data analytics, and artificial intelligence; all these require additional computing processing and high-performance servers that can perform the requisite workloads, processing large volumes of data.
Organizations are increasingly moving to virtualized server environments where many different applications can run on a physical server in a more resource-optimizing (and cost-conscious) way. Furthermore, the adoption of hyper-converged infrastructure (HCI) systems, which are essentially all-in-one computing, storage, and networking server solutions, is significantly driving demand for specialist servers in data centers.
HCI systems deliver superior performance and scalability, offering a highly attractive IT infrastructure option for companies amplifying or scaling up. And the landscaping market for energy-efficient servers will also play a pivotal role in growing the market. Energy use and efficiency remain a strenuous undertaking for data centers worldwide. Therefore, server manufacturers will strive to provide energy-efficient servers that require less energy and result in equal or better performance.
The telecommunications segment held sizeable growth in 2024. Telecommunications companies need data center infrastructure since they are challenged with meeting the increasing demand for mobile and internet services. The growth in demand is predominantly fueled by an explosion in mobile data consumption in relation to the deployment of 5G technology. 5G networks continue to drive the telecom sector to either build or upgrade their data centers to prepare for the masses of data traffic that is generated through 5G networks.
Telecom companies are also integrating new technologies surrounding software-defined networking (SDN) and network function virtualization (NFV) to improve the availability, agility, scalability, and efficiency of data centers and associated networks. Telecommunications providers looking to leverage SDN and NFV will build more flexible and dynamic networks that cater to an ever-growing appetite for new applications and services, including video streaming, cloud gaming, and autonomous vehicles. Demand for mobile broadband from the telecommunications sector will continue after the success of confined and cost-isolated data centers.
United States data center equipment market held a notable share in 2024, driven by the technology companies and telecommunications companies that utilize advanced data center infrastructure. The use of cloud services by a large majority of enterprises has been significant and is likely to lead to an expansion of data center equipment and infrastructure. Additionally, the advancement and deployment of technologies such as artificial intelligence, big data analytics, and 5G have begun to take shape. The U.S. is leading the deployment of these emerging technologies and therefore has a tremendous demand for data center infrastructure.
Major data center markets in the U.S. include Silicon Valley, Northern Virginia, Texas, and others, which have seen a significant concentration and investments in data center infrastructure, both public and private. Federal government initiatives to promote energy efficiency and sustainable development also explicitly aim to encourage data center infrastructure and contribute to market growth.
Data Center Equipment Market Share
Major companies operating in the data center equipment industry include:
To effectively establish a hold on the data center equipment market, organizations are employing several strategies. One of the main strategies involves investing in research and development for creating scalable, energy-efficient, and high-performance equipment. This also includes designing and developing modular data centers, cooling technologies, and edge computing solutions geared towards the needs of digital enterprises. Additionally, alliances and collaborations are another important strategic growth strategy, as they are being created with cloud service providers and telecommunications leaders to provide integrated solutions and use their capabilities. In addition, organizations are now prioritizing sustainability, making commitments to use renewable energy, and incorporating green technologies into their data centre operations. For instance, recent data suggests an increase in the use of artificial intelligence optimization tools, which are lower in carbon footprint and scalable, to help organizations reduce energy usage and optimize operational efficiencies.
Data Center Equipment Industry News